Top 5 Hotels in Reykjavik On A Budget In Iceland

Some of the links in this post are affiliate links. This means if you click on the link and purchase the item, I will receive an affiliate commission at no extra cost to you. All opinions remain my own.

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.  Hotels easily start at $300 and up but if you look hard and early enough, you can land a smart place to stay without breaking the bank.

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 I’ve excluded shared room hostels but have included guesthouses that have shared bathrooms.

[5] 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.

[4] 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.  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.

[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.

[2] 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.

[1] 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.