There’s no other country that is as hot as Iceland right now.  It’s a country where a symphony of elements shine incredibly bright.  It’s a land of thunderous waterfalls, death-defying cliffs, sweeping glaciers, magical puffins, the friendliest locals to name a few. Before you set off on your adventures though, you’ll inevitably need to visit Reykjavik and that is not a bad thing.  It’s in the capital that you’ll either be able to base yourself for the week or use it as a starting point.

What you’ll find throughout Iceland however is that trip expenses rack up pretty quickly because everything is downright pricey.  To keep costs under control, the best way is to be smart about the accommodations that you pick.  Here are the top 5 hotels in Reykjavik that won’t break the bank.

Read more about Iceland

Our favourite stay in Iceland?

  • Of all the places we stayed, we really appreciated the ability to check-in early at the Hilton Iceland Nordica.  They totally weren’t obligated to allow us to check-in early in the morning after our early flight into Iceland but they did and boy was it nice to shower and freshen up before starting our first day.

Affordable Reykjavik Hotels For Under $200

Scanning through all the available hotels, apartments, and guesthouses in Reykjavik, I’ve landed on these 5 best properties to consider as you plan out your trip.  To keep the search a bit focused, what I have done is exclude shared room hostels but have included guesthouses that have shared bathrooms.

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1. Brim Hotel

This hotel is located on the eastern part of town but still incredibly convenient being only a block away from the main shopping street of Laugavegur and from there pretty much everything else you’d want to see in town.  It’s safe to say that if you stay here, everything will be walking distance which will be really helpful especially if you don’t have a car.  Rooms will look spartan but the bathrooms are clean and beds are comfy which is totally fine because you’ll be out and about for most of the day.  There’s also staff on hand 24/7 so if you need any recommendations or assistance, you’re covered.

Amenities:  Wifi is free and there is parking available for free as well

Price:  On average, rooms are under $120 USD per night for two

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2. Gestinn Guesthouse

One thing I had to learn quite quickly during my 8 day roadtrip throughout Iceland is that a lot of the accommodations have shared bathrooms because there simply aren’t that many big box hotels on the island.  The good thing is though that most of these are incredibly clean and not something you really have to worry about.

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Gestinn Guesthouse is one of those places where you get clean and well-furnished room with the incredible convenience of being located minutes away from the famous Hallgrimskirkja Church.

Amenities: You get the expected free-wifi, lounge space, and free parking

Price:  Best part about this guesthouse is that on average, rooms are under $120 USD per night for two.  If you’re lucky there are deals for $100 or less here as well

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Read next: Want to know what Icelandic souvenirs to buy before you head home?

3. Central Guesthouse Reykjavik

If super cosy, clean, and convenient is your thing, this property should be worth your consideration.  This 1920’s era guesthouse is located right outside the lake in Reykjavik where you’ll find things like The National Gallery of Iceland and Reykjavik City Hall. It is also right along the bus line from the airport which is helpful if you’re not renting a car.  As a guesthouse, bathrooms are shared but couples love it because they’re furnished with queen beds instead of the standard 2 twin beds.

Amenities:  Free wifi, tea/coffee but note that there is no free parking

Price:  From $100-$130 USD a night for two

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Planning a trip to Iceland?

Make sure to read our super guide to planning an Iceland itinerary including insider tips and things you just need to know before you go.

4. Icelandair Hotel Reykjavik Natura

Yes Icelandair has their own line of hotels and this one is an eco-friendly property next to Öskjuhlíd Hill and the regional airport in Reykjavik.  What I like about this one is that you get a full fledged hotel without the inflated prices.  This means you get a gym, tv, fridge, soundproofed rooms, and as one guest noted, a “very modern bathroom with nice L’Occitane toiletries.”  In addition, Flybus Plus coach transfers from or to Keflavik International Airport are really easy here because it is on their list of stops.

Amenities:  Room with fridge, desk, satellite TV, in-house restaurant, bar, free city bus pass, and free parking

Price:  You’ll have to catch them during a sale but I’ve seen prices as low as $157 USD

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5. Apartment K

This is one of my favourites for the reasons that it’s ridiculously close to everything being on the street that eventually turns into Laugavegur, and is super spacious and trendy.  Staying here will make you feel like you’re staying in an art gallery.  Think of these as beautifully furnished studios in the heart of Reykjavik with luxurious beds, private bathroom, and kitchenette.  With a modern kitchen you get the freedom of saving some money if you want to do your own breakfast or preparing other meals.

Amenities:  Kitchenette, refrigerator, free wifi and TV but beware that free parking is not included

Price:  Slightly pricier but I’ve seen budget studios go for around $160 USD

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Travel Resources For Your Next Trip

If you’re in the process of planning your trip and putting together your itinerary, these are genuinely the best resources that the Going Awesome Places team stands by 100%.

Credit cards: Don’t get burned by hidden fees on top of terrible exchange rates. When we travel now, we use the Wise Card. Simply load it with the currency you need before you go and use it as a regular VISA or their digital wallet card. Use their free app to track how much you have and top up when you need to.

Flights: Of all the booking search engines, Skyscanner is the most helpful and easy to use thanks to their Everywhere feature. Kayak is also another that’s we will often check as well.

Car Rental: If you’re looking to save money, these car rental coupon codes will be a true game-changer. Otherwise, DiscoverCars and RentalCars are great places to start.

Rideshare: For new Lyft users, use code WILLIAM4825 to get 50% off your first 2 rides (max $10 USD per ride). Offer valid for 14 days after you take your first ride. For new Uber users, use code psuqbjg4d7rn for the same offer except it’s valid for 30 days.

Airport Parking: You’ll need a spot to leave your car at the airport so why not book a spot at a discount. Use code AWESOME7 to get at least $5 off at Airport Parking Reservations or Park Sleep Fly packages.

eSIM: Lately, we’ve really loved using eSIMs. We’ve tested several over the years and we have access to a few special promotions.

  • AmigoSIM – Use GOINGAWESOMEPLACES to save 25% off. Code is re-useable.
  • Gigsky – Use TANG149 to get $3 USD when you sign up, then use code GOINGAWESOME to save 20% on all eSIM orders.
  • KnowRoaming – Use code GAP10 to save 10%.
  • AloSIM – Use code GOINGAWESOMEPLACES to save 15%.
  • Airalo – Use referral code WILLIA9500 to get $3 USD credit on your first purchase.
  • UbigiAWESOME10 to save 10% on your first order.

Wifi Hotspot: We’ve been a huge fan of wifi hotspot devices such as PokeFi (use code GAP24300) because their rates are are hard to beat and it works globally. Solis is another that we recommend. Pros are that you can share the wifi with your whole group but cons are that you have to invest in a device and you have to charge it every night.

Hotels: Our go-to is Booking.com because they have the best inventory of properties including hotels and B&Bs plus they have their Genius tier discounts. Expedia is also worth using especially with their One Key rewards program which is basically like cash. The exception is Asia where Agoda always has the best prices. Always do a quick check on TripAdvisor as well.

Vacation Rentals: Your first instinct will be to check Airbnb but we always recommend checking VRBO as well if you’re looking for a vacation rental (now eligible for One Key).

Tours and Activities: When planning our trips, we always check both Viator and GetYourGuide to at least see what’s out there in the destination that we’re going to. They often have different offerings and prices so check both.

Travel Insurance: Learn how to buy the best travel insurance for you. This isn’t something you want to travel without.

  • HeyMondo – Popular insurance provider for frequent travelers and comes with great coverage and special perks. By booking through our link to get a 15% discount (from June 19-29)!
  • RATESDOTCA – Search engine Canadians looking for the cheapest insurance including multi-trip annual policies.
  • SafetyWing – A perfect fit for long-term nomads.
  • Medjet – Global air medical transportation.
  • InsureMyTrip – Best for seniors, families, and those with pre-existing conditions.

If you need more help planning your trip, make sure to check out our Travel Toolbox where we highlight all of the gear, resources, and tools we use when traveling.

William Tang of Going Awesome Places
About The Author

Will Tang

Will Tang, founder of Going Awesome Places, has traveled to 51 countries. He shares his insanely detailed itineraries, travel guides, and packing lists. Will’s travels have been featured on Huffington Post, Men’s Journal, and Entrepreneur.

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The Discussion

  1. Thanks for the list.

    I’ve been to Central Guesthouse Reykjavik. It was really clean. Everything else was really good.

    I hope I visit Iceland again soon enough. I wonder how good the other 4 are. The only way is to try :D

  2. That’s about as good as a deal you’ll see in Iceland … thanks for bringing them to our attention!

    1. You’re most welcome Bill! Hopefully you’ll be able to enjoy at least one of these hotels on your trip to Iceland.