5 Best Hotels In Reykjavik You’ll Love

Last Updated on December 11, 2022 by Editor

Reykjavik may be best known as the gateway to Iceland’s natural wonders, but it’s also a vibrant city that’s home to a number of hotels that are redefining contemporary luxury.

Whether you see yourself in an ultra-modern chic highrise or surrounded by the most extensive collection of Icelandic art, Reykjavik has the sanctuary that you crave. And because Downtown Reykjavik is not that big–you can walk end-to-end in under 30 minutes–there’s no issue being near all the main attractions.

Still, we’ve only selected our favorite hotels, all within a five-minute walk from the heart of Reykjavik, the Rainbow Street that runs from the famous Hallgrimskirkja church to the main street of Laugavegur. This is also where you’ll find our favorite date-worthy Reykjavik restaurants.

Pack your bags, here are the 5 best hotels in Reykjavik, plus a bonus splurge-worthy resort you won’t want to miss!

Exterior of Hotel Borg, one of the luxury hotels in Reykjavik

Historic Luxury – Hotel Borg

Set across a quiet green square from Althingi Parliament House, Hotel Borg combines old-world elegance with modern luxuries.

Convenient to all of Reykjavik’s downtown attractions in a location that is close to the city center, it’s at the end of town that’s also closer to the Harpa Concert Hall and whale watching embarkation point.

Art deco interior at Hotel Borg

Nonetheless, the hotel’s location off the main thoroughfare means that you immediately experience a sense of peace and relaxation upon arrival. That feeling extends to guest rooms that are much larger than typical city rooms.

And continues with windows overlooking park gardens, or with bathrooms featuring soaking tubs.

Guest room at Hotel Borg

Most relaxing of all, hotel guests receive complimentary access to the spa where they can enjoy the steam room, sauna, hot tub, or fitness room. And there’s a full range of beauty treatments available, including facials and massages, that incorporate Icelandic skin care products.

Hotel Borg spa

An in-house restaurant serves breakfast (at additional expense,) as well as fine Icelandic cuisine. Parking is not available at the hotel, but there is a parking garage nearby.

Hotel Alda lobby

Reykjavik Main Street – Hotel Alda

If you want to be where all the action is, then Hotel Alda is your best choice. The boutique hotel is located right on Laugavegur, Reykjavik city’s shopping street.

Floor to ceiling windows in the lobby are great for people watching, as well as being a light and airy place to hang out. And yet Hotel Alda has one unique feature – a very hip barber shop.

Hotel Alda barber shop

Rooms are cozy with Icelandic wool accents even extending to fixture covers. Fine-quality linens elevate the standard bed configuration we saw all over Iceland–twin beds that are joined into one upon request.

And as is typical here, separate covers even for king beds.

Hotel Alda room

Hotel Alda does have a good-sized fitness room that leads out to a courtyard outfitted with a hot tub.

Hotel Alda hot tub

Breakfast is available, at an additional expense. Do bear in mind that because it’s located on a busy thoroughfare, loading and unloading can be challenging. Street parking, free after 6 pm, may be available nearby, and there is a parking garage just down the street.

Canopy By Hilton City Center hotel in Reykjavik lobby

Canopy By Hilton City Center

Canopy By Hilton City Center combines the best of both worlds by being right off Laugavegur Street, on a side street of the downtown area. So, it’s at the heart of the city without the hassles of being right on the main street.

And because it’s one of Hilton’s lifestyle boutique hotels, it’s a fun place to stay.

Canopy By Hilton City Center hotel in Reykjavik happy hour

The lobby is a welcoming spot to hang out, while Happy Hour at the bar is a great way to meet other guests.

Canopy By Hilton City Center hotel in Reykjavik breakfast bar

When booking the hotel, you can select a Half Board option that includes breakfast and dinner. The hotel does not offer free parking, but there is a parking garage only half a block away. And, of course, there is the benefit of using (or earning) Hilton points.

Marriott Hotel In Reykjavik

If you prefer to use (or earn) Marriott points, consider the 101 Hotel, a member of Design Hotels. It’s one of the most stunningly beautiful hotels in the city, featuring an excellent collection of modern Icelandic art.

Hotel Skuggi lobby

Downtown Reykjavik Boutique – Hotel Skuggi

Experienced Iceland visitors, who return year after year, choose Hotel Skuggi. The boutique is favorably located just one block from Reykjavik’s Main Street and within a 3-minute walking distance from Rainbow Street. But it offers a number of amenities at no extra charge.

Hotel Skuggi guest room

Guest rooms are snug, but we like the quotes on the walls. They’re taken from a coffee table book about Iceland photography found in each room. Rooms feature an electric kettle, with coffee/tea, although the discounted beer at Happy Hour may well be the beverage of choice.

And if you request a room on the 4th Floor, windows open out onto a balcony that runs 180 degrees around the building. It’s a lovely spot to watch sunsets, and if you squint, you can even see the top of the waterfall-shaped Hallgrimskirkja landmark. And if you’re very fortunate indeed, you might even spot the Northern Lights above.

A very extensive breakfast buffet is included. But perhaps the best perk that we like at Hotel Skuggi is the parking in the indoor basement garage. It’s both free and convenient.

Hotel Holt exterior

Hotel Holt – Art In Central Reykjavik

Constructed in 1965, with interior design by renowned designer Gunnar Magnússon, Midcentury Modern Hotel Holt features a more extensive collection of Icelandic art (the largest private collection) than even city museums. In fact, there are over 450 works on display, from a total of 1560 pieces.

Hotel Holt lobby

Paintings and sculptures are on view in the lobby, bar, restaurants, hallways, meeting rooms, and even guestrooms.

Hotel Holt art

And the collection includes over 500 paintings by Jóhannes S. Kjarval, one of Iceland’s most influential and prolific artists. His style varied greatly but included both the realistic and fantastical that drew inspiration from Iceland’s landscapes and folklore.

Hotel Holt mural

You can learn more about the art collection online, or ask to see the gallery binder at the front desk.

Hotel Holt guest room

As for the hotel, the guest rooms are comfortable if a little overdue for an update. Breakfast is available (for a fee) in the main dining room. And parking is free in the small outdoor lot.

Note that Hotel Holt is a little removed from City Center. It’s located on a residential street on a hill behind The National Gallery of Iceland, but it’s still only a 4-minute walk from Rainbow Street. And one of Reykavik’s most romantic restaurants, the award-winning Three Coats, is just around the corner.

Blue Lagoon exterior

Bonus Splurge Hotel

If you have time for one more Reykjavik hotel, consider splurging at a resort that’s actually near the airport. The Retreat Hotel at the Blue Lagoon is the perfect place to kick off an Iceland vacation or wind down after an island-wide road trip.

geothermal pool at the Blue Lagoon

With an overnight romantic getaway, you not only have access to the quieter side of the geothermal pools, and the legendary spa treatments, but you can partake of signature dining experiences.

Iceland Travel Guides

Whether you choose to stay in Reykjavik only upon arrival or departure, or if you stay long enough to explore the capital city’s many attractions, we’ve got you covered. We’ve put together a number of guides for planning your best romantic getaway yet!


  • Sandra Foyt

    Sandra Foyt is a storyteller, road trip junkie, and award-winning travel photographer. A veteran of many cross-country road trips, she drove Route 66, the Lincoln Highway, the Fossil Freeway, the Extraterrestrial Highway, and even “The Loneliest Road in America.” Sandra is based in Upstate New York, with family homes in California and the Caribbean. Her work is influenced by tropical colors and warm relationships. And she believes that the best travel photography connects us across time, place, and culture.