Where to stay in Iceland on the Ring Road (includes Northern Lights viewing)

You have your flight booked and now to find where to stay in Iceland. This amazing country has so much to see at every turn and anyway you experience it will be memorable. We break it down by region and recommend places to stay along the ring road. Our picks cover all budget levels and include unique stay ideas. We travel with our family of five so always look for larger accommodations but there will also be options for couples and solo travelers. Lastly, we include some glamping as well as the best places to stay to see the northern lights. 

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How to plan a trip to Iceland

Iceland can be a tricky trip to plan as there are so many factors to consider. There are seven different regions and depending on how much time you have for a visit will dictate where you want to focus your time. We’ll provide places to stay organized by region throughout the ring road. Many first-timers who have a week or less typically will stick to the southwest coast. So either seeing Reykjavik and the Golden Circle or Reykjavik, Vik and Snæfellsnes Peninsula. In most cases, you’ll want to plan to start and end in Reykjavik or the Reykjanes Peninsula.

For those with longer than a week and who want to do the ring road, it’s a great adventure. The ring road is fully paved but if going October-April you’ll want to be aware of weather and road conditions and consider a 4×4 vehicle as weather conditions change frequently.

Iceland is all about what you can see while driving so the journey will take far longer than GPS distances say because there are so many planned and unplanned stops along the way. Factoring in flexibility is helpful and don’t be afraid only to stay one night in a location as you can cover a lot of ground in a day.

How to book stays for a trip to Iceland

Planning a trip to Iceland takes shifting and moving things around so having flexibility when booking a stay is essential. Because there are limited accommodation options available in Iceland, and you don’t want to lose a good one, it’s best to reserve accommodations as soon as possible. But doing so might mean you need to move things around when trip planning so booking refundable stays is the best option.

The other consideration is having a kitchen to prepare meals and save on eating out or finding hotels with breakfast included. If the location you’re booking is more remote and food options will be limited it’s helpful to have a plan in advance for meals.

Booking.com is great for planning a trip to Iceland because there are no booking fees and they offer a refundable booking option. They have both traditional hotels as well as vacation home/apartment rentals. We lost quite a few places we intended to book while we were planning and had to rework our itinerary in the other direction as accommodations became so limited. Also, vacation home rentals are a great option for larger families or those looking for more space. Rentals through VRBO or AirB&B typically have generous cancelation policies in Iceland, but it’s best to check the agreement before booking.

Where to stay in Reykjavik

The capital city of Iceland has so much to offer as either a home base for a full trip or a starting and ending location. Many tours are offered from Reykjavik if you prefer not to rent a vehicle (although we recommend it) the city has so much to see on its own but when you get outside the city the true Iceland really shines. When in Reykjavik’s city center don’t miss the Harpa Concert Hall, Hallgrimskirkja, and of course having a hotdog. There are reasonably priced accommodations within Reykjavik with lots of options depending on how far in advance you book.

Vintage Hotel, Reykjavik | Photo Credit: vintagehotel.is/

Unique stay options in Reykjavik 

Vintage Hotel
Eyja Guldsmeden Hotel (eco-friendly)
Exeter Hotel (eco-friendly)
Storm Hotel by Keahotels 
Find these stays on Booking.com

*To search for home/apartment rentals on booking.com you need to select the “Entire homes & apartments” check box.

Vacation Home Rentals in Reykjavik

Charming cottage in old Reykjavik center with a hot tub and terrace. 
2 bed/2 bath
Find on VRBO here

Spacious, Downtown Reykjavik With Free Parking
4 bed/2 bath
Find on VRBO here

Family Friendly Hostel in Reykjavik
One room, five bed private room in a Swan certified hostel. Perfect for small groups or families.
Find on AirB&B here

Where to stay on the Reykjanes Peninsula

The Reykjanes Peninsula is a UNESCO Global Geopark location filled with geological wonders everywhere you turn. Mt. Fagradalsfjall, the site of two volcanic eruptions since 2021, can be found here. The famous Blue Lagoon is in Grindavik as well as the Keflavík international airport on the Reykjanes Peninsula.

Unique stay options on the Reykjanes Peninsula

Converted Water Tower (Unique stay & eco-friendly)
iStay Cottages (value)
Kristinsson Apartments (Beautifully updated, 5 min from Blue Lagoon)
Harbour View Cottages in Grindavik
Find these stays on Booking.com

Vacation Home Rentals near Reykjanes Peninsula and the Volcano site

VRBO’s Reykjanes Peninsula

Visiting the 2022 Volcanic Eruption Site

The most recent eruption started in early August 2022 and ended on August 21. It is located northeast of Fagradalsfjall in Merardalir which is a little north of the 2021 eruption site. It has since stopped but to view the site check here for more details on parking, hiking, and visiting the Merardalir volcano site. Visiting the site after an eruption can still be a worthwhile stop.

Where to stay on the Golden Circle

While the Golden Circle is close enough to Reykjavik for day trips (25 miles or 47 km east) these stay options are great if you prefer to be outside the city in a unique stay option. If you’re looking for a chance to see the northern lights (September-March) in Iceland or just want to take in the remote beauty of the Golden Circle at a slower pace we have you covered.

Consider these unique stays on the Golden Circle

ION Adventure Hotel (Luxury, Northern Lights)
Ásahraun Guesthouse
Héradsskólinn Historic Guesthouse
Find them on Booking.com

Vacation home rentals on the Golden Circle

Cozy cottage, stunning views, 35 minutes Reykjavik 2 bed/1 bath. Trampoline and hot tub
Find on VRBO here

Golden Circle location, Modern Spacious Log Cabin, 3 bedrooms/1 bath
Find on VRBO here

Golden Circle – Stunning Cabin 3 bedrooms/1 bath
Great design, hot tub, and outside of light pollution to see the northern lights in season.
Find on AirB&B here

Torfhús Retreat
1 bedroom or 2 bedroom options
Historic, reclaimed wood turf homes provide an authentic yet luxurious stay with an onsite restaurant, basalt stone hot pool, and a perfect viewing location for the northern lights when in season. This stay creates an immersive experience you won’t soon forget.
Find more info here

Torfhús Retreat | Photo credit: torfhus.is

Iceland Lakeview Retreat
This stunning luxury home with a turf roof, and large glass windows to view the lake and the northern lights. Located near Thingvellir National Park on the Golden Circle. This is a coveted, unique stay and if you find it available you should take it. 1 bedroom, 1 bath
Find more info here

Where to stay in South Iceland

Southwest and south Iceland are home to two-thirds of the overall population of Iceland. This is the area that is most visited by tourists. Iceland’s south coast is one not to miss with amazing waterfalls, black beaches, the Jökulsárlón glacier lagoon, and the beautiful Vatnajökull National Park.

Unique stays on the Southern Coast of Iceland (Hella, Hveragerdi)

Frost and Fire Hotel in Hveragerdi (geothermal springs on site)
The Greenhouse Hotel (Foodhall and greenhouse onsite, modern rooms)
Heima Holiday Homes
Hotel Rangá
Find these stays on Booking.com 

More unique stays near Vik or South Iceland

Farmhouse Lodge (we had a great stay here)
Black Beach Suites
Hotel Katla
The Barn (Modern Hostel)
Find these stays on Booking.com

Farmhouse Lodge near Vik

Vacation Home Rentals in South Iceland

Stay in a Bubble in the South or Golden Circle 
This is truly a unique stay where you are one with nature in a clear bubble. These stays are only available in the summer months unless you’re also taking a tour then a one-night stay is possible from September 1st to April 30th. Perfect for northern lights spotting! Check out the guided tours and possible Tesla rental options as well. 
Find more info here

Bubble Stay Iceland
Bubble Stay | Photo credit: buubble.com

Barn House by the shore in South Iceland – with hot tub
Beautiful design and accommodations very close to all attractions in south Iceland. 3 bedroom/1 bath.
Find more info here

Magical Stay next to Seljalandsfoss Waterfall
The nordic design and perfect location to two main waterfall sites as well as so much more in the surrounding area make this a perfect stay. 2 bedroom/1 bath
Find more info here

Glass Cottages
These cottages are made entirely of glass and are located close to the town of Hella. Each cottage has a hot tub and amazing views of nature, the stars, and northern lights when in season.
Find more info here

Unique adventure stay (unfortunately not taking guests at this time)
The island of Traustholtshólmi is an island within an island and for those truly seeking peace and quiet away from it all. The island has four elegantly furnished yurts and wild salmon is caught during the summer, cooked over the fire, and served for meals. When you arrive the owner and single inhabitant of the island, Hakon, welcomes you with his dog. Island off the southwest coast and takes a 3-4 min boat ride to get there.
Find more info here

South Eyjafaljokull Modern House 
Beautiful home tucked far enough away to see the northern lights if going in the fall/winter months. Close to all the south coast attractions in Iceland.
Find more info here

Guesthouses near Reynisfjara beach
Located right below the Mýrdalsjökull Glacier at the southernmost tip of Iceland near the town of Vik. They are close to the famous Reynisfjara black sand beach.
Find more info here

Where to stay in East Iceland

The Eastern part of Iceland is characterized by small fishing villages, a rugged coastline, and fjords. Many parts of this region are not frequently visited by tourists and can provide fewer crowds and a more authentic experience. There are more limited accommodation options and they book up fast. The main towns to find accommodations in the Eastern area of Iceland are Hof, Höfn, and Egilsstaðir.

Consider these stays in Eastern Iceland

Hotel Skaftafell (see more details below)
Adventure Hotel of Hof
Fosshotel Glacier Lagoon -if you like the idea of staying in the same brand hotel you can find 15 locations throughout Iceland.
Milk Factory (family room)
Hotel Höfn 
Vikingcafe
Lilja Guesthouse
Seydisfjördur Guesthouse (family room, communal kitchen)

Find these stays on Booking.com

Hotel Skaftafell 
7 miles from Hof. Simple, comfortable accommodations with an onsite restaurant and breakfast. The real benefit to staying at this hotel is what’s in its backyard. You can step out the backdoor and explore views of Vatnajökull glacier and Hvannadalshnjukur, Iceland’s highest peak. During June and July, the lupine are in full bloom in a stunning display that can be explored easily without anyone else in sight. We stayed here and enjoyed it. This location is a photographer’s dream and they also offer guided tours.

Vacation Home Rentals in East Iceland

Greystone Summerhouse
Newer construction 3 bedroom home with one bathroom in Egilsstaðir near Seyðisfjörður.
We stayed here with our family of five and it was great.
Find on Booking.com here

Find more home rentals on VRBO here.

Greystone Summerhouse

Where to stay in Northern Iceland 

Northern Iceland is home to the second largest urban area outside of Reykjavik. There is much to see right from the ring road, but if you venture a bit further to see the coastal or highland areas the north has even more to offer. The Diamond Circle can also be found in the north and is a drive in the Northeast of Iceland with many popular sights. If you’re looking for areas to stay in Northern Iceland check out Mývatn, Akureyri, and Husavik.

Unique Stays in Northern Iceland

Guesthouse Baegisa (farm stay with animals, eco-friendly)
Lava Apartments (value option, good location)
Akureyri Holiday Apartments (great for families and good location–we stayed here)
Hótel Laxá (Modern, on-site restaurant Eldey, in Mývatn)
Camp Boutique – Original North in Aðaldalur (Glamping)
Fosshotel Husavik

Find these Booking.com stays here 

Vacation Home Rentals or Farm Stays in North Iceland

Fjalladýrð Farmstay
Fjalladýrð is located on the edge of the northern highlands and is an active farm. They provide an opportunity to experience staying in a turf house similar to the ones that can be found all over Iceland. There is a cafe onsite as well as tour and rental options.
Find more info here 

Architectural Gem near Akureyri
There are three beautifully designed apartments available all with varying accommodations and great views, only 4 miles from the center of Akureyri. Hiking and whale watching can be found close by.
Find more info here

Where to Stay on the Snæfellsnes Peninsula and West Iceland

Snæfellsnes peninsula is on the western side of Iceland and is said to be a miniature Iceland where you can experience so much of what Iceland has to offer in one small area. This area is home to the youngest national park in Iceland, Snæfellsjökull National Park. From Reykjavik to the Snæfellsnes Peninsula it’s about 97-miles (156 km) and although it can be done in as little as two hours it’s best to plan extra time for stops and ideally stay over in one of these great accommodation options.

Consider these stays near the Snæfellsnes Peninsula and West Iceland

Stöð Guesthouse and apartments
The Bookstore Family Apartment
The Freezer Hostel & Culture Center
Hotel Laxarbakki apartments (great for groups and have a restaurant)
Arnarstapi Cottages and Hotel (great location, cafe close by)
Lynghagi House (see more info below)

Find these Booking.com stays here

Arnarstapi Cottages | Photo credit: arnarstapicenter.is

Vacation Rentals near Snæfellsnes Peninsula or West Iceland

Beautiful Home – Snæfellsnes Peninsula
A three-bedroom home in Hellnar on Snæfellsnes Peninsula.
Find more info here

Lynghagi House
A newly remodeled home and the number of rooms needed can be opened/closed so you pay for the space you need. Located in Vegamót in the Vesturland region convenient for exploring the Snæfellsnes Peninsula. They are very eco-friendly and offer onsite composting and recycling. We stayed here with our family of five and enjoyed it.
Find on Booking.com here

Lynghagi House

Guesthouse Hof í Vatnsdal
This dome guesthouse sits on a working farm in Northwest Iceland and is near a salmon river. It’s a two bedroom, one bathroom and sleeps six people. It has a beautiful mountain setting, with waterfalls and lots of animals to enjoy nearby.
Find on AirB&B here

Stóri-Kambur Cottages
This is a unique stay on a horse farm on the Snæfellsnes Peninsula. The cottages can fit 2-4 guests and do book up quickly.
Find more info here

Glamping in Iceland

Glamping stands for glamorous camping and is a great option if you’re not looking to bring or rent camping gear but still would like to experience staying close to nature. This camping alternative can provide a similar experience without the hassle. These glamping stays are often situated in beautiful, remote areas to create a unique experience. Most are only available in the summer months but it’s best to check directly.

Camp Boutique
Offers glamping tents in two locations throughout Iceland that provide an amazing experience you won’t soon forget. The glamping locations are only open in the summer months.

Camp Boutique in Gaulverjabær near Black Sand Beach in the South
Find more info here

Camp Boutique – Original North in Aðaldalur in Northern Iceland
Find more info here

Camp Boutique – Original North | Photo credit: Camp Boutique

Canvas Glamping Farmhouse near Vik
This glamping stay in the south offers four beds and access to a big barn where guests can prepare meals in a shared kitchen. Glamping is on the same property as the Farmhouse Lodge a great bed and breakfast. We stayed at the lodge and it’s peaceful, great breakfast, and is close to Vik.

Find more info on the Glamping here

Find more info on the Farmhouse Lodge

Volcano Huts Glamping in Þórsmörk
They offer various glamping, cabin, and cottage accommodations but they book up quickly for hikers doing the popular hikes nearby so reserve in advance. There is a restaurant onsite that is popular with hikers and provides a great base for starting or ending an adventure. This is a great place to stay if you’re considering hiking any of the Þórsmörk Nature Reserve hiking trails such as Laugavegur or Fimmvörðuháls. Please note, that getting to Þórsmörk can be quite challenging to get to and requires taking F-Roads. There are many rivers to cross on the way up road F249 into Þórsmörk. We recommend taking the highland bus that takes visitors safely across the rivers into Þórsmörk. This bus ride is an experience in itself and was a highlight of our trip.
Find more info here

Golden Circle Luxury Glamping
Luxury tent with great design and many modern amenities.
Find on Booking.com here

Car Top Tent Rental in Iceland

If you want to keep it simple a car top tent in the summer months can be the way to go. Note, that staying in designated campground sites is still required in Iceland.
Find more info here

Best places to stay in Iceland to see the Northern Lights

The northern lights can be seen in Iceland from (September-March) but there’s no guarantee. Finding places to stay away from light pollution and with great windows for viewing is a good start. This is a round-up of all the places we’ve recommended above that are great for viewing the northern lights in Iceland.

Glass Cottages | Photo credit: glasscottages.com

ION Adventure Hotel (Luxury, Northern Lights) Find more info here

Converted Water Tower Find on Booking.com here

Golden Circle – Stunning Cabin  Find on AirB&B here

Torfhús Retreat Find more info here

Iceland Lakeview Retreat Find more info here

Glass Cottages Find more info here

Bubble in the South or Golden Circle  Find more info here

South Eyjafaljokull Modern House  Find more info here

Lastly, we hope this gives you lots of ideas for where to stay in Iceland. You can see there are many unique stay options available but you must book early for the best availability. The best accommodations, including those for viewing the northern lights, book up quickly. If you check out one of these stays let us know which are your favorites. We’ve included our top places to stay in Iceland and hope you enjoy them as much as we have.

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Best Places to Stay in Iceland to see the Northern Lights
Pin it! Photo credit: Glass Cottages
The Best Places to Stay in Iceland
Pin it! Photo credit: buubble.com

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