Home › Iceland › Where to stay

Where to stay in Iceland

Iceland is a volcanic island defined by its Ring Road, which dictates your base. While Reykjavik serves as the primary urban hub for logistics, the true experience requires splitting time between the South Coast’s dramatic waterfalls and the northern volcanic fields near Akureyri. Choosing a base hinges on your rental vehicle's capability and how much time you are willing to spend driving through shifting, often unpredictable coastal weather patterns.

Iceland

Reykjavik 101

UpscaleFirst-time visitors seeking immediate access to the country’s best dining, nightlife, and essential tour departure points.

This central district hums with energy, centered around the Laugavegur shopping street. It is compact and entirely walkable, allowing you to easily reach the Hallgrímskirkja church or the Harpa Concert Hall on foot. You are surrounded by independent coffee shops and the old harbor, making it the most convenient launchpad before venturing into the more remote, rugged landscapes of the interior.

Vik i Myrdal

Mid-rangeLandscape photographers and hikers who need proximity to the black sand beaches and dramatic South Coast cliffs.

Vik is essentially a service hub nestled beneath the Katla volcano. It is small, functional, and deeply atmospheric when the fog rolls off the North Atlantic. You can walk to the Reynisfjara black sand beach trailheads and the iconic Vik i Myrdal Church that overlooks the village. It is the perfect strategic stop to beat the tour buses arriving from the capital.

Akureyri

Mid-rangeTravelers exploring the North who want a proper town feel without the intense tourism saturation of the south.

Often called the Capital of the North, Akureyri sits at the base of Eyjafjörður fjord. The town center is walkable and features excellent botanical gardens and local geothermal pools. It feels more settled and quiet than Reykjavik, providing a great base for visiting Lake Mývatn and the surrounding volcanic craters. The main street, Hafnarstræti, is lined with timber houses and local galleries.

Find hotels in IcelandMore experiences on Klook

Rent a car in Iceland

Compare rental cars from local and international companies, with free cancellation on most bookings.

Compare car rentals in Iceland

One thing to think about

Avoid staying in suburban commercial zones near Keflavík airport unless you have an exceptionally early flight. These areas lack the character and proximity to nature that define an Icelandic trip, forcing you into unnecessary driving back toward the city or the southern coastal routes.

Other places to stay in Iceland: lastminute.com · Megabon

Once you have a bed

The things that sell out first in Iceland are the small-group tours and the skip-the-line tickets.

Things to doDay tripsFull Iceland guide

Top tours & activities in Iceland

Common questions

Do I really need a 4x4 rental car?

If you stick strictly to the Ring Road during summer, a standard sedan is sufficient. However, if you plan on driving the F-roads into the highlands or traveling during the shoulder seasons when snow is common, a 4x4 is essential for safety and insurance compliance. Do not gamble with terrain you are not equipped for.

When is the best time to see the Northern Lights?

The Aurora Borealis is visible from late August through mid-April. You need dark, clear skies and high solar activity. Staying outside the major light pollution of Reykjavik increases your chances significantly. Patience is vital, as weather patterns in Iceland shift rapidly, frequently obscuring the sky even when solar activity is at its peak.

Are the geothermal lagoons worth the entry fees?

Blue Lagoon is undeniably touristy and expensive, but the facilities are pristine and the logistics are seamless for travelers. If you prefer a quieter, more authentic experience, seek out local municipal pools in towns like Akureyri or the lesser-known lagoons in the north. They offer similar geothermal benefits at a fraction of the cost.

Hotel links go to Booking.com. If you book through them TonyPlan earns a small commission — the price you pay is exactly the same.