Fjord reflections in Isafjordur, Iceland
travel guide

Where to stay in Iceland

Faraway WorldsFaraway Worlds

Faraway Worlds

Staff writers

Known for its volcanic landscapes, towering mountains and, of course, the Northern Lights, Iceland's stunning natural attractions are scattered throughout its countryside. The country is scarcely populated, with many remote and beautiful places for travellers to discover.

While many visitors find themselves staying in Reykjavik, you'll have to venture out of the capital to explore many of Iceland's most spectacular spots. Small fishing villages dot the coastline, often with mountainous backdrops, and provide a more convenient way to access the national parks and glaciers which are further from the capital. Here are just a few suggestions on where to stay when you visit this fascinating country.

Reykjavik with a cloudy sky

At a glance

Best place to stay in Iceland for a city break


Beautiful reflection of the cityscape of Reykjavik in lake Tjornin at the blue hour in winter with the Basilica of Christ the King (Landakotskirkja) and the city hall

The capital city of Iceland, Reykjavik, is a pleasure to wander around and get lost in. Despite being in such a remote location, Reykjavik's architecture is awe-inspiring, with some of the most famous buildings making the city look almost futuristic. Hallgrimskirkja is a towering, silver cathedral that could pass as a castle in a fantasy novel, and the Harpa Concert Hall is a phenomenal glass and geometric structure equally impressive on the interior and exterior of the building.

On the coast next to the Harpa Concert Hall, the promenade running along the bay is a stunning walk that will make you forget about being in a city, and the views lining the landscape will make you want to pack up and move to Reykjavik! There is also a huge selection of museums and exhibitions to explore, from the Whales of Iceland exhibit to the Aurora Borealis Museum and even the Icelandic Punk Museum.

Several famous attractions outside of Reykjavik are also reachable in just a few hours, so a city break in the capital can be expanded to include a few day trips with ease. Regularly visited waterfalls like Skogafoss and Seljalandsfoss are roughly two hours by car to the east, and most visitors to Iceland travel to the Blue Lagoon, (arguably the most famous attraction in Iceland) from Reykjavik for the day.

Stay at the Vintage Hotel in a comfortable studio apartment in a very convenient location

Best place to stay in Iceland for sightseeing


View of Reyniskirkja Church in Vik of Iceland with beautiful yellow flowers field in the foreground and Reynisdrangar rock formation in the background

Vik is a small village situated on the south coast of Iceland. It's a quiet village, near Reynisfjara Beach and Dyrholaey, both of which are popular attractions in Iceland. However, Vik's central location on the south coast is what makes it a perfect place to stay to see all the sights in the south.

Hire a car in Reykjavik and drive the 2.5 hours to Vik, then you explore the entire south coast of Iceland at your leisure. Everything that could possibly be on your itinerary in the region will be around an hour or two’s drive from your accommodation, making it an incredibly convenient base for your trip.

From Vik, famous waterfalls such as Seljalandsfoss and Skogafoss are less than an hour’s drive to the west back towards Reykjavik. In the other direction, Skaftafell National Park is also only an hour’s drive east from Vik, home to more incredible waterfalls, stunning glacial lagoons and great hikes.

While there is little to see in Vik itself (aside from the beautiful black sand beach and cliff formations of course), it makes a wonderful location to base yourself for your time on the south coast. There are also a number of good hotels around the village and it's peaceful, rugged surroundings make it a lovely place to unwind at the end of a long day.

Stay at the Hotel Vík í Mýrdal just a few minutes' walk from the beach.

Best place to stay in Iceland to see the Northern Lights


The Northern Lights over Myvatn, Iceland

Many people travel to Iceland for the possibility of seeing one of nature’s most impressive displays, the Northern Lights. In the winter months when nights are longer and the sky is clear, the Northern Lights periodically dance across the sky, but your chances of experiencing this are greater depending on the area you travel to.

Myvatn is one of the most popular places to base yourself for the greatest likelihood of success seeing the Northern Lights. It’s far enough north that the nights are longer and darker, with little light pollution to ruin the view.

In Myvatn, you can also see the Northern Lights with a backdrop of stunning scenery as well. Lake Myvatn is a beautiful location to watch the lights, as the lights reflect in the crystal-clear water as they dance across the sky. Dimmuborgir, an area to the east of Myvatn, has otherworldly lava formations and offers a landscape that is as equally as dramatic as the colours in the sky.

Stay at Vogafjós Farm Resort or Dimmuborgir Guesthouse on the shores of Lake Myvatn.

Best place to stay in Iceland for whale watching


Port of the fishing village of Husavik, Iceland.

In Northern Iceland, Husavik attracts the attention of many for its whale watching experiences. There is a drive to promote sustainable whale watching in Iceland and Husavik is one of the best places to see these remarkable creatures for yourself. Daily tours from this northern fishing town take visitors out into the ocean for around three hours to see the resident whales, of which there are many.

Husavik is an exceptional place for whale watching due to regularity of whale sightings and variety of species being discovered in the area. It is the high success rate of spotting whales that draws people to Husavik, and the town is now often referred to as the whale watching capital of Iceland. Husavik is also a hotspot for puffins and other birdlife, and tours on the coast can offer a bit more variety beyond whales.

If you're planning to go whale watching, the best time to spot whales is in the summer months.

Stay at the Fosshotel Husavik in the centre of town.

Best place to stay in Iceland for hiking


Fjord reflections in Isafjordur, Iceland

Iceland is a hiking and outdoor paradise, so those interested in hiking, mountaineering and camping will struggle to narrow down Iceland’s thousands of hiking spots to just one area. Saying that, for the ultimate immersion and outdoor experience, Hornstrandir is the promised land you’ve been looking for.

Situated in the very northwest of the country, Hornstrandir is a wilderness that few manage to reach. This is in part because of how difficult it is to get to, but slightly lengthy journey is well worth for the beautiful rolling hills and cliffsides, interesting wildlife, and trails - which you can have all to yourself. The entire region of the Westfjords is almost criminally underexplored.

Venturing to Hornstrandir involves starting your journey and stocking up in Isafjordur, which is a brilliant hiking destination in itself. The third largest town in Iceland, Isafjordur is a sleepy quintessentially Scandinavian fishing town and a great base for your adventure. There are multiple hikes around the village in the fjord, so even if you don’t fancy the long journey out to Hornstrandir, basing yourself in Isafjordur will still provide ample hiking opportunities to enjoy.

Stay at Hotel Isafjördur - Torg for comfortable rooms or consider this self-contained apartment for bigger groups. If you're heading out to Hornstrandir, plan to camp in the national park.

Best place to stay in Iceland for foodies


Beautiful view of mountains reflected in a lake in Hofn, Iceland

If you enjoy seafood, Iceland is the place for you - the country is scattered with fishing towns, so the seafood is about as fresh as it can get. That said, Hofn, a fishing village on the southeast coast of Iceland, is a special place for those looking for some of the best food in Iceland.

Hofn is famous across Iceland for its lobster, and is often referred to as the lobster capital of the country. This is, in part, due to the annual lobster festival that takes place at the end of June. It's the perfect opportunity to sample his local delicacy while becoming immersed in a Scandinavian festival - a fascinating experience in and of itself.

If the festival doesn’t coincide with your visit, then the beautiful lobster can still be tried in the local restaurants if it is in season, and if lobster is unavailable there will be plenty of other fresh seafood options to make your mouth water. Hofn is also a great place to go out fishing and there are options for day trips to ice caves and glaciers from the village.

Stay at Guesthouse Hvammur in the centre of town or consider Seljavellir Guesthouse with mountain and glacier views if you don't mind staying a bit further from the village.

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Last Updated 12 November 2022

Icebergs and glaciers in Iceland


Considered part of Europe, Iceland is known for its natural beauty including glaciers, snowy mountains, clear lakes and the Northern Lights.