Where to stay in Reykjavik: best areas and neighborhoods

Reykjavik, the capital of Iceland, is the gateway to this wonderful country, where nature reigns supreme! It is also the first stop on a journey to the land of fire and ice, a destination to which two or three days are usually dedicated.

The city is divided into 10 districts. The best areas to stay are the central ones: District 1 (i.e. Vesturbær), District 2 (i.e. Midborg), District 3 (i.e. Hlidar) and District 4 (i.e. Laugardalur).

Here are all our tips on where to stay in Reykjavik!

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In a hurry? Here's our recommended accommodation

Useful tips: the best neighborhoods to stay

Not recommended areas: there are no areas to avoid, Reykjavik is an absolutely safe city, even at night. From a tourist point of view, staying one or two nights, we could advise against the neighborhoods of Háaleiti, Kringla, Fossvogur and Gerði, only because they are further from the historic center.

If this is your first time visiting the city or you are staying for a short time, generally one or two nights, then the best district to stay is Midborg. This is the central district, also known as Downtown, where the main attractions are located! Full of clubs and the heart of nightlife, it is therefore perfect for young people and those who want to enjoy some fun. In this regard, the Vesturbær district is also ideal for younger people, given the presence of many clubs, cafes and kiosks.

If you are traveling as a family, we recommend Laugardalur. This is a quiet and residential district, a little further from the center but well connected by public transport.

Finally, if you are traveling low cost, the best choice is Hlidar, a district full of hostels and budget-friendly accommodation.

Best accommodation: we have selected the best hotels, b&bs and hostels in Reykjavik. Discover our advice and book on Booking

If you are in Reykjavik for work or as a day stopover to other destinations, consider sleeping near the airport. You can find the best solutions and selected hotels on booking.com

Midborg, best for first-timers

Foto di Michal Gorski.

• Pros: Lively atmosphere day and night, close to top sights
• Cons: Pricey, touristy
• Main attractions: Hallgrímskirkja Church, Harpa Concert Hall, Sun Voyager, National Museum of Iceland, Icelandic Phallological Museum
• Average prices: from €90,00 per night - find top stays on Booking

Recommended accommodation

Midborg, also known as Downtown, is the heart of Reykjavik. It is certainly the best area to stay if you are visiting the city for the first time or if you are staying for only one night. In fact, here you will find some of the city's iconic monuments: the iconic Hallgrímskirkja Church, the Harpa Concert Hall and the Sun Voyager (or Sólfar, the city's most famous structure). Among the museums, on the other hand, there are the National Museum of Iceland and the unique Icelandic Phallological Museum.

Midborg is also known for its lively nightlife: in reality it is a lively area at any time of day, thanks to the many clubs, therefore especially suitable for young people and couples! Especially the streets of Laugavegur, Bankastræti and Austurstræti are the most lively in the evening. It is also one of the most expensive areas, where accommodation is easily sold out, so we advise you to book as soon as possible!

Finally, staying here you can easily get around on foot! The main attractions are all close to each other, as are the numerous shops and clubs.

Average prices in the neighbourhood start from €90,00 per night - compare the best accommodation on booking

Vesturbær, the traditional district

Foto di Kasuarer.

• Pros: Trendy and traditional atmosphere, close to the Old Harbour
• Cons: Can be lively at night
• Main attractions: Old Harbour, FlyOver Iceland, Reykjavík Maritime Museum, Whales of Iceland museum
• Average prices: from €90,00 per night - find top stays on Booking

Recommended accommodation

To the west of Midborg, is the Vesturbær district, which is the traditional and trendy area of Reykjavik. This part of the capital is characterized by colorful buildings, a traditional atmosphere and the Old Harbour area. Here, you can find attractions such as FlyOver Iceland, the Reykjavík Maritime Museum and the museum dedicated to whales, Whales of Iceland. Whale watching tours also depart from here!

The area is characterized by a large presence of breweries, lively bars, trendy cafes, restaurants with international cuisine and kiosks selling fish and chips. Given these characteristics, this is an area recommended especially for young people, but also for couples and those looking for a lively district close to the center.

Finally, staying here you can easily get around on foot. Midborg and the main attractions can be reached with a pleasant walk along the seafront. The area is however served by bus lines 11 (which leads to Seltjarnarnes), 13, 14 and 15.

Average prices in the neighbourhood start from €90,00 per night - compare the best accommodation on booking

Hlidar, best to stay on a budget

Foto di Zairon.

• Pros: Budget-friendly options, residential area close to attractions
• Cons: Less nightlife than central districts
• Main attractions: Reykjavik Art Museum, Perlan (nearby)
• Average prices: from €70,00 per night - find top stays on Booking

Recommended accommodation

Hlidar is the district located east of Midborg. It is a residential area within walking distance of the main attractions. Here, you will also find the Reykjavik Art Museum and not far away, in the southern part, you can reach the Perlan, from whose terrace you can admire the entire city from above!

Reykjavik, like all of Iceland, is a truly expensive destination, where it is difficult to save money. In Hlidar, however, it is possible to find excellent deals and is therefore ideal for those who want to save at least a minimum. Here in fact there are numerous hostels and budget-friendly hotels, without however giving up the location.

Staying here will allow you to get around on foot: Hallgrímskirkja is not far away and the northern part of the district is bounded by a stretch of Laugavegur, the city's famous street! The district is however crossed by several bus lines!

Average prices in the neighbourhood start from €70,00 per night - compare the best accommodation on booking

Laugardalur, the green district

Foto di Börkur Sigurbjörnsson.

• Pros: Green and quiet area, ideal for families, outdoor thermal baths
• Cons: Further from the city center, less nightlife
• Main attractions: Laugardalslaug thermal baths, Hofdi House, City Zoo
• Average prices: from €90,00 per night - find top stays on Booking

Recommended accommodation

Finally, among the best places to stay in Reykjavik is definitely Laugardalur, a wonderful residential district surrounded by greenery. Its name means "valley of hot springs" and here, in fact, one of the main attractions are the Laugardalslaug outdoor thermal baths, accessible all year round! Here you will also find the Hofdi House, one of the oldest houses in the capital, and the city zoo.

With its tree-lined avenues, large parks and waterfront promenades, this area is suitable for those seeking tranquility and for families. Especially for the latter: it is in fact the best neighborhood in the city to stay with children! You will be a short distance from the center but it will feel like you are in the middle of nature.

Finally, staying here you can get around both on foot and by public transport. It depends a lot on where you are staying: we recommend the area where the Hofdi House is located, which is the part closest to the center. From here, walking along the seafront, you can reach Hallgrímskirkja in 20 minutes on foot.

Average prices in the neighbourhood start from €90,00 per night - compare the best accommodation on booking

Places to stay near Reykjavik

Having a few days available, the best solution is definitely to stay in Reykjavik. As we have seen, the districts offer numerous options, suitable for all travelers.

Iceland is however a destination that should be visited by car and, if you are organizing a trip, you will certainly not only stop in the capital. For this reason, depending on the itinerary you are organizing, it may be more convenient, both from a cost and location point of view, to consider locations to stay located near the capital, which will then allow you to continue your journey to other destinations!

• Seltjarnarnes (4,5 km / 10 min): very small town located on the tip of the Reykjavik peninsula. It offers splendid views of the North Ocean and is surrounded by nature. Connected by bus line 11 (15 min) - compare accommodation on booking
• Mosfellsbær (17 km / 20 min): town located halfway between Reykjavik and Thingvellir National Park, one of the main attractions of the Golden Circle, an excellent base for discovering this side of Iceland. Connected by bus line 15 (1 h) - compare accommodation on booking
• Keflavik (45 km / 45 min): town where the main airport of Iceland is located. Excellent base for reaching both Reykjavik and attractions such as the Blue Lagoon and for exploring the Reykjanes Peninsula. From the airport Flybus Iceland (45 min) - compare accommodation on booking
• Selfoss (60 km / 55 min): one of the main towns in Southern Iceland. Excellent base for exploring both Reykjavik and the Reykjanes Peninsula and locations such as Vik and the waterfalls of Southern Iceland. Connected by bus line 4 + line 51 (1 h 30 min) - compare accommodation on booking

Reykjavik accommodation price map

Booking.com

Cool Things to do in Reykjavik

• Whales Watching: one of the most thrilling experiences you can do in Iceland is a whale watching trip in Faxaflói. More info here.
• Relax at Blue Lagoon: relax with the warmth of Icelandic spas. More info here.
• Visit Perlan and enjoy 360° views of Reykjavik from its observation deck. More info here
• Explore the iconic Hallgrímskirkja Church and enjoy panoramic city views from its tower.
• Visit the Harpa Concert Hall, a stunning architectural masterpiece on the waterfront.
• Stroll along the Old Harbour, watch fishing boats and consider a whale watching tour.

Travel Tips

• Reykjavik is walkable, especially the central districts. Consider public transport or taxis for longer distances.
• Book accommodation and tours in advance, especially during peak season, as Reykjavik is a popular destination.
• Embrace the Icelandic weather: be prepared for changeable conditions and pack layers.
• Try local cuisine: sample fresh seafood, lamb dishes, and Skyr (Icelandic yogurt).
• Take advantage of happy hour: enjoy drinks at more affordable prices in Reykjavik's bars.
• Explore beyond Reykjavik: rent a car to discover Iceland's stunning natural landscapes, like the Golden Circle or the South Coast.

 Without internet when you need it the most? Don't take the risk! With Saily's eSIMs, you can connect instantly, anywhere, and stress-free! Visit the website and get a 5% discount exclusively for Wheresleep.com! Find out more