Imagine sipping morning coffee in a rustic farmhouse surrounded by grazing sheep—or soaking in a geothermal hot tub with front-row seats to the Northern Lights. Iceland’s accommodation scene reflects its dramatic landscapes, offering everything from cozy countryside retreats to sleek design hotels. Let’s explore your options for unlocking the perfect Icelandic stay.
Iceland Accommodation Guide: Find Your Perfect Stay From Cozy to Luxurious
Iceland’s lodging spectrum matches its diverse terrain, with options for every traveler and budget. Whether you’re chasing waterfalls on a shoestring or seeking five-star relaxation, here’s what to expect:
Budget-Friendly Bases: Hostels and guesthouses offer clean, no-fuss comfort—think comfy beds, kitchen access, and free WiFi. Many include breakfast buffets with skyr (Icelandic yogurt) and fresh bread, perfect for fueling up before adventures in pricey Iceland.
Mid-Range Magic: Step up to hotels and boutique guesthouses where you’ll find private bathrooms, geothermal hot tubs, and Icelandic design touches. Breakfast often stars local cheeses, smoked fish, and rye bread baked that morning.
Splurge-Worthy Sanctuaries: Luxury here means architecture that frames nature—think glass-walled suites facing glaciers and restaurants serving Arctic char caught that day. Iceland’s strict hotel ratings mean 4-stars often feel like 5-star experiences elsewhere.
Your choice of stay transforms your Icelandic journey—whether it’s midnight sun viewings from a cottage deck or stargazing between geothermal pool dips.
7 Unique Ways to Stay in Iceland
Iceland rewards travelers who match their lodging to their spirit of adventure—here’s how to bed down like a local or indulge in once-in-a-lifetime luxury.
Guesthouses (Gistiheimili): Homestyle Charm
Perfect for: Authentic connections & wallet-friendly comfort
Price: From $85/night
Family-run guesthouses serve Icelandic hospitality at its warmest. Picture wood-paneled dining rooms where travelers swap stories over lamb soup, or farmhouse kitchens fragrant with freshly baked laufabrauð (leaf bread). Many hosts happily share tips on hidden hot springs or puffin-viewing spots. Don’t miss the breakfast spread—often featuring homemade jams from summer berries and skyr so thick it eats like dessert.
Hotels: Modern Comfort Meets Nordic Design
Perfect for: Convenience & contemporary style
Price: From $125/night
Icelandic hotels blend minimalist aesthetics with functional warmth—expect wool throws, basalt-inspired décor, and lobby fireplaces crackling with birch wood. Reykjavík’s design hotels burst with art, while countryside properties maximize views of lava fields or fjords. Bonus: Most use geothermal heating, so you’ll shower in eco-friendly warmth straight from the earth.
Cabins & Cottages: Your Private Wilderness Retreat
Perfect for: Aurora seekers & road-trippers
Price: From $105/night
Nothing beats your own little red cottage against Iceland’s epic backdrops. Many include compact kitchens for whipping up meals with local lamb or langoustines, plus “hot pots”—outdoor tubs where you’ll soak under starry skies. Pro tip: Winter travelers should confirm plowed roads and 4×4 access—some remote cabins become snowbound hideaways.
Camping & Campervans: Freedom on Four Wheels
Perfect for: Budget explorers & summer adventurers
Price: From $18/night (campsites)
Iceland’s campsites range from no-frills fields to “glampsites” with BBQ pavilions and geothermal showers. Campervans let you chase midnight sun panoramas and wake up by glacier lagoons—just pack warm bedding! Remember: Wild camping is mostly prohibited, so always use designated areas.
Glamping: Nature Immersion Without Compromise
Perfect for: Romantic escapes & Northern Lights chasers
Price: From $140/night
Sleep under the Iceland sky without sacrificing comfort. Transparent-roofed domes offer unobstructed aurora views from your heated bed, while safari-style tents feature private hot tubs. Many sites include telescopes and “light alerts” for nighttime celestial shows. Most operate May-September, though some winter-ready domes stay open year-round.
Luxury Resorts & Spas: Icelandic Indulgence
Perfect for: Splurge-worthy moments & wellbeing seekers
Price: From $315/night
Icelandic luxury means harmonizing with nature. Soak in infinity pools overlooking volcanic valleys, dine on Michelin-starred tasting menus starring skyr-cheese desserts, or unwind with blue lagoon algae wraps. Top-tier properties offer bespoke experiences—think private glacier hikes followed by champagne toasts in secret geothermal grottoes.
Farm Stays: Heartbeat of Rural Iceland
Perfect for: Family travelers & cultural curiosity
Price: From $98/night
Wake to the clucking of free-range chickens and help collect eggs before breakfast. Many farms offer activities—ride fluffy Icelandic horses, bottle-feed lambs in spring, or learn centuries-old wool-dyeing techniques. Accommodations range from simple rooms to self-contained cottages, often with kitchens stocked with farm fresh dairy and vegetables.
No matter your travel style, Iceland’s accommodation becomes part of the adventure. Mix and match stays—spend days trekking volcanic trails and nights soaking in designer hot springs. The land of fire and ice promises memories as unforgettable as its landscapes.
Farm stays
Rustic Farm Stays: Experience Authentic Icelandic Country Life
Starting around 12,000 ISK ($85 USD) per night
For an immersive countryside experience, Iceland’s farm stays offer cozy accommodations in charming settings like converted barns. Many welcoming hosts invite guests to participate in daily rural activities—from gathering fresh eggs to feeding friendly farm animals.
Visit during autumn and you might witness (or even join) Iceland’s thrilling annual sheep round-up—a true cultural tradition. Your meals become part of the experience too, featuring farm-to-table ingredients like succulent lamb and homemade dairy products fresh from the source.
Highland Huts: Wilderness Adventure Basecamps
From 8,000 ISK ($55 USD) per night
Hikers exploring Iceland’s remote interior will find basic but rewarding accommodation in these rustic mountain shelters. Strategically located along popular trails, they offer simple bunk beds in shared spaces, often heated by a wood-burning stove—little more than a roof over your head in raw nature.
Come fully prepared with sleeping bags and wilderness-ready supplies, as amenities like showers are uncommon. Fresh drinking water comes directly from pure mountain streams (we recommend checking our Iceland health guide for safety tips). These sparse yet magical hideouts operate only during summer months and book rapidly—reserve early for unforgettable nights beneath Iceland’s midnight sun or star-filled skies.
Magical Igloos & Ice Hotels: Sleeping Under the Arctic Sky
From 35,000 ISK ($245 USD) per night
While not originally Icelandic, these innovative accommodations let you sleep in style amid winter wonderlands. Transparent “bubble” domes reign supreme—perfect for watching the Northern Lights dance overhead from your cozy bed. Northern destinations sometimes build temporary ice structures for the ultimate frosty novelty stay.
You’ll stay remarkably warm in thermal sleeping bags, though several properties offer heated cabins nearby where you can thaw out or spend the night if the arctic charm becomes too authentic!
Sustainable Eco-Lodges: Low-Impact Luxury
From 20,000 ISK ($140 USD) per night
Iceland’s eco-conscious stays prioritize environmental harmony through renewable energy systems (geothermal or hydro-powered), reclaimed building materials, and thoughtful resource management. Many feature locally sourced organic meals and secluded locations designed to strengthen your nature connection.
Some lodges offer immersive activities like guided foraging walks, environmental workshops, or conservation volunteer days—perfect for travelers seeking meaningful experiences beyond typical tourism.
Iceland Accommodation Costs: What to Expect
- Peak Season (June-August): Highest prices across all regions
- Budget Stays: 8,000–15,000 ISK ($55–105 USD)
- Mid-Range: 15,000–30,000 ISK ($105–210 USD)
- Luxury: 80,000 ISK ($560 USD+)
Most rates include breakfast and VAT (11%). Reykjavík’s city-center parking often carries additional fees, while rural accommodations frequently require two-night minimums during summer. Save significantly by visiting during shoulder seasons—October rates can be half of July’s prices!
Top Iceland Regions for Every Travel Style
Reykjavík: Vibrant Urban Hub
Iceland’s compact capital (postcode 101) offers walkable access to museums, restaurants, and cultural landmarks. Stay near the Old Harbor for easy whale-watching tours, or choose family-friendly Laugardalur for its famous geothermal pool and budget-friendly options with excellent public transport links.
South Coast: Waterfall & Beach Paradise
Base yourself here for efficient Golden Circle exploration and iconic sights like black sand beaches. Selfoss provides comprehensive services and central access, while picturesque Vik’s coastal location makes it ideal for photographers chasing dramatic seascapes at Reynisfjara.
Experience Iceland’s Magic: Where Rest Meets Adventure
Imagine waking up to steaming geothermal waters at your doorstep or falling asleep to the gentle crash of Atlantic waves. Choosing where to stay in Iceland can transform your trip from ordinary to extraordinary. Let’s explore some unforgettable bases across this land of fire and ice.
Snaefellsnes Peninsula: Iceland in Miniature
Often called “Iceland in Miniature,” the Snaefellsnes Peninsula packs glaciers, volcanic craters, and dramatic sea cliffs into one breathtaking region. These charming bases let you experience it all:
Stykkishólmur: This postcard-perfect fishing town charms visitors with colorful houses and panoramic harbor views. It’s your gateway to island-hopping adventures via ferry to the Westfjords.
Arnarstapi: Wake up to the mighty Snæfellsjökull glacier looming overhead. This coastal village serves as the perfect trailhead for unforgettable hikes along rugged sea cliffs.
Hellnar: Escape to this whisper-quiet hamlet when you crave bird songs over tourist crowds. The neighboring lava fields and sea caves feel like your private playground.
Pro Tip: Summer availability disappears faster than midnight sun! Book at least 4 months ahead for these sought-after locations.
The Westfjords: Iceland’s Secret Frontier
For travelers craving raw, unfiltered beauty, Iceland’s Westfjords deliver spectacular isolation. Prepare for roads that hug cliff edges and villages where sheep outnumber people.
Ísafjörður: The cultural heartbeat of the Westfjords blends cozy cafes with converted fishermen’s cottages serving as guesthouses. Don’t miss the chance to kayak among silent fjords right from town.
Patreksfjörður: Base yourself here to discover Rauðisandur’s miles-long pink sand beaches and Latrabjarg’s dizzying bird cliffs. In summer, puffins nest so close you can almost shake hands with them!
Experience true Icelandic hospitality at family-run farm stays dotting the region – you might just get invited for fresh langoustine straight from the fjord.
North Iceland: Nature’s Playground
From whale-filled bays to bubbling geothermal zones, Northern Iceland serves adventure with every sunrise.
Akureyri: Nicknamed “The Capital of North Iceland,” this vibrant town combines urban comforts with easy access to skiing, hiking, and soothing thermal baths. The botanical gardens burst with color even in summer’s endless light.
Húsavík: As Iceland’s whale watching capital, this charming port town offers front-row seats to humpback acrobatics. Book a harbor-side guesthouse and wake up to breaching whales with your morning coffee.
Lake Mývatn: Surround yourself with otherworldly volcanic landscapes from a cozy cabin. Perfect for birders, hikers, and anyone who loves soaking in milky-blue geothermal pools under open skies.
Smart Iceland Travel: Savvy Booking Strategies
Master these insider tips to secure Iceland’s best stays while avoiding common pitfalls:
- Beat the booking rush: Popular summer spots vanish 4-6 months out. For Northern Lights season (September-March), lock in rural accommodation 3 months early.
- Weather-proof your plans: Choose accommodations with flexible cancellation – Iceland’s moody skies might rearrange your itinerary without notice.
- Location trumps luxury: A simple Vík guesthouse beats a Reykjavik palace if it means watching glacier waves from your breakfast table.
- Conquer winter wisely: Confirm heating systems and 4WD access for remote cabins. Many highland lodges close completely from October-April.
- Kitchens = Cost savings: Self-catering options save precious kronur. Trust us – a hearty farm breakfast fuels full days of exploration.
- Highland adventures? Book official mountain huts (like Ferðafélag Íslands) the moment hiking season dates are announced.
- Fjord access check: Always verify seasonal road openings at road.is before committing to Westfjords winter stays.
- Hot tub heaven: Filter for natural hot springs access – nothing beats glacier views from your private geothermal soak after an adventurous day.
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