5 Unique Places to Stay In Iceland

5 Unique Places to Stay In Iceland

Planning a road trip in Iceland and wondering about places to stay along the way? Once you leave Reykjavik, you won’t encounter familiar chains or big cities full of accommodations. Instead, you’ll find scattered cabins, guesthouses, hostels, small hotels and a few Icelandic chains like Fosshotel, Icelandair Hotels and Kea Hotels in more populated areas. You'll also encounter plenty of scenic campgrounds, perfect for campervan road trips around the island.

For our October visit to Iceland, we decided to try out a few different styles of accommodations along our route that stretched as far east as Höfn and as far west as the Snaefellsnes Peninsula, which is a little less than halfway around the Ring Road that circles the island. We wanted spots away from light pollution, where we might see the Northern Lights.

Overall, we had positive experiences with each place we chose, and we can recommend them all for being safe, clean and moderately priced, for Iceland at least. And since I know you’re curious, we averaged less than $150 a night for accommodations, meaning some were above and some below that line (disclaimer: we visited in the low season, so you might pay more in summer).

Check out these five unique places to stay in Iceland and scroll down to the bottom for tips on searching for and booking Iceland accommodations.


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5 Unique Places to Stay in Iceland

Arnanes Country Hotel in Höfn

Just off the Ring Road less than 5 miles before you hit Höfn, this boutique property boasts incredible views of the Vatnajökull glacier, and its countryside setting means dark skies ideal for Northern Lights viewing.

The cozy cabin vibes are strong here, with wood planked walls and minimalist decor, though you’ll still enjoy modern amenities like WIFI and a TV in most spaces. There are several accommodation sizes to choose from with and without private toilets, ideal for everyone from singles to small families. Bathrooms come equipped with soap, shampoo and hair dryers, and our room even had extra pillows (it’s the small things).

On top of free tea and coffee in the rooms, there’s a complimentary, basic breakfast spread in the hotel’s intimate seasonal restaurant, and additional places to eat are just a few minutes away in Höfn.  

Nearby attractions: Höfn swimming pool (4 miles), Vestrahorn/Stokksnes Peninsula (6 miles), Hoffellsjökull glacier (8 miles), Jokulsarlon Glacier Lagoon (45 miles), Vatnajokull National Park (80 miles, visitors center in Höfn, 4 miles)

Hotel Katla Hofdabrekka in Vik

This modern hotel is also on Route 1, just a couple of miles east of the black-sand beaches of Vik, with a little pond onsite and scenic surroundings of hills and the coast off in the distance.

The more than 100 rooms here come in few different sizes, including large suites for those who want to spread out. In-room amenities include desks, TVs, WIFI, tea kettles and range of shower supplies (shampoo, conditioner, soap, lotion and a hairdryer). There are a few different buildings on the property, so room styles differ, some with a woodsy cabin look and others more sleek and modern.

A free breakfast buffet is served in the hotel’s spacious restaurant and features a spread of meats, cheeses, breads and fresh waffles (plus juices and coffee). With Vik nearby, you’ll have a handful of eatery options if you don’t want to dine from hotel’s locally sourced menu, though you’ll definitely want to spend some time on the property soaking in the geothermal hot tub outside.

Nearby attractions: Reynisfjara Beach (10 miles), Dyrhólaey (15 miles), Skogafoss (25 miles), Laufskálavarða (21 miles), Eldhraun Lava Field (30 miles), Fjadrargljufur Canyon (40 miles)

Hotel Hella in Hella

Hotel Hella’s location about midway between Reykjavik and Vik on the Ytri-Ranga river makes it a convenient stopping point for South Coast adventures. A couple of popular waterfalls are nearby, and the Golden Circle isn’t too far away, either.

The style of this property is an interesting blend of old and new, some areas sleek and modern, and others designed classically with floral wallpaper, sconces and antique-looking furniture. The long, narrow hall lined with bedroom doors even reminded me a bit of the hotel from “The Shining.” You can choose from single, double and triple rooms with WIFI and private baths (soap and shampoo provided but no hair dryer, at least in our room), or book twin rooms with shared baths for a lower-budget option.

The hotel’s dining room serves an included breakfast in the morning, a buffet of delicious pastries, fresh bread, creamy spreads (like pepper and salmon), cereal and the typical Icelandic selection of meats and cheeses. There’s also a coffee and tea station you can help yourself to throughout the day. The gas station right next door has a dining area and a Quiznos (of all places) plus a selection of quick-fix meals and sandwiches, and there’s a supermarket steps away to stock up on picnic supplies.

Nearby attractions: Kerid crater and the Golden Circle (30 miles), Seljalandsfoss (21 miles), Skogafoss (38 miles), Haifoss (55 miles), Landmannalaugar (62 miles)

Lake Thingvellir Cottages in Thingvallavatn

Sitting on the centerpiece lake of Thingvellir National Park (or Þingvellir in Icelandic), the cabins here have jealousy-inducing views of the water and surrounding mountains, with little decks on each to sit and soak up the scenery (and a wall of windows inside). Plus, with no towns around to provide night pollution, there’s great potential to spot the Northern Lights when they’re active.

Four fully equipped cottages with a tiny-house feel are available with a choice of one or two bedrooms, perfect for families and small groups. Towels and linens are provided, and there are cozy places to lounge and dine in the open and airy living space. Special touches like cutesy matchy decor and dishes and a guestbook to sign really put this place over the edge.

Plus, each cabin has a mini kitchen stocked with just about anything you need to cook a meal in the toaster oven or on the stovetop, from pots, cutting boards and can openers to salt and olive oil (and coffee and tea, of course). If you grab some groceries in Reykjavik on the way here, you can stick them in the fridge and use the property as a home base for exploring the popular Golden Circle.

*Note: This property does not have a reception building, you have to call a phone number to check in upon arrival.

Nearby attractions: Thingvellir National Park (2 miles), Silfra fissure (5 miles), Geysir (39 miles), Gullfoss (45 miles), Glymur (32 miles), Reykjavik (22 miles)

The Old Post Office Guesthouse in Grundarfjordur

With views towards the ocean to one side and a mountain range to the other, the large bedroom windows at the Old Post Office Guest House are a welcome surprise. Kirkjufell Mountain is just a couple of miles down the road, visible from a few rooms and a small balcony where you can pop out in the middle of the night to check for the Aurora Borealis dancing in the sky over the pointy peak.

Rooms for one to three people with shared or private baths are clean and white, with amenities like desks, TVs and free WIFI. Our accommodations had cute totes stuffed with a towel to carry your things back and forth to the shower, and an in-room sink, too, which helped a little with the shared bath situation (just one on the top floor for half a dozen or so rooms). Ask for a room facing the ocean if possible, as there was a bit of street noise in the front.

Breakfast is not included here, but the shared kitchen downstairs is available to cook your own meals, and we were definitely tempted to make some new friends when we woke up to the smell of bacon. The little seaside town of Grundarfjordur also has a handful of restaurants plus a grocery store with a hot dog counter (we tried and recommend them).

Nearby attractions: Kirkjufellsfoss (1 mile), Skarðsvík Beach (25 miles), Saxholl Crater (27 miles), Djúpalónssandur Beach (36 miles), Londrangar (36 miles), Búðakirkja (23 miles), Rauðfeldsgjá Gorge (29 miles)


Tips for booking accommodations in Iceland

1. When you’re looking for accommodations in Iceland, you’ll notice that many use third-party reservation sites and may not even have their own website, so searching on places like BOOKING.COM will typically yield the best results.

2. Accommodations tend to be more expensive and book up fast in summer, and you won’t always have a lot of choices in a particular locale. So if you find something you like, nab it while you can (and pay attention to available cancellation policies in case you find something better).

3. Reception desks won’t be open 24/7 in most locations, so when you book, look for check-in instructions that tell you to arrive before a certain hour or call a number when you get there.

4. All of the accommodations above come with the basics like towels and bedding, but if you opt for a hostel, they might charge you a rental fee for linens.

5. Booking a property with a kitchen or free breakfast will help you save on one of the pricey parts of visiting Iceland — eating out. If you get creative, even just a coffee pot or electric kettle can allow you to make basic dishes like ramen noodles, mac and cheese in a cup or oatmeal.

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