Destinations Iceland

The Best Budget Accommodation in Reykjavik

Reykjavik is slowly becoming one of the most popular city break destinations in Europe. Mainly due to the fact it is the capital of Iceland – one of the most beautiful and unique countries in the world. Reykjavik is the perfect base for any Icelandic adventure. However, it is a very expensive city.

Budget accommodation can be hard to find. Hostels, B&B’s and guesthouses are typically a much cheaper option and a great way of experiencing real Icelandic culture and people. However, if you are looking for larger hotel based accommodation, there are a few cheap options too.

So for anyone struggling to find a cheaper place to stay, here is a list of some of the best budget accommodation in Reykjavik!

Hotel Leifur Eiriksson

If you are looking for a budget hotel with a perfect location – this is the hotel for you. It is situated right in the heart of Reykjavik. Opposite the very popular Hallgrimskirkja church. All the shops, cafes and top sights are located in very close proximity. Despite its spectacular location, the area is very quiet and peaceful.

Hotel Leifur Eiriksson is a 3* family run hotel, consisting of 47 rooms. There is a dining area where breakfast is served every morning. All rooms have a private bathroom – but the rooms are noted to be quite small and basic. But with SO many things to do here, you won’t be spending much time in your room!

Guest Rating – 7.8/10

Prices range from £114- £222 per night.

Kex Hostel Reykjavik

One of the most trendy hostels in Reykjavik, Kex is located just steps away from all the top bars, restaurants, shopping streets and cultural attractions. If you’re travelling alone or just love to meet new travel buddies from exotic places all over the world – this is a great social hostelKex has a super cosy vibe, with a café, bar, lounge area and even a heated outdoor patio – all great places to mingle. There are cheaper options of shared dormitory rooms, or you can choose a double room for more privacy.

Guest Rating – 8.1/10

Prices range from £34-244 per night- depending on your room.

Fosshotel Baron

Fosshotel Baron is a 3* hotel with 120 rooms and apartments – all with private bathrooms. It is located a few metres away from Laugavegur – the main shopping street in Reykjavik. As one of the cheaper hotels in Reykjavik – it has a basic but practical layout. A great and reliable option for the budget-conscious traveller.

Guest Rating – 8.1/10

Prices range from £105-£298

Loft HI Hostel

Nominated as the best hostel in Iceland in 2015 – Loft Hostel is THE place to stay. Located on Reykjavik’s main street, it is very close to all the major attractions. For one of the best views in the city, head to the top floor balcony – you may even be able to catch a glimpse of the northern lights up here! The hostel is also a great social space – hosting fun events a few times a week. There are a range of dorm rooms and double rooms to choose from. If eating out is to expensive for you, a fully equipped communal kitchen is also available.

Guest Rating – 8.7/10

Prices range from £48-£261 – depending on room choice.

Idglo Guesthouse

Described as ‘great for backpackers, young couples and solo travellers‘, Idglo Guesthouse is located very close to the bus terminal. The perfect location for those planning many excursions around the island. Although it is situated in a quiet area, it still sits within a 10 minute walk of Hallgrimskirkja and the city centre. Rooms are basic yet comfortable – all private but with shared bathroom facilities, plus a shared communal kitchen space.

Guest Rating – 8.1/10

Prices range from £63-£115

Reykjavik Lights

Reykjavik Lights is a Scandinavian style hotel, based a little outside of the city centre (20 minute walk). Although, many excursion companies pick up and drop off here. One of the more reasonably priced major hotels in Reykjavik, it is described as comfortable, modern and very friendly. There is a great breakfast and even a bar area serving traditional Icelandic beer.

Guest Rating – 8.4/10

Prices range from £115-249

If you are planning a trip to Reykjavik, make sure you check out my post on the 5 things you MUST do in Reykjavik.
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  1. what a helpful post – I’ve always wanted to visit Iceland but never known quite where to start. I’m definitely going to be coming back to this post if I ever book some tickets! Thanks so much for sharing x

  2. Love this. I’ve always wanted to visit Iceland.

    Yvonne Wabai |

  3. I’ve been dreaming of Iceland since I was a kid. Super helpful post! I’ll check out all of these places when planning my trip!

  4. That is really helpful. I want to visit Iceland, but this place is crazy expensive. I’ve heard people bring food from home with them when they go there.

  5. Thanks for sharing this! I want to go to Iceland for the northern lights and Reykjavik is so beautiful!

  6. Have always wanted to visit Iceland. Thank you for the insight on accommodations!

  7. Iceland is seriously my favorite country I’ve visited! So magical and surreal this list is great for anyone looking for start planning their trip:)

  8. The hostels alone sound like a lot of fun.

  9. Iceland is on my list but it’s so expensive! This post may help bump up the list a little more 🙂

  10. Iceland looks and sounds amazing!

  11. I absolutely loved Iceland when I visited a few years ago! This post was super handy as I’m planning to return very soon so thank you so much x

  12. Thank you this is SO helpful – I love how you’ve given a variety of different types of accommodation. I have pinned your post for when I finally get round to booking my Iceland trip. I absolutely love your style of writing and have subscribed – love finding new travel blogs!

    1. LiveLargeVoyage says:

      Ah wow thank you so much, I really appreciate it!

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