Iceland is an amazing land with extreme geography: mountains with glaciers and plains with active volcanoes. Whether you’re going to Iceland in June or January, December to be precise, to see the midnight sun or watch the Northern Lights, booking the proper type of accommodation in Iceland is the key to one’s amazing trip. This guide provides detailed information on what details a traveler needs to factor while choosing the perfect accommodation depending on the traveler’s type, budget and plan.

Understanding Accommodation Options in Iceland – Right Accommodation in Iceland
Iceland trip planning requires understanding the Iceland types of lodgings that are available to visitors. Iceland specializes for each type of traveler, it has conventional and eccentric tourist facilities. Here’s an in-depth look at the choices:
Hotels
Iceland hotels are famous for their comfort and services that provided to guests of local accommodations. They are easily found in cities; specifically in Reykjavik and around points of interest including the Golden Circle.
- Features: Look forward to state-of-art structures, their own eateries and procuring facilities for the guided tours pickups.
- Best For: Business and high end leisure travelers, as well as individuals in a hurry.
- Example: Featuring art deco architecture with a very contemporary interior, the Hotel Borg in Reykjavik could be recommended for those travelers who expect some luxury.
Guesthouses and B&Bs
There are guesthouses and bed and breakfast that have a more personalized service than most hotels. Locally owned, they give information about the Icelandic way of life.
- Advantages: Easy on the wallet and also personal.
- Best For: Very economical and frugal traveler as well as guest who expects to get an exposure of the local cultural experience of the respective country.
- Pro Tip: Booking should be done earlier in summer seasons, end of year or Easter holidays since many people are likely to consider these options.
Hostels
Hostels are suitable for those people who like to make new acquaintances as there are many shared areas in hostels. Some of the hostels found in Iceland have individual beds in rooms as well as dormitories.
- Benefits: Economical and many a time, situated close to tourist sites.
- Best For: Specific target market consists in the backpackers and other tourists who travels alone.
- Example: The youth travellers love to frequent the Reykjavik Downtown HI Hostel as it is very central and cheerfully staffed.
Cabins and Cottages
Cottages and cabins mean that two people can stay close to each other and at the same time close to nature. He noted that they are appropriate for people who are on the move in search of a quiet and picturesque place.
- Why Choose: Have your breakfast with the view of Icelandic fjords or volcanic terrains.
- Best For: Families, as well as newlyweds and couples with a small child.
- Notable Mention: The unique luxury accommodation of the Blue Lagoon Retreat Hotel consists of private individual luxury suites with a natural hot spring.
Farm Stays
To get involved in the real rural feeling there is nothing like a farm stay. These are actual farms where you will be able, not only to stay, but also to meet horses and tour the picturesque landscape of Iceland.
- Unique Factor: May also refer to farm to table food that is locally produced and procured.
- Best For: Families with kids, people who love nature.
- Fun Fact: Accommodation in a farm house is the best way to get acquainted with the farming of sheep, which is very popular in Iceland.
Camping and Campervans
Camping is more flexible and much cheaper then any other kind of travelling and a campervan combines the two basic needs – travelling and rest.
- Essentials: Iceland boasts a pretty good maintained campsites network and some of them are operated in all seasons.
- Best For: Explorers and for the penny-pinching.
- Important Note: Iceland has some rules for wild camping. It is very important to camp only on approval designated campsites.
Luxury and Boutique Stays
- For luxury and more of it there are several luxury and boutique hotels in Iceland.
- What to Expect: Customized services, special privileges where the client is the king, special architectural features.
- Best For: Newlyweds or those who are on holiday or anyone travelling for leisure.
- Example: Ion Adventure Hotel located near Thingvellir National Park is one of the examples of eco-luxury hotel company.
Summary Table of Accommodation Types
Accommodation Type | Best For | Price Range | Key Locations | Unique Feature |
Hotels | Luxury Travelers | $$$ | Reykjavik, Golden Circle | Modern amenities, tour services |
Guesthouses | Budget Travelers | $$ | Nationwide | Authentic Icelandic experience |
Hostels | Solo Travelers | $ | Major tourist hubs | Social, cost-effective |
Cabins/Cottages | Couples/Groups | $$ – $$$ | Rural and scenic areas | Privacy, natural surroundings |
Farm Stays | Families/Nature Lovers | $$ | Countryside | Farm-to-table experiences |
Camping/Campervans | Adventurers | $ | Across Iceland | Flexibility, affordability |
Luxury Hotels | Honeymooners | $$$$ | Select locations | Exclusive, high-end facilities |
Factors to Consider When Choosing Accommodation
Picking the right location for your accommodation in Iceland is never easy. These potentials include geographical location, facilities available, the prices charged and the season in which you will be visiting the establishment. This article provides you an overview of the important factors to guide you towards a better decision.
Location
Iceland’s geography is diverse, and the location of your accommodation can greatly impact your travel experience.
• Proximity to Attractions:
- Staying near Reykjavik gives easy access to cultural sites and day tours.
- Accommodations along the Golden Circle offer proximity to major attractions like Gullfoss and Thingvellir National Park.
- For nature enthusiasts, staying in rural areas like the South Coast or Westfjords ensures breathtaking views and tranquility.
• Off-the-Beaten-Path:
- opt for remote locations if you value privacy or want to avoid crowded tourist spots. For instance, a cabin in the East Fjords provides serenity and untouched landscapes.
Case Study: A couple looking to explore the Northern Lights might choose accommodations in the countryside to avoid light pollution, enhancing their chances of a spectacular view.
Budget
Iceland is known for its relatively high costs, so budgeting wisely is essential.
• Cost Breakdown:
- Hotels and luxury stays: Average $150–$500 per night.
- Guesthouses and hostels: Around $70–$150 per night.
- Camping: As low as $20 per night at designated sites.
• Tips to Save:
- Book accommodations with kitchen facilities to save on dining costs.
- Travel during the shoulder season (April-May or September-October) for better rates.
- Consider group travel to split the costs of larger accommodations like cottages or campervans.
Travel Style and Group Size
Your choice of accommodation should align with your travel style and the number of people in your group.
- Solo Travelers: Hostels or guesthouses are great for meeting people and saving money.
- Couples: Opt for cozy cabins or boutique hotels for a romantic experience.
- Families: Farm stays or guesthouses with larger rooms and kid-friendly amenities.
- Large Groups: Renting an entire cottage or staying in a large guesthouse is cost-effective and accommodating.
Pro Tip: Confirm the maximum capacity and available beds before booking, especially for groups.
Amenities and Facilities
Amenities can make or break your experience, especially in a country like Iceland, where weather conditions and accessibility can be unpredictable.
• Must-Have Amenities:
- Wi-Fi: Most accommodations in Iceland offer free Wi-Fi, but always confirm in advance, especially in remote areas.
- Hot Tubs and Saunas: These are common and a perfect way to unwind after a day of exploration.
- Kitchen Facilities: Helps with meal prep, saving both money and time.
- Accessibility: Look for accommodations with wheelchair access if needed.
• Unique Features:
- Some boutique stays offer geothermal pools or panoramic windows for stargazing.

Pros and Cons of Different Accommodation Types in Iceland
That is why this article reveals the main benefits and drawbacks of the very point Iceland’s accommodation options in order to bring the guests the opportunity to make the balanced decision on where to stay. Here, we give you a breakdown of the advantages and the disadvantages to help you in your decision process.
Hotels
Hotels are a classic choice, offering a range of amenities and comfort levels.
• Pros:
- Convenient locations in urban centers and near tourist hubs.
- Full-service amenities like restaurants, room service, and concierge.
- Tour pickup and drop-off are often included.
• Cons:
- Higher cost compared to other options.
- Limited cultural immersion.
- May lack kitchen facilities, increasing dining expenses.
Best For: Travelers who prioritize convenience and are less budget-conscious.
Guesthouses and Bed & Breakfasts
Guesthouses provide a homely atmosphere and are often more affordable.
• Pros:
- Personal touch and local insight from hosts.
- Often include breakfast, saving you one meal expense.
- Typically more affordable than hotels.
• Cons:
- Limited privacy compared to hotels.
- Fewer amenities, such as private bathrooms or 24-hour reception.
Best For: Budget travelers and those seeking a local experience.
Hostels
Perfect for social travelers, hostels combine affordability with a communal vibe.
• Pros:
- Cost-effective, especially for solo travelers.
- Opportunities to meet other travelers.
- Central locations in Reykjavik and other towns.
• Cons:
- Shared bathrooms and dormitories may not suit everyone.
- Limited quiet spaces for work or relaxation.
Best For: Backpackers, solo travelers, and those on a tight budget.
Cabins and Cottages
Cabins offer privacy and a closer connection to nature.
• Pros:
- Secluded settings, perfect for relaxation.
- Equipped kitchens for self-catering.
- Stunning views of Icelandic landscapes.
• Cons:
- Often require a rental car for access.
- May be more expensive, especially luxury cabins.
Best For: Families, couples, or groups seeking privacy and scenic views.
Farm Stays
Farm stays offer a unique opportunity to experience rural Iceland.
• Pros:
- Interaction with local farmers and animals.
- Fresh, locally sourced food.
- Immersive cultural experience.
• Cons:
- Remote locations may require additional travel.
- Limited availability during peak seasons.
Best For: Families and those persons who want to get to know the life in Icelandic countryside as much as possible.
Camping and Campervans
Camping and campervans are excellent for adventurous and budget-conscious travelers.
• Pros:
- Maximum flexibility to explore at your pace.
- Affordable, especially for extended trips.
- Campsites often feature communal kitchens and showers.
• Cons:
- Weather dependency; Iceland’s climate can be unpredictable.
- Wild camping is not allowed, limiting where you can stay overnight.
Best For: Backpackers and other tourists that are fine with not carrying much camping gear.
Luxury and Boutique Hotels
Luxury stays in Iceland provide exclusivity and top-tier services.
• Pros:
- Unique designs and premium amenities.
- Often located in prime areas for views and privacy.
- Personalized services, including spa treatments and private tours.
• Cons:
- Expensive, making it less accessible for budget travelers.
- Limited availability; book well in advance.
Best For: First time visitors, tourists, celebrants or individuals who simply want to go fancy.
Table: Summary of Pros and Cons
Accommodation Type | Pros | Cons | Best For |
Hotels | Full-service, central locations | Expensive, limited kitchens | Luxury, convenience seekers |
Guesthouses/B&Bs | Affordable, local insight | Less privacy, basic amenities | Budget and cultural travelers |
Hostels | Cost-effective, social | Shared spaces, less quiet | Solo travelers, backpackers |
Cabins/Cottages | Private, scenic views | Remote, higher cost | Families, couples, groups |
Farm Stays | Rural charm, fresh food | Remote, limited availability | Families, nature lovers |
Camping/Campervans | Flexible, affordable | Weather-dependent, restrictions | Adventurers, budget travelers |
Luxury/Boutique Hotels | Exclusive, premium amenities | Expensive, limited availability | Honeymooners, splurgers |
Key Takeaway
No matter which type of accommodation you choose, it’s important to consider how it fits into your overall travel goals and itinerary. Combining different types (e.g., hotels in cities and cottages in rural areas) can offer the best of both worlds.

Conclusion: How to Choose the Right Accommodation in Iceland
It is therefore important that you select the right place to stay in Iceland or while in Iceland. When it comes to finding a place to stay, the Iceland hotels include luxurious, and affordable, as well as cultural hotels and much more depending with the needs and wants of the customers.
Also, it is crucial to fit for your pocket, the destination and your kind of traveler that you are. For example, if you are going for the Golden Circle in Iceland which has many sights to offer, a hotel will be more suitable especially if it’s in or near Reykjavik. On the other hand, if you want to have a get away from the real world then perhaps a cabin or farm house might provide the kind of serenity that you’re looking for.
When deciding where to stay, consider factors like your budget, location preferences, and travel style. For example, if you’re planning to explore Iceland’s famous landmarks like the Golden Circle, a hotel or guesthouse in Reykjavik or nearby might be ideal. On the other hand, if you’re looking to escape into nature, a secluded cabin or farm stay may offer the peaceful environment you crave.
Remember, early booking is key, especially during peak seasons, and don’t forget to check reviews to ensure the property meets your expectations. Whatever accommodation type you choose, make sure it complements your itinerary and enhances your overall Icelandic adventure.
To sum up:
- Hotels and luxury stays offer convenience and comfort but may come at a higher cost.
- Guesthouses, hostels, and farm stays offer authentic local experiences at more affordable prices.
- Cabins, cottages, and camping provide an intimate connection with Iceland’s stunning nature, perfect for those seeking privacy and outdoor adventures.
We fully understand your necessities and choices so that you can select the suitable type of accommodation according to your Icelandic adventure.
References
- Iceland Tourism: Comprehensive overview of Icelandic accommodation options.
- Booking.com: Customer reviews and accommodation insights in Iceland.
- Lonely Planet Iceland Guide: Expert recommendations on where to stay.
- TripAdvisor: Traveler ratings and reviews on Icelandic stays.