10 Best hotels in Reykjavik for 2025

Reykjavik, Iceland’s vibrant and quirky capital, welcomes over 2 million annual travelers with its unique blend of Nordic charm and adventure. From boutique hotels to cozy guesthouses, the city offers a diverse range of accommodations, ensuring every visitor finds a perfect place to stay. 

Whether you’re here to soak in the Blue Lagoon, explore Viking history, or hunt for auroras, we’ve handpicked the best stays for 2025—no hefty budget or luxury expertise required.

How we chose the best hotels in Reykjavik

We prioritized three pillars: location (walkable access to downtown or beautiful views), amenities (geothermal spas, local design, or free bike rentals), and pricing . Every hotel on the list earned its spot through genuine guest love, unique perks, and value. 

Best hotels in Reykjavik

Here are some of the best hotels in Reykjavik, offering a mix of luxury, style, and comfort for every type of traveler:

Ion City Hotel

Source: Ion City Hotel

Ion City Hotel, opened in 2018, blends minimalist Icelandic aesthetics with eco-conscious flair. This boutique gem wows with a rooftop geothermal hot tub, perfect for soaking under the Northern Lights. Guests rave about the locally sourced breakfast buffet and in-room yoga mats for post-hike stretches. 

• Location: Just a five-minute walk from Hallgrímskirkja, Iceland’s largest church, which towers over the heart of Reykjavík.
• Number of rooms: With just 18 rooms, the Ion City Hotel is intimate yet centrally located.
• Pricing: Rates start from $202/night
  

The Reykjavik EDITION

Source: Booking, The Reykjavik EDITION

Marriott’s stylish new addition to Reykjavik, launched in 2023, is designed for travelers who appreciate sleek design, local art, and a social atmosphere. Located in the heart of the city, it puts guests within walking distance of Reykjavik’s top landmarks, including Hallgrímskirkja and the lively Laugavegur shopping street.

• Location: Situated in Reykjavik’s historic downtown, right by the picturesque Old Harbor.
• Number of rooms: 253 rooms, including 26 suites and a penthouse, designed with modern decor and luxury details by Ian Schrager, the hotelier behind the boutique hotel concept.
• Pricing: $409 - $633/night
  

Canopy by Hilton Reykjavik

Source: Canopy by Hilton Reykjavik

A boutique-style stay with a local twist, Canopy by Hilton blends Icelandic charm with a modern, design-forward aesthetic. Located in the heart of Reykjavik, it’s perfect for travelers who want to explore the city on foot or take advantage of the hotel’s free bike rentals to cruise through the colorful streets lined with murals and indie shops.

• Location: Two-minute stroll to Laugavegur shopping street.
• Number of rooms: Set across six interconnected houses, Canopy by Hilton Reykjavik features 111 rooms.
• Pricing: $203 to $673/night
  

Hotel Borg by Keahotels

Source: Booking, Hotel Borg by Keahotels

Opened in 1930, Hotel Borg is Reykjavik’s original luxury hotel, combining Art Deco elegance with modern comforts. Marble staircases, velvet lounges, and chandeliers nod to its Gatsby-era roots, while contemporary touches keep it fresh. The hotel’s standout Volcanic Ritual spa treatment, using Icelandic lava salts, remains a guest favorite.

• Location: Anchoring Austurvöllur Square, steps from Parliament and cafes.
• Number of rooms: Keahotels, one of Iceland’s largest hotel chains, offers 99 rooms and suites.
• Pricing: Prices start from $223/night

Black Pearl Reykjavik

Source: Tripadvisor, Black Pearl Reykjavik

This discreet, all-suite retreat, opened in 2018, offers a refined, low-key alternative to traditional hotels. With no formal lobby, check-in is handled via keypad, and breakfast arrives quietly in a private basket. Each sleek apartment features a kitchenette and floor-to-ceiling windows showcasing Mount Esja, making it an excellent choice for families or those seeking solitude. 

• Location: Quiet street near Hallgrímskirkja, seven-minute walk to downtown.
• Number of rooms: 23 luxurious apartment suites.
• Pricing: Prices start at $298/night

Tower Suites Reykjavik

Source: Booking, Tower Suites Reykjavik

Soaring above Reykjavik on the 20th floor of the iconic Höfðatorg Tower, this ultra-exclusive retreat—opened in 2021—offers unparalleled panoramic views of the city, ocean, and Snæfellsjökull glacier. With just four high-design suites, privacy is paramount. 

Each features a private hot tub, personal butler service, and a telescope for aurora spotting. A favorite among billionaires and social media elites alike, the standout “Sky Lagoon Suite” boasts a 270-degree view—arguably the most breathtaking vantage point in the country.

• Location: Located in Reykjavik’s 101 district, the property sits near the historic Höfði House.
• Number of rooms: Eight luxury suites situated in one of Reykjavik's most prominent buildings.
• Pricing: Prices start from $515/night
  

Alda Hotel Reykjavik

Source: Booking, Alda Hotel Reykjavik

A haven for music lovers, this boutique hotel—opened in 2015—lets guests borrow record players and a
curated collection of vintage long-playing records (including Björk and Sigur Rós) for in-room listening sessions. The rooftop hot tub offers a front-row seat to Laugavegur’s neon glow, while a bike repair station and free rentals make city exploration effortless.

• Location: Situated in the heart of Reykjavik on Laugavegur, the city's main shopping street.
• Number of rooms: 90 rooms across four floors.
• Pricing: Prices start from $172/night

Eyja Guldsmeden Hotel

Source: Eyja Guldsmeden Hotel

This boutique stay combines the warmth of Icelandic wool with the elegance of Balinese four-poster beds, creating a cozy yet stylish retreat. Sustainability is key—92% solar-powered with a geothermally heated wooden hot tub in the courtyard. Mornings start with an organic breakfast, featuring skyr waffles, while each stay includes a free one-hour bike tour map for effortless exploring. 

• Location: This hotel is located close to Laugavegur, Reykjavík’s main shopping street, making it convenient for exploring the city's shops, restaurants, and nightlife.
• Number of rooms: Four floors, 65 rooms, all non-smoking.
• Pricing: Average price is $200/night

Sandhotel Reykjavik

Source: Booking, Sandhotel Reykjavik

Built in 2018 around Reykjavik’s oldest bakery, Bernhöftsbakarí (open since 1834), this literary-themed hotel blends storytelling with the scent of fresh cinnamon rolls. Each room comes stocked with shelves of Icelandic novels. The Writer’s Lounge fuels inspiration with strong coffee and rhubarb cake, making it a haven for book lovers and pastry enthusiasts alike.

• Location: On Laugavegur, Reykjavik’s main shopping street, directly above the legendary bakery.
• Number of rooms: 79 rooms featuring contemporary, stylish design.
• Pricing: $206 - $347/night

Kvosin Downtown Hotel

Source: Booking, Kvosin Downtown Hotel

Set in a 19th-century building, Kvosin’s 24 apartment-style suites resemble a local artist’s loft—exposed brick, rotating gallery exhibits, and thoughtfully stocked mini-kitchens featuring Icelandic staples like smoked lamb and rye bread. The real hidden gem is the basement sauna modeled after Viking bathhouses. 

• Location: Located in central Reykjavik, next to Austurvöllur Park, Reykjavik Cathedral, and Parliament.
• Number of rooms: 24 rooms.
• Pricing: Accommodations start at $225/night

Cheap hotels in Reykjavik 

Iceland may be known for its high prices, but these budget-friendly options offer comfort and quality without the hefty cost:

Hlemmur Square Hostel

Source: Hlemmur Square Hostel

Hlemmur Square is a unique accommodation in Reykjavik, blending the social atmosphere of a hostel with the comforts of a boutique hotel. Located on Laugavegur, the city's main shopping street, it occupies a 1930s art deco building. The property offers both dormitory-style rooms and private hotel rooms, catering to a diverse range of travelers.

• Location: Central, near the bus terminal and Laugavegur shopping street.
• Number of rooms: 25 rooms across five floors.
• Pricing: Hostel beds start at $22, while hotel rooms begin at $176
  

Kex Hostel

Source: Booking, Kex Hostel

Set in a former biscuit factory, Kex Hostel blends industrial-chic design with a vibrant social scene. A favorite among backpackers and creatives, it features vintage furniture, a lively bar, and regular events, including weekly pub quizzes and live music nights. More than just a place to stay, it’s a cultural hub in the heart of Reykjavik.

• Location: Old harbor district, a short walk from Harpa Concert Hall.
• Number of rooms: Kex Hostel offers 42 rooms, accommodating up to 215 guests.
• Pricing: Standard rooms start at $35 per night.
  

Loft Hostel

Source: Booking, Loft Hostel

Loft Hostel isn’t just a place to sleep—it’s a community hub with a strong commitment to sustainability. As an eco-certified hostel, it takes steps to reduce waste, save energy, and promote responsible tourism. The rooftop terrace offers stunning city views, perfect for spotting the Northern Lights or enjoying the midnight sun. 

• Location: Right on Bankastræti, in the heart of downtown Reykjavik.
• Number of rooms: There are 18 dormitory rooms in total, with six or eight beds each. 
• Pricing: Price for one night is around $49

Your guide to eSIMs for Reykjavik travel

Staying connected during your visit to Reykjavik is seamless with eSIM technology. Here are some eSIM providers to consider:​

• Holafly offers unlimited data eSIM plans tailored for tourists in Iceland, ensuring seamless internet access without the need for physical SIM cards. With no data caps, it’s a hassle-free option for travelers who need constant connectivity.
  
• Truphone provides flexible eSIM data plans suitable for various trip durations and data requirements, allowing travelers to stay connected across Iceland. For instance, they offer a 3 GB plan valid for 30 days at $20 and a 5 GB plan for 30 days at $32.
  
• As a global eSIM provider, Ubigi offers affordable plans with extensive coverage, perfect for travelers seeking reliable internet access throughout Iceland. They offer a 3 GB plan valid for 30 days at $25 and a 10 GB plan for 30 days at $59.

With eSIM technology, you can enjoy hassle-free connectivity in Iceland, eliminating the need to swap physical SIM cards.