Reykjavik is a compact city, and that compactness is its greatest hospitality advantage.
Almost every hotel in the city centre places you within walking distance of the main attractions, such as Hallgrímskirkja, Harpa, the Old Harbour, Laugavegur, or the Settlement Exhibition, and within reach of the geothermal pools, restaurants, and galleries that make Reykjavik worth spending time in rather than simply using as a launchpad. The choice of where to stay is therefore less about proximity and more about character: what kind of Reykjavik you want to wake up in.
The city’s hotel scene reflects its broader design culture. Several properties are among the most architecturally considered small hotels in northern Europe. The Art Deco masterpiece Hotel Borg has been welcoming guests since 1930. The Edition, Marriott’s lifestyle brand, brings a genuinely international sophistication to a building on one of the city’s most significant streets. And the ION City Hotel on Laugavegur, lava stones woven into its décor, represents Iceland’s most compelling collision of the volcanic landscape with contemporary hospitality.
This guide covers the best Reykjavik hotels in 2026.
Key Takeaways
- Reykjavik’s best hotels are concentrated along Laugavegur and in the city centre, all within easy walking distance of the main attractions.
- Hotel Borg is Reykjavik’s most historic luxury hotel – an Art Deco building overlooking Austurvöllur square, open since 1930.
- The Reykjavik EDITION, from Marriott’s design-forward lifestyle brand, is the most internationally sophisticated hotel in the city.
- The ION City Hotel on Laugavegur brings the ION brand’s extraordinary design intelligence to a central location, with Icelandic lava stones woven through the décor.
- Reykjavik’s hotels are generally expensive by northern European standards, which reflects both the city’s high operational costs and the sustained international demand for Iceland as a destination.
Luxury Hotels
Hotel Borg
Hotel Borg is Reykjavik’s most iconic hotel and the address that carries the most historical and architectural weight in the city.
Opened in 1930 and designed in the Art Deco style that was transforming European cities and international ocean liners in that decade, the Borg overlooks Austurvöllur. It’s the central square of Reykjavik, and the site of the Icelandic Parliament and the city’s major civic gatherings, in a position of absolute centrality. The building was commissioned by Jón Ásgeir Jóhannesson, an Icelandic wrestler who became a circus performer in Europe and used the proceeds to build Reykjavik’s first luxury hotel.
The interior has been restored with care for the original aesthetic: warm gold tones, marble, period detailing, and the specific quality of a building that knows what it is and presents it without apology. The service maintains the standard that a hotel of this history and position is expected to deliver. Hotel Borg is Reykjavik’s answer to the grand European city hotels of the interwar period, in an entirely unexpected location.
Credit: Keahotels
The Reykjavik EDITION
On Austurstræti in the heart of the city, the Reykjavik EDITION brings Marriott’s most design-forward hotel brand to Iceland’s capital.
The EDITION brand is defined by the combination of exceptional design, food and beverage programming, and the specific atmosphere of a hotel that feels like the most interesting place in the city rather than simply the most comfortable. In Reykjavik, the brand’s approach has produced a hotel that reflects contemporary Icelandic aesthetic sensibility alongside international hospitality standards.
The rooftop terrace, the bar, and the restaurant are destination-quality spaces that attract locals as well as guests. This hotel has genuinely integrated into a city’s life rather than simply occupying a building in it.
Credit: Condé Nast Traveler
ION City Hotel
On Laugavegur which is Reykjavik’s main shopping and cultural street, the ION City Hotel is the urban expression of the ION brand, which built its reputation on the extraordinary ION Adventure Hotel in the Highland countryside.
Lava stones are incorporated throughout the décor as a specific reference to the volcanic geology of the city and the country. The rooms feature floor-to-ceiling windows framing the city views. The Sumac restaurant serves an inventive Icelandic-Lebanese-Moroccan menu that has made it one of Reykjavik’s most discussed dining addresses, independent of the hotel.
For visitors who want Laugavegur access, design-forward rooms, and food worth eating in the hotel, the ION City is the most complete central option.
Credit: Booking
Boutique & Design Hotels
Sand Hotel
Sand Hotel is Reykjavik’s most consistently praised boutique hotel for the combination of location, comfort, and the specifically personal atmosphere that the best boutique hotels create.
The unbeatable central position within easy reach of both the Old Harbour and Laugavegur and the superior comfort and cleanliness of the rooms make it the address most frequently cited by returning visitors who have worked through the city’s more obvious options and discovered what they actually want from a Reykjavik stay.
The staff are specifically and consistently praised for the quality and warmth of their service. It’s a rare consistency of mention that reflects a genuine culture of hospitality rather than standard hotel management.
Credit: Sand Hotel
Thingholt by Centre Hotels
Near Reykjavik’s cultural heart, Thingholt is the most design-focused of the Centre Hotels group’s Reykjavik properties. It’s a boutique hotel with dark, moody tones, stone accents, and Icelandic artwork that draws its decorative inspiration from the volcanic and glacial landscape.
The rooms are warm and comfortable, the location is quiet relative to the Laugavegur hotels, while remaining entirely walkable to the centre. Thingholt is the right address for visitors who want a design-forward boutique hotel that feels specifically Icelandic rather than generically Nordic.
Credit: Booking
Hotel Apotek
On Austurstræti in the city centre, Hotel Apotek occupies a building that housed the city’s first pharmacy and retains its historic character in a boutique hotel of considerable personality.
The rooms are compact but beautifully appointed, and the Apotek restaurant on the ground floor is worth visiting regardless of where you are staying. The combination of the historic building, the central location, and the quality of the restaurant gives Hotel Apotek a completeness that purely design-focused hotels do not always achieve.
Credit: Hotels .com
Exeter Hotel
Near the Old Harbour, the Exeter Hotel is a four-star design hotel that brings an industrial-contemporary aesthetic to a building positioned between the city centre and the harbour’s restaurant and culture cluster.
The 106 rooms are styled with the confidence of a hotel that has made specific design decisions rather than defaulting to convention, and the location between Laugavegur and the Harpa Concert Hall, makes it one of the most practically positioned design hotels in Reykjavik.
Credit: Tripadvisor
Iceland Parliament Hotel
The Iceland Parliament Hotel, part of the Hilton Curio Collection, occupies a building on Austurvöllur directly adjacent to the Alþingi (Iceland’s Parliament) in a position that makes it one of the most historically resonant addresses in the city.
The geothermal spa (Parlament Spa) is one of the most consistently praised hotel amenities in Reykjavik: a spa built around Icelandic geothermal traditions in a setting that the hotel’s central position uniquely allows. The Rostin Restaurant & Bar is a well-regarded in-house dining option.
For first-time visitors to Reykjavik who want a central, well-serviced hotel with spa facilities and a historically significant address, the Parliament Hotel provides the most complete package.
Credit: Iceland Hotel Collection by Berjaya
Characterful & Neighbourhood Hotels
Hótel Leifur Eiríksson
Directly opposite Hallgrímskirkja at the top of Skólavörðustígur, Hotel Leifur Eiríksson is the most dramatically positioned hotel in Reykjavik — the church’s facade visible from the street-facing rooms in a way that makes the building feel like a specific feature of the stay rather than simply part of the neighbourhood.
The hotel is smaller and more modest in its ambitions than the luxury addresses below the hill, but the quality of the service, the warmth of the atmosphere, and the extraordinary position make it one of the most recommended mid-scale options in Reykjavik. The Leifur Eiríksson statue stands in front of the church opposite; the breakfast room looks directly at both.
Credit: Tripadvisor
Kvosin Downtown Hotel
In the historic heart of old Reykjavik you’ll find the Kvosin Downtown Hotel. It occupies a beautifully converted historic building and offers apartment-style rooms that provide kitchen facilities and more space than standard hotel rooms.
The format suits visitors who want to stay in Reykjavik for more than a couple of days and prefer the flexibility of self-catering alongside hotel services. The location is one of the quieter parts of the city centre, giving it a residential quality that the Laugavegur hotels do not have.
Credit: Best Served Scandinavia
Centerhotel Arnarhvoll
Above the waterfront between the Old Harbour and the Parliament building, Centerhotel Arnarhvoll has some of the finest views of any hotel in Reykjavik. Their rooms are facing east and north that look over the bay toward the mountains, and the Fjarðarborgin restaurant uses those views to their full advantage.
The hotel is part of the Centre Hotels group and benefits from the group’s local knowledge and consistency. The harbour location places it close to Harpa, as well as the waterfront restaurants, and the whale watching departure points. It’s the most practical position for visitors whose Reykjavik itinerary centres on the harbour and the Old Harbour rather than Laugavegur.
Credit: Center Hotels Iceland
Guesthouse Sunna
A short walk from Hallgrímskirkja, Guesthouse Sunna is one of Reykjavik’s finest examples of the smaller, more personal accommodation that the city offers alongside its hotels. It’s a very well-run guesthouse with comfortable, clean rooms and the warmth of a property that cares specifically about each guest’s experience.
For visitors who want something more personal and more affordable than the major hotels without sacrificing quality or location, Sunna is among the best options in the city. The free Wi-Fi, the generous breakfast, and the walking distance from the main sights make it a consistently recommended alternative to the larger hotels.
Credit: Hey Iceland
Practical Notes
Location in Reykjavik. The city is so compact that almost any central hotel is walkable to the main sights. The two axes are worth understanding: Laugavegur (the main shopping and restaurant street, running east-west through the centre) and the Old Harbour (north of the centre, home to Harpa, the whale watching boats, and the harbour restaurants). Hotels on Laugavegur put you in the middle of the city’s social energy; hotels near the harbour put you on the waterfront with slightly more tranquillity.
Geothermal hot water. All Reykjavik hotels have hot water heated by the city’s geothermal system. The water smells faintly of sulphur which is normal, and entirely harmless. It is simply the smell of Iceland’s extraordinary geology.
Book well ahead. Reykjavik hotels, particularly in the summer season and at the winter peaks of December and January, fill quickly. The most popular boutique properties include Sand Hotel, Hotel Borg, and the EDITION and should be booked months ahead for peak dates.
Conclusion
The best Reykjavik hotels are, at their finest, an extension of what makes the city itself extraordinary: buildings with personality, staff who understand their city, locations that put you in the middle of a place worth being in.
Hotel Borg’s Art Deco grandeur on Austurvöllur. The ION City’s volcanic lava stones on Laugavegur. Sand Hotel’s boutique warmth is within walking distance of everything. Leifur Eiríksson’s church view from every street-facing window.
Wherever you stay in Reykjavik, the city will give you the rest.
To experience Reykjavik and Iceland’s extraordinary landscape as part of a curated private journey, explore our bespoke Iceland tours.
FAQ
What is the best hotel to stay in Reykjavik?
Top hotels in Reykjavik include Hotel Borg, Canopy by Hilton Reykjavik City Centre, and ION City Hotel. These are popular for central location, comfort, and easy access to attractions.
What is the best area to stay in Reykjavik, Iceland?
The best area in Reykjavik is the city centre (101 district). It’s walkable, close to restaurants, nightlife, the harbour, and landmarks like Hallgrímskirkja and Harpa Concert Hall.
What is the best hotel to stay at in Iceland?
The best hotel depends on your trip style. In Iceland, top choices include luxury options in Reykjavik, countryside hotels near the Golden Circle, and unique stays like glacier or aurora lodges for northern lights viewing.
Is it better to stay in Reykjavik or Keflavik?
For most travellers, Reykjavik is better because it has more hotels, restaurants, and tour options. Keflavik is mainly useful for short stays near the airport or early/late flights.
