Where to Stay in Reykjavik – Neighborhoods & Area Guide

Written by Jan Meeuwesen
Updated on
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Situated along the coast of Iceland, Reykjavik is the capital and the largest city in the country. One of the smallest cities in Europe, Reykjavik is also the northernmost capital in the world and is the country’s governmental, financial, and cultural hub. According to the “Book of Settlement,” the oldest written proof of Icelandic history, the city was the first ever permanent settlement in the nation and has been in existence since 874 AD.

Named after the city’s hot springs, Reykjavik literally translates to “cove of smokes” or “the smoky bay.” One of the safest cities on the planet, the city is home to the world’s oldest parliament, Althingi. While art lovers can appreciate the many street-arts scattered around the city, Kolaportið, found next to the harbor, is the biggest flea market in Iceland and is an absolute paradise for shoppers – you can find almost anything here from shark meat to vintage records and everything else in between.

And don’t be alarmed if you see a baby sleeping in a stroller unwatched outside a supermarket or a store – Icelanders believe that letting their toddlers sleep in the fresh air (even when it’s below freezing outside) is good for their health.

Let us now explore some of the most prominent areas in the city so you can decide where to stay in Reykjavik during your stay.

Miðborg – Downtown/City Center – 101

Miðborg, ReykjavikSource: vvoe / shutterstock

The beating heart of the city, the Downtown neighborhood is home to several notable attractions in the city and a majority of its popular bars and restaurants. Whether you love exploring the brightly colored streets of the city or plan to get a taste of the true Icelandic nightlife, this is most likely where you will be spending most of your time. An easily walkable neighborhood, the downtown is home to one of the most historic landmarks of the city – the Church of Hallgrímur. Visible from almost any part of this city, this gigantic Lutheran parish church is the largest of its kind in the country and has been in existence since 1945. Another notable attraction in the area is the National Museum of Iceland. Established in 1863, the museum is dedicated to an intriguing collection of Icelandic and antiquarian objects.

Good for: All kinds of travelers.
Other Highlights: Volcano House, Listasafn Reykjavíkur Reykjavík Art Museum, and Reykjavík Museum of Photography.

Hotel Recommendations:

  • The Swan House – RÆTUR Apartment Hotel – Within a minutes’ walking distance from the famous shopping street, the property features spacious, self-catering suites with free Wi-Fi, kitchenette, and private bathroom. The trendy units also come with a flat-screen TV, extra-large double beds, and tea/coffee maker for extra comfort. Great for all kinds of travelers.
  • Skuggi Hotel Reykjavík by Keahotels – A few hundred meters from the historic Hallgrímskirkja Church, Skuggi Hotel Reykjavík offers a 24-hour front desk, free underground parking, and an on-site bar. The comfy guestrooms at the property come equipped with TV, free Wi-Fi, and private bathroom. Suitable for solo travelers, couples, and small families.
  • Canopy by Hilton Reykjavik City Centre – A couple of minutes from the prominent Laugavegur Shopping Street, Canopy by Hilton Reykjavik City Center offers well-appointed guestrooms with Icelandic décor, flat-screen TV, and a tea/coffee maker. Guests can enjoy a work out at the on-site fitness center and refresh themselves with a delightful cocktail at the bar. A superb complimentary breakfast buffet is served daily. Perfect for all kinds of luxury travelers.

104 – Laugardalur

Laugardalur Botanical GardenSource: vvoe / shutterstock
Laugardalur Botanical Garden

A largely residential neighborhood not too far from the city’s bustling downtown area, Laugardalur is a great place to stay if you are traveling with family, especially young children. Speckled with a charming vibe, the area’s many cozy cafés are a perfect spot to enjoy a nice lunch and admire the surroundings. Visit the famous Reykjavik zoo and entertainment park where you can enjoy a splash with your kids at the largest swimming pool in Iceland followed by a delightful meal in the middle of the well-manicured gardens of the park and finish the day by taking a gentle stroll amidst the botanical gardens. For something more fun-filled and exciting, spend a night camping at the Reykjavík Campsite. While here, you can’t miss a rejuvenating dip in the thermal pools at the Blue Lagoon.

Good for: All kinds of travelers.
Other Highlights:
Húsdýragarðurinn (zoo), Laugardalslaug Swimming Pool, Laugardalur valley botanical garden, and Ice skating.

Hotel Recommendations:

  • Sport Hostel Reykjavík – Located adjacent to the rejuvenating Blue Lagoon Spa, Sport Hostel Reykjavik offers comfortable accommodation in twin and family rooms. A common kitchen is available for guest use. Guests can relax at the sun terrace while they enjoy their breakfast and later catch up on their favorite movies and shows at the TV lounge. Suitable for all kinds of travelers.
  • Skipasund Apartment – A short drive from Laugardalslaug Swimming Pool, Skipasund Apartment provides expansive, fully-equipped apartment units within the picturesque Laugardalur Valley. Guests can enjoy free parking and complimentary Wi-Fi on the property. Great for couples, families, and groups.
  • GreenKey Apartments L27 – Featuring well-furnished one-bedroom apartments with free Wi-Fi, a fully-equipped kitchen, extra-large double beds, and a living room, GreenKey Apartments L27 is only a short drive from Reykjavík Domestic Airport. Rooms come here with a cozy patio where guests can enjoy their morning coffee. Suitable for couples, families, and groups.

Hlíðar – 105

Fosshótel RauðaráSource: booking.com
Fosshótel Rauðará

Close to the action of the downtown/city center neighborhood yet far enough for a peaceful night of sleep, the 105 area doesn’t have any restaurants and bars as such but is within proximity to the countless diners and nightlife avenues of the 101 neighborhood. Having said that, Hlíðar is home to one of the most prominent (and peculiar) museums in the city, the Icelandic Phallological Museum. Not meant for children, this 1997 museum houses the largest display of penises and penile parts in the world, including 55 specimens taken from whales, 118 from land mammals, and much more. There is also a human specimen that was acquired as early as July 2011.

Good for: All kinds of travelers
Other Highlights:
City Park Klambratún, and Reykjavík Art Museum.

Hotel Recommendations:

  • 105 – A Townhouse Hotel – A pleasant stroll from the Hlemmur Square, 105 – A Townhouse Hotel features wonderfully-decorated studios and apartment units which come equipped with comfy beds, satellite TV, kitchen, and private bathroom. The property’s 24-hour front desk can help in arranging car rentals and offering sightseeing suggestions within the area. Suitable for solo travelers, couples, and small families.
  • Fosshótel Rauðará – Featuring a 24-hour reception, a delightful bar and cocktail lounge, and free parking, Fosshótel Rauðará offers stylishly designed guestrooms within a 5 minutes’ walking distance from Klambratun Park. A fabulous complimentary breakfast is served daily. Great for all kinds of travelers.
  • Reykjavík Hostel Village – A family-owned, cozy property located within a short walking distance from many of the city’s famous attractions, including the main shopping street and the Sundhöllin public swimming pool, Reykjavík Hostel Village offers a variety of brightly-decorated rooms and apartment units with complimentary Wi-Fi and a wonderful view of the city or the surrounding garden. Great for all kinds of travelers.

108 – Háaleiti og Bústaðir

Hotel IslandSource: booking.com
Hotel Island

If you are more interested in a city’s landscape that it’s culture, the 108 neighborhood in Reykjavik is the perfect place for you to stay. Surrounded by amazing greenery and the pristine blue waters of the enclosing sea, Háaleiti og Bústaðir district comprises four neighborhoods, namely Háaleiti, Kringla, Fossvogur, and Gerði. Fossvogur Valley, the most prominent outdoor attraction in the area, is a popular recreational area which is frequented by locals and tourists alike. Visitors especially like exploring the many trails that are scattered around the vicinity. Once you have had your dose of the Icelandic nature, make your way to one of the finest shopping malls in the city, Kringlan Shopping Mall.

Good for: All kinds of travelers.
Other Highlights:
City Park Klambratún, and Laugardalslaug Swimming Pool.

Hotel Recommendations:

  • Reykjavik Lights Hotel by Keahotels – Located within a kilometer from Laugardalur Family Park, this well-designed hotel offers luxurious accommodation in elegantly-appointed guestrooms which are individually decorated with brilliant artworks and inspired by the ancient Icelandic calendar. A delightful breakfast buffet is served daily. Great for all kinds of travelers.
  • Arctic Comfort Hotel – A short walking distance from the largest swimming pool in Iceland, the Arctic Comfort Hotel offers expansive guestrooms with a flat-screen TV, kitchenette, and a private bathroom. Guests can start their day with a hearty breakfast and relax with a cocktail during the day at the hotel’s bar and lounge. Alternatively, the helpful staff at the reception can suggest local restaurants and assist in making reservations. Great for all kinds of travelers.
  • Hotel Island – Boasting a full-service spa and wellness center, a beauty salon, a well-equipped fitness center, and an on-site bar and restaurant, Hotel Island treats its guests to a lavish room with panoramic views of the surrounding mountains. Many of the city’s famous attractions can be found within a short walking or driving distance. Perfect for all kinds of travelers.

170 – Seltjarnarnes

SeltjarnarnesSource: Henry Oude Egberink / shutterstock

Technically not a part of Reykjavik proper, Seltjarnarnes, also known as the 170 neighborhoods, is a small town on the tip of a spellbinding peninsula which is best known for its location by the North Atlantic Ocean. Offering beautiful coastal walking trails and a brilliant display of outdoor artworks by local artists, the neighborhood is considered as one of the best spots for experiencing the phenomenal wonders of the Northern Lights (winters) and the Midnight Sun (summers). A haven for birdwatchers, Seltjarnarnes reportedly comprises over 110 varieties of birds. In fact, the activity is so popular in the area that there is a now a shelter in place for photographers to wait while they anticipate the best bird photo opportunities.

Good for: All kinds of travelers.
Other Highlights:
Grótta Island Lighthouse, Golfklúbbur – Seltjarnarnes, and Nesstofa Museum.

Hotel Recommendations:

  • Blue House B&B – A 5 minutes’ walking distance from the beach, Blue House B&B features well-appointed guestrooms and self-catering apartment units within the tranquil atmosphere of the neighborhood. Furthermore, all rooms at the property come equipped with an Apple TV and Netflix. Guests can enjoy a view of the sea or the surrounding gardens. Great for all kinds of travelers, including big groups of up to 6 members.
  • Apartment by the Sea near Reykjavik Center – As the name suggests, this charming property is located by the beach and it offers meticulously-decorated, self-catering apartment units with a kitchen and satellite TV. Complimentary Wi-Fi is available throughout the property. Outdoor lovers can enjoy hiking and cycling around the neighborhood. Suitable for couple and families.
  • Nes Residence – Offering unparalleled views of the enclosing sea, Nes Residence features fully-furnished apartment units which come fitted with latest amenities such as free Wi-Fi, flat-screen TV with streaming service, a fully-equipped kitchen, and a private bathroom. National Museum of Iceland is a 10 minutes’ drive from the property. Great for solo travelers, couples, and small families.



Where to Stay in Reykjavik – Neighborhoods & Area Guide:

  • Miðborg – Downtown/City Center – 101
  • 104 – Laugardalur
  • Hlíðar – 105
  • 108 – Háaleiti og Bústaðir
  • 170 – Seltjarnarnes