Top places to stay in Iceland.
Reykjavík carries a hospitality heritage shaped by Icelandic seafaring, the growth of North Atlantic commerce, and the extraordinary geothermal landscape surrounding the capital, where Nordic traditions of welcoming travelers have evolved alongside a flourishing culture of contemporary design, thermal bathing, and wilderness tourism. The settlement traces its origins to Ingólfur Arnarson, the Norse settler traditionally associated with the establishment of a farm at Reykjavík 874. For centuries, the surrounding coastline supported fishing, agriculture, and maritime exchange, with travelers accommodated primarily in private homes and farmsteads. The establishment of the Innréttingar manufacturing enterprise in 1752 encouraged permanent commercial development, introducing workshops and employment that strengthened the small settlement. Reykjavík received its municipal charter in 1786, becoming an important trading center as Danish commercial restrictions gradually eased. The restoration of the Alþingi as a consultative assembly in 1845 brought political representatives and visitors into the town, increasing demand for organized lodging. During the nineteenth century, expanding fisheries and coastal shipping supported guesthouses and modest hotels near the harbor. The opening of Hótel Ísland in 1882 introduced a prominent establishment serving travelers and the emerging political and commercial community. Icelandic home rule in 1904 strengthened Reykjavík's administrative importance, encouraging further investment in civic buildings and visitor services. The opening of Hótel Borg in 1930 marked a decisive development in the capital's hospitality culture. Commissioned by Jóhannes Jósefsson, the hotel introduced an elegant Art Deco landmark overlooking Austurvöllur, with refined interiors suited to international visitors and Iceland's growing professional society. The Second World War transformed Reykjavík's economy through British and American military occupation, bringing substantial infrastructure investment and increased contact with international travelers. Iceland became an independent republic in 1944, establishing Reykjavík as the capital of a sovereign nation. The development of transatlantic aviation subsequently strengthened the country's accessibility, with Icelandair's international services encouraging stopovers between Europe and North America. The opening of Hótel Saga in 1962 introduced a major modern establishment associated with the expansion of tourism and professional conferences. Iceland's growing international reputation for geothermal recreation, volcanic landscapes, and distinctive cultural traditions encouraged further hotel investment during the late twentieth century. The opening of Harpa Concert Hall and Conference Centre in 2011 strengthened the capital's position as a destination for international events. Subsequent development transformed former commercial buildings, waterfront properties, and established residential structures into boutique hotels. Reykjavík's contemporary hospitality industry reflects the evolution of a modest fishing settlement into a cosmopolitan northern capital whose visitor economy draws upon Iceland's extraordinary natural environment and independent cultural identity.
Reykjavík's most compelling places to stay occupy a compact coastal city where colorful residential streets descend toward a working harbor and distant volcanic mountains frame the horizon. The historic center extends around Austurvöllur and the streets surrounding the Alþingi, preserving an intimate architectural environment of traditional timber buildings, substantial stone structures, and carefully restored commercial properties. Boutique hotels occupy prominent positions near the city's principal civic institutions, offering access to established restaurants, galleries, and pedestrian shopping streets. Eastward, the Laugavegur corridor forms Reykjavík's principal commercial and hospitality district, with intimate hotels and contemporary properties distributed among boutiques, cafés, and historic residential buildings. The street's changing architectural character reflects successive periods of urban development, from corrugated-metal houses to substantial modern commercial structures. The adjoining Skólavörðustígur rises toward Hallgrímskirkja, whose expansive concrete architecture dominates the surrounding skyline. Accommodation along these central streets provides access to the capital's cultural institutions and its most concentrated dining and nightlife districts. Southward, the neighborhoods surrounding Tjörnin lake introduce a quieter residential landscape through colorful houses, landscaped gardens, and substantial civic buildings. Traditional guesthouses and boutique properties occupy established streets near the lake, with walking routes connecting the area to the historic center. Westward, the Old Harbour preserves Reykjavík's maritime character through former fishing facilities, warehouses, and contemporary waterfront development. Hotels near the harbor overlook working vessels and excursion boats, with views across Faxaflói toward Mount Esja. The surrounding streets contain restored commercial buildings, independent restaurants, and cultural attractions associated with Iceland's seafaring heritage. North of the central district, the waterfront promenade extends toward the Sun Voyager sculpture and the substantial cultural buildings overlooking the bay. Contemporary hotels occupy prominent coastal positions, emphasizing panoramic views and the dramatic seasonal changes in northern light. Farther east, the Hlemmur area introduces a more residential metropolitan setting through substantial apartment buildings, established commercial streets, and contemporary hospitality properties. The district's position near the eastern end of Laugavegur offers convenient access to the central shopping corridor and the surrounding neighborhoods. Beyond the historic core, Laugardalur presents a greener environment through extensive recreational grounds, botanical gardens, and major sporting facilities. Hotels here occupy quieter settings near the city's principal geothermal swimming complex and substantial public parkland. Southward, the streets surrounding Öskjuhlíð introduce a wooded hillside landscape dominated by Perlan, whose distinctive glass dome provides panoramic views across the capital and surrounding coastline. Accommodation in the adjoining residential districts offers access to walking trails and quieter urban surroundings. Farther southwest, the Seltjarnarnes peninsula extends toward the Atlantic through established residential streets and exposed coastal paths, with dramatic views across the water toward the surrounding mountains. These settings reveal a city whose hotel districts remain closely connected to the shoreline, the intimate scale of its historic neighborhoods, and the volcanic landscape beyond. Foresyte may earn a commission when you book.
Foresyte Travel's top five choices.
5. Sand Hotel
Sand Hotel occupies a collection of buildings along Laugavegur, the commercial street that developed into Reykjavík's principal downtown axis during the city's twentieth-century expansion. The property incorporates the former Sandholt bakery premises, connecting the hotel to a family baking business whose Reykjavík history reaches back to 1920. Sandholt continues beside the hotel, preserving an unusual continuity between contemporary hospitality and one of the street's enduring commercial institutions. Icelandic artwork, Nordic materials, and residential-scale interiors connect the property closely with the surrounding center. Sand Hotel derives its character from this integration with Laugavegur and the commercial history embedded in its buildings.
4. Canopy Reykjavik City Centre
Canopy Reykjavik City Centre became the first property in Hilton's Canopy brand when it opened in 2016, making Reykjavík the launch point for a concept subsequently expanded internationally. The hotel occupies six interconnected buildings near Laugavegur, incorporating structures whose differing periods and forms preserve the irregular grain of the surrounding downtown blocks. Icelandic textiles, artwork, materials, and furnishings embed the international brand within Reykjavík's visual culture. The project established Hilton's lifestyle-hotel concept through direct integration with an existing urban district. Reykjavík served as the prototype for a Hilton brand built around the character of individual neighborhoods.
3. Tower Suites Reykjavík
Tower Suites Reykjavík occupies the uppermost floor of Höfðatorg Tower, a contemporary glass high-rise overlooking Reykjavík's city center, Faxaflói Bay, and the surrounding mountains. Located within the Höfðatorg development near Borgartún, the property forms part of a modern business district whose office towers and commercial buildings reflect the Icelandic capital's twenty-first-century urban expansion. The boutique hotel opened in 2016, introducing an intimate collection of luxury suites elevated above the city's predominantly low-rise architectural landscape. Floor-to-ceiling windows, minimalist Scandinavian interiors, and panoramic views of Mount Esja and the Atlantic coastline establish a distinctive hospitality setting shaped by Reykjavík's dramatic natural geography. Its position above the capital connects contemporary Icelandic design with the city's growing international luxury hospitality market, offering an elevated perspective on one of northern Europe's most geographically distinctive urban destinations.
2. Hotel Borg
Hotel Borg occupies a commanding position on Austurvöllur beside Alþingi and Reykjavík Cathedral, placing it within Iceland's historic civic center. Jóhannes Jósefsson, an Icelandic wrestler and circus performer who competed at the 1908 London Olympics, founded the hotel after building an international career beyond Iceland. Architect Guðjón Samúelsson designed the building in the Art Deco style, and Hotel Borg opened in 1930 as Reykjavík entered a period of accelerating urban modernization. Its geometric interiors, polished stone, decorative metalwork, and restrained ornament connected the capital with the cosmopolitan hotel culture emerging across Europe between the world wars. Hotel Borg endures as a physical expression of Reykjavík's transformation from a compact North Atlantic town into a modern national capital.
1. The Reykjavik EDITION
The Reykjavik EDITION occupies the Old Harbour waterfront beside Harpa, anchoring a district reshaped by major cultural and architectural investment along Reykjavík's shoreline. Ian Schrager and Marriott International developed the property through the EDITION partnership, extending Schrager's decades-long influence on modern hotel design into Iceland. Architecture by T.arch and interiors involving Roman and Williams combine dark basalt references, timber, concrete, and expansive glazing with the austere material character of Iceland's volcanic landscape. The hotel opened in 2021 as the Old Harbour continued its transition from working maritime infrastructure toward a mixed cultural, hospitality, and public waterfront district. The Reykjavik EDITION captures that transformation through architecture directly connected to the harbor, Harpa, and the city's contemporary waterfront.
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