Iceland’s dramatic landscapes and unique natural wonders make it a dream destination, but it’s no secret that traveling here can be expensive. Fortunately, there are budget-friendly accommodations that offer comfort, convenience, and a touch of Icelandic charm. Here’s a guide to our top 10 affordable hotels in Iceland for travelers looking to explore this wonderful country without breaking the bank.
Location: Central ReykjavÃk
Amenities: Dorms and private rooms, free Wi-Fi, communal kitchen, bar and lounge.
Highlights: This stylish hotel is perfect for budget-conscious travelers who want to stay in the heart of ReykjavÃk. It’s close to major attractions like HallgrÃmskirkja and Laugavegur shopping street. Hlemmur Square blends the atmosphere of a boutique hotel with the affordability of a hostel. Guests can relax in the bar and lounge or prepare their own meals in the communal kitchen. The central location makes it a breeze to explore ReykjavÃk’s vibrant nightlife, culture, and shopping districts.
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Location: ReykjavÃk city center
Amenities: Shared and private rooms, restaurant, bar, free Wi-Fi, laundry facilities.
Highlights: Known for its trendy, industrial-chic design, Kex Hostel offers affordable stays with a social vibe and fantastic views of the bay. Located in a former biscuit factory, this hostel has a unique charm and lively atmosphere. Guests can enjoy live music events in the bar or dine in the on-site restaurant serving locally sourced dishes. Its convenient location allows easy access to ReykjavÃk’s top attractions and the waterfront.
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Location: South Iceland near Vatnajökull National Park
Amenities: Free breakfast, free parking, on-site restaurant, en-suite rooms.
Highlights: Ideal for exploring South Iceland, Fosshótel Nupar is surrounded by lava fields and offers breathtaking views of glaciers and mountains. This tranquil hotel is perfect for nature lovers seeking a peaceful retreat. Guests can start their day with a complimentary breakfast before venturing out to explore nearby attractions like Skaftafell National Park and Jökulsárlón Glacier Lagoon. The minimalist design of the rooms complements the stunning natural surroundings.
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Location: Downtown ReykjavÃk, near the harbor
Amenities: Dormitories and private rooms, free Wi-Fi, communal kitchen, bike rentals.
Highlights: A sustainable lodging option that’s part of the Hostelling International network. Great for travelers seeking eco-friendly accommodations. This hostel is an excellent choice for budget travelers who value sustainability. With its convenient location near ReykjavÃk Harbor, guests can easily join whale-watching tours or stroll along the waterfront. The communal kitchen and shared spaces foster a friendly, social environment.
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Location: Central Akureyri
Amenities: Free Wi-Fi, shared kitchen, cozy lounge area, private and shared rooms.
Highlights: Nestled in the heart of Akureyri, the Apotek Guesthouse is a welcoming and affordable option for travelers exploring Iceland’s northern capital. This charming guesthouse offers comfortable rooms and shared facilities, making it ideal for budget-conscious visitors. Its central location provides easy access to local attractions like Akureyri Botanical Garden and the iconic Akureyrarkirkja Church. With its warm atmosphere and well-maintained amenities, Apotek Guesthouse ensures a pleasant stay in the north.
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Location: ReykjavÃk city center
Amenities: Futuristic pod-style beds, free Wi-Fi, shared kitchen, movie room, lockers.
Highlights: A unique and budget-friendly stay in ReykjavÃk, Galaxy Pod Hostel features innovative pod-style accommodations, offering privacy and modern amenities. Perfect for solo travelers or small groups, this hostel combines affordability with a touch of futuristic design. Its central location makes it a convenient base for exploring ReykjavÃk’s vibrant city life, including HallgrÃmskirkja Church and Laugavegur shopping street. Guests will appreciate the social atmosphere and well-equipped shared spaces.
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Location: Westfjords region
Amenities: Free breakfast, cozy rooms, on-site restaurant, free parking.
Highlights: For those venturing into the remote and stunning Westfjords, Hótel Látrabjarg offers an affordable and cozy stay. Located near the famous Látrabjarg bird cliffs, this hotel is a haven for nature enthusiasts. Guests can enjoy complimentary breakfast and comfortable rooms after a day of hiking or birdwatching. The on-site restaurant serves delicious local dishes, making it a convenient choice for travelers exploring this off-the-beaten-path region.
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Location: Near Skaftafell National Park
Amenities: Free parking, free Wi-Fi, breakfast available, en-suite rooms.
Highlights: Nestled in a beautiful rural setting, this hotel offers easy access to hiking trails and glacier adventures. Adventure Hotel Hof is a haven for outdoor enthusiasts. Surrounded by stunning landscapes, it’s an excellent base for exploring the nearby glaciers and waterfalls. Guests can unwind in cozy rooms after a day of hiking and enjoy a hearty breakfast to fuel their adventures.
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Location: Central Akureyri, North Iceland
Amenities: Dorms and private rooms, bar and restaurant, free Wi-Fi, communal kitchen.
Highlights: This lively hostel is great for solo travelers and groups exploring North Iceland’s second-largest city. Akureyri Backpackers offers a vibrant atmosphere with comfortable accommodations at an affordable price. Guests can mingle at the on-site bar and restaurant or prepare meals in the communal kitchen. Its central location provides easy access to Akureyri’s charming streets and cultural landmarks.
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Location: ReykjavÃk city center
Amenities: Compact rooms, free breakfast, free Wi-Fi, tour desk, on-site restaurant.
Highlights: Hotel Cabin is a great choice for budget travelers seeking simplicity and convenience in ReykjavÃk. Known for its compact yet comfortable rooms, this hotel offers a free breakfast to fuel your adventures. Its location provides easy access to the city’s main attractions, including the waterfront and Laugardalur Park. The friendly staff and tour desk make planning excursions seamless, ensuring you make the most of your Icelandic journey.
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Location: Near HallgrÃmskirkja Church, ReykjavÃk
Amenities: Free breakfast, kitchenette in some rooms, free parking, free Wi-Fi.
Highlights: Located near one of ReykjavÃk’s most iconic landmarks, Guesthouse Sunna combines convenience and affordability. Guests can enjoy a complimentary breakfast and the option of preparing their own meals in rooms equipped with kitchenettes. Its central location makes it a great choice for exploring the city.
Location: West Iceland
Amenities: Heated pods, shared kitchen and bathroom facilities, hot tubs, free Wi-Fi.
Highlights: Situated in scenic West Iceland, Fossatun Camping Pods offer an affordable glamping experience. These heated pods provide a cozy retreat after a day of exploring nearby attractions like Hraunfossar waterfalls and the Settlement Center. Guests can relax in the hot tubs with stunning views of the surrounding countryside.
Location: Near VÃk in South Iceland
Amenities: Shared and private rooms, free Wi-Fi, shared kitchen, bar, lounge area.
Highlights: Set amidst the stunning landscapes of South Iceland, The Barn Hotel offers an affordable yet stylish retreat for travelers exploring the area. Its modern design and warm atmosphere make it a standout choice. Located near attractions like Reynisfjara Black Sand Beach and the Dyrhólaey Peninsula, it’s perfect for nature lovers. The shared kitchen and social spaces provide opportunities to connect with other travelers while keeping costs low.
Tips for Finding Affordable Hotels in Iceland:
Book early: Budget accommodations fill up fast, especially in peak travel seasons.
Consider hostels: Many hostels in Iceland are modern and cater to all ages with private room options.
Self-catering: Look for places with kitchen facilities to save on dining out.
Travel off-season: Prices for accommodations tend to be lower during the winter months (excluding the holiday season).
Staying on a budget in Iceland doesn’t mean compromising on comfort or location. With these affordable options, you can enjoy your Icelandic adventure while keeping costs under control. Happy travels!
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