Cheap Hotels in Reykjavik? These Are $200 or Less

Can you find cheap hotels in Reykjavik, the capital of Iceland? Well that depends on your definition of “cheap” or “inexpensive” because it’s all relative on this Scandinavian Island. We’ve rounded up some Reykjavik hotels under $200 per night though—some quite a bit lower in the less popular months—that won’t cause as much sticker shock as most places to stay in the city.

Despite Iceland’s popularity and the many cheap flights available for getting to the country from the USA and Canada, prices in Iceland are still high compared to many other places around the world. For example, a beer in a bar will set you back about $8-10, a 12-inch pizza costs $16-$20, and in more upscale restaurants, you’ll have a hard time finding main dishes for less than $40.

Those higher costs carry over to the accommodation too. Most Airbnb rentals in Iceland start at $125 for studio or one-bedroom apartments (often with “cozy” in the description) and can run up several times that in the summer. Even bunk bed dorm lodging costs $30-60 per night—for the pleasure of sharing with 5 to 11 other people.

It’s quite difficult to find any hotels rated 9+ out of 10 on the hotel booking sites, probably because it’s hard for anyone to feel like they got a great value when 3-star hotels top $350 and 4-star ones routinely top $500 per night. The top places to stay in Reykjavik are more than $1,200 June through August. 

If you’re looking for something nicer and more private than a dorm bed in Iceland, the prices just keep rising, particularly during peak summer months when prices can be double the winter rate. The good news is that many hotels and guest houses offer perks like free breakfasts and kitchenettes to help offset some of the cost of dining. If you’re traveling solo, Europe is big on tiny rooms with tiny beds, so in many cases you can find something cheaper for a single if you don’t mind tight quarters. 

Below are some of the best Reykjavik budget hotel options, ones that are highly rated but won’t cause you to rack up too many digits on your credit card for a few nights’ vacation in Iceland.

Kex Hostel

For a lively stay where you can mingle with other travelers, Kex Hostel is a perfect choice. Located in a former biscuit factory downtown, the hostel is known for its trendy cafe and bar which often hosts live music performances from local and international musicians.

Thankfully you have choices here beyond dorm beds, but at prices lower than most hotels. The cheapest double rooms have shared bathrooms, but rooms with private baths are available. It’s actually cheaper for two people to get a private room than it is to book most dorm beds. Options under $200 per night are a “tiny room,” twin room, and double room. (They also have 4- and 6-bed family rooms for $214 to $285.)

There’s an outdoor patio, gym, laundry room, common room, and guest kitchen. Wifi is free and bikes are available to rent. Book at the official website or check rates online at Booking.com.

Alva Hotel Reykjavik 

This is one of the few Reykjavik budget hotels with good ratings that you can find still going for less than $200 in the summer. That gets you a room with two beds as well, so it’s a good choice for families who won’t be around long enough to rent an apartment. It’s not smack in the center, but is close enough to attractions that you can walk there without getting worn out. 

Rooms are well-equipped with TVs, tea kettles, coffee machines, and hair dryers. There are recharging sockets by the bed and most rooms have a sofa or some kind of sitting area.

Rates don’t include breakfast, but there is free parking if you’re renting a car to go explore Iceland. Check rates for your dates here. 

Guesthouse Sunna

Located just steps from Hallgrimskirkja Church in the city center, Guesthouse Sunna is another great value. Though the cheapest rooms are pretty stripped-down (don’t expect more than a bed, desk, a few shelves, and a nightstand) there’s free parking and the shared bathrooms are only used by two or three rooms. Each floor also has a small shared kitchenette with microwave, mini fridge, and two stovetop burners.

Breakfast is served each morning and includes eggs, toast, fruit, cheese, meat, coffee, and juice, so you can fill up before heading out for the day.

Winter rates are around $100 for a double room while summer rates jump to $186 per night. See the Sunna website or check prices at Hotels.com.

Loft Hostel

Part hostel (dorm beds start at $36), part hotel, Loft offers basic but cozy rooms, a self-catering kitchen, cafe and communal space, and an excellent location in the heart of downtown Reykjavik. On the hotel side, double rooms have private bathrooms, floor-to-ceiling windows, and comfy beds.

If a hotel is more your speed, there’s no forced interaction, but if you like the hostel vibe when you leave your room, you can meet people in the cafe, join a tour, or check out the calendar of daily activities.

Double room rates at Loft Reykjavik start at around $140 in winter and stay under the $200 mark in summer for a double, twin, or deluxe double room. See our full review of Loft Hostel here.

Room with a View Apartments

Room with a View is ideal for those who want a bit more privacy and luxury (and don’t mind paying for it). The stylish apartments offer TVs, hairdryers, irons, access to common Jacuzzis and a sauna, and all have private bathrooms and kitchenettes.

Each one has a great view of the city center and some have apartments even have dining rooms and their own Jacuzzi tubs. The apartments range in size to accommodate anywhere from two to ten people, but the smaller apartments are the most affordable, the only ones staying under $200 in the high season.

See our detailed review here or check rates for your vacation days on Expedia.

Hotel Aska

Hotel Aska is a small and trendy hotel a 2-minute walk from Laugavegur, with 44 rooms “designed to resemble the volcanic eruption in Geldingadalur.” Whether that’s a good thing or not probably depends on whether she’s erupting, as she was at the time of writing. The hotel blends in well with Reykjavik’s architecture, looking like a collection of row houses.

With four different room types—single, double, twin, and superior, this is a quaint and chic spot where you can often get a room starting at $145 double depending on the time of year and time in advance booked.  Described as a spot to make you feel like a local, it’s perfect for the explorers seeking convenience as well as flair, in an Iceland hotel that gets consistently positive reviews from guests on Expedia, Booking, and elsewhere. 

Check rates here or head to the hotel’s website.

Grandi by Center Hotels

Grandi Hotel is a rarity in Reykjavik: a full-service hotel with all the amenities for less than $200 a night. We’re talking a concierge desk, room service, restaurant, and a bar. 

Only the standards come in under $200, and may go over that in the summer, but they are well-equipped and the location is quite central. The hotel is walking distance to Hallgrímskirkja Church, Reykjavik Old Harbour and Harpa Concert Hall & Conference Centre. 

Breakfast is not included and it’s $27 at at the time of writing, but this highly rated place to stay in Reykjavik is a great value overall. Check rates online here. 

Reykjavik Lights by Keahotels

Reykjavik Lights is a beautiful spot above the hot spring valley of Laugardalur, a convenient 9-minute distance from Reykjavik airport. As the name implies, it is outside the city center.

This would be a good place to stay if arriving late or leaving early for a flight. With rates starting at $149 double during slower seasons, it has private rooms from singles to triples with various tiers.

Lots of amenities are included, from parking and breakfast to Wi-Fi and laundry, maximizing convenience during your stay. See the official website or book online here.

How about you? Have you found a great Reykjavik budget hotel that we missed here? Let us know in the comments!

Original article on cheap hotels in Reykjavik by Katie Hammel, 2024 updates by editor Tim Leffel. All photos by Hammel except where indicated.