Where to Stay in Iceland: Charming Cabins to Swanky Hotels

by | Last updated Aug 25, 2023 | Hotel Reviews Europe, Iceland

The southern coast of Iceland truly has the most spectacular sites! Walk behind a powerful waterfall, scramble up towering sea stacks, or witness the beauty of a slowly drifting glacier. Iceland is truly unique and offers some incredible experiences. The best way to see these top sites is a road trip over several days. I’ll show you our top three hotel picks of where to stay in Iceland to make your trip most enjoyable.

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Map of Where to Stay in Iceland + Top Sites 

Map of Where to Stay in Iceland

Where to stay in Iceland map

My husband and I came up with a crazy, aggressive itinerary.

We had 4 days to explore the Golden Circle, the South Coast, and Reykjavik. I truly envy Europeans’ month-long vacations, but oh well, we had to maximize what precious PTO days we did have.

Do not get lost in the busyness of the map above.

The whole point is to show all the top sites for the Golden Circle, South Coast, and Reykjavik. Once you see where the all sites are clustered, it will then make sense what hotel locations are best.  

4 days. 3 nights. 3 hotels.

It can be done. 

Although Iceland does not seem very big, the top sites along Iceland’s southern coast are quite spread out. It takes close to 5 hours to drive from Reykjavik to Jökulsárlón Glacier Lagoon, the most distant site along the southern coast.

Needless to say, you are not doing this as a day trip. You will need places to stay along the way. I am going to share our 3 personal hotel picks that made our trip enjoyable and seamless.

In case my original picks are booked, I have also included an additional highly-rated backup for each location.  

Where to Stay in the Golden Circle

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01- SKEIðVELLIR PANORAMA HOUSE

Skeiðvellir Panorama house

Where to stay near the Golden Circle: Skeiðvellir Panorama House

Fagrabrekka Guesthouse was the first accommodation we stayed at on day #1 of our road trip.

We arrived on a red-eye flight and drove straight from Keflavík International Airport past Reykjavik and hit all the top sites on the Golden Circle. If you are still trying to plan out your itinerary, check out my 19 Best Things to Do in Iceland.

Unfortunately, the very highly-rated Fagrabrekka Guesthouse was recently sold and is unable to be booked at this time. Hopefully, the new owners will have it running again soon.

The good news is that there’s another adorable property with the same aesthetic and killer reviews called Skeiðvellir Panorama House

The house has beautiful modern decor and a large terrace to enjoy your morning coffee. It also has floor-to-ceiling windows, which makes for a great indoor-outdoor living space. 

Booking.com Rating: 9.7

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02- INNI BOUTIQUE APARTMENTS

INNI Boutique Apartments

INNI Boutique Apartments

INNI Boutique Apartments are beautifully decorated with blue-grey color palettes and soft wood accents. Fresh. Modern. Fully equipped kitchen.

Plus, you have access to a hot tub and steam bath! Great for relaxing those tired muscles after a hike.

Booking.com Rating: 9.5 

Expedia Rating: 9.8

Where to Stay in the South Coast

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01- HOTEL KRIA

Hotel Kria in Vik Iceland

Hotel Kria in Vik, Iceland

Since Jökulsárlón Glacier Lagoon was going to be the furthest point on our road trip, we decided to make the town of Vik our home base.

See the map above again for orientation.

Vik is about the halfway point between Reykjavik and Jökulsárlón Glacier Lagoon. The town of Höfn would be the next logical location for your hotel stay if you were planning to travel the entire Ring Road.

Hotel Kria was the second accommodation on our road trip and is located in Vik. Its 72 rooms and 1 suite have a very modern interior design. The hotel has two floors and two room types: standard and mountain view.

Avoid the rooms in the front of the building if possible. They face the main road and gas station. Our request for a mountain view room on the second floor was kindly accommodated.

View from our room at Hotel Kria in Vik Iceland

Mountain view room at Hotel Kria in Vik, Iceland

Day #2 of our Icelandic adventure was jam-packed with some incredible sites.

We witnessed two of Iceland’s most spectacular waterfalls,  Skógafoss and Seljalandsfoss Waterfall before driving to Diamond Beach and Jökulsárlón Glacier Lagoon.

In addition, we got some great exercise by hiking to the very unique Svartifoss Waterfall and walking around the out-of-this-world Fjaðrárgljúfur Canyon.

If that was not enough, we squeezed in a quick visit to the Reynisdrangar sea stacks by midnight. The Midnight Sun really does energize you with superhuman energy.

Hotel Kria offers a great base to enjoy all these outdoor activities. 

Walking behind Slejalandsfoss waterfall in Iceland

Walking behind Slejalandsfoss waterfall in Iceland

Although I prefer the small, personalized boutique stays, this hotel location and experience still worked out great for our road trip. 

Booking.com Rating: 8.9

Expedia Rating: 9.2

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02- MAGMA HOTEL

Magma Hotel

Magma Hotel 

The Magma Hotel is an intimate boutique property that serves as a fantastic base to explore Iceland’s South Coast.

The rooms offer beautiful lake and lava field views from the large floor-to-ceiling windows.

Booking.com Rating: 9.4

Expedia Rating: 9.6

Where to Stay in Reykjavik

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01- REYKJAVIK KONSULAT HOTEL

Reykjavik Konsulat Hotel

Reykjavik Konsulat Hotel

On day #3 of our whirlwind road trip, we slowly made our way back to Reykjavik.

Along the way, we stopped by to see some puffins and the Dyrhólaey Arch and then soaked in the Reykjadalur Hot Springs before checking in to our hotel in Reykjavik.

The Reykjavik Konsulat Hotel, Curio Collection by Hilton is gorgeous!

This building was built in the 1900s and used to be a department store. When it was transformed into a hotel, some features were still kept. You will see the exposed original stone walls in some of the rooms.

The rooms are modern, and I loved the mid-century design touches. Very classy hotel. I will say I felt way underdressed when we first arrived.

We came straight from hiking and soaking in the Reykjadalur Hot Springs, so you can imagine how we looked. Oh well, a quick shower did the trick and then we explored all the local Reykjavik sites.

The Reykjavik Konsulat Hotel Curio Collection by Hilton in Reykjavik Iceland

Bar at the Reykjavik Konsulat Hotel Curio Collection by Hilton 

The location is perfect.

It is situated right next to Bæjarins Beztu Pylsur, the famous iconic hot dog stand in Iceland. You can read all about it in my Iceland Foodie Guide.

Other sites within close walking distance include major landmarks such as the Hallgrímskirkja Church and the Sun Voyager monument. Plus, my favorite bar in Iceland was a 1-minute walk away.

Booking.com Rating: 9.1

Expedia Rating: 9.4

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02- EYJA GULDSMEDEN HOTEL

Eyja Guldsmeden Hotel

Eyja Guldsmeden Hotel

Eyja Guldsmeden Hotel is a boutique property that offers inviting, light-filled, Balinese-style rooms. It also has a restaurant, bar, gym, and bicycle hire.

It’s not located right in the heart of town but an easy walk away. Very friendly staff. The high reviews speak for themselves.

Booking.com Rating: 9.0

Expedia Rating: 9.4

Final Thoughts 

The most spectacular sites in Iceland are located along the Golden Circle and the South Coast. Because the sites are all spread out, a road trip is a must. Picking the right hotels as your base is crucial for making a memorable, seamless experience. We were very happy with our three accommodation picks.

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