Finding Upscale and Budget Hotels in Reyjavik, Iceland


I’m just fresh back from a long weekend in Iceland (haha just kidding, I’m exhausted and broke) and I have many stories to tell. Icelandic horses! Glacier hiking! Don’t dent your hire car! But above all, I want to share with you my hotel experience and finding an budget yet upscale accommodation in Iceland!

Iceland hotels are generally in high standing. Majority of the luxury or boutique hotels are located in downtown Reyjavik. Outside of the capital, you can still easily find great accommodations catered to tourists, those who like to be pampered, business-travelers, or, travelers like myself who like to explore and find adventure on a budget!

Hostels do exist in Reyjavik although there are only six. The pricing ranges from as low as ~$20 per day for a multi-bed dorm (4-12 persons) to ~$50 per day for a single room.

I found myself booked at a budget hostel in Rejkavik. The hostel I chose to stay at was Hlemmer Square and it definitely surpassed my expectations for the price I paid! Can you say glamour can come with a low price?

My travel companion and I picked this hostel for several reasons:

a)      It markets itself as a ‘luxury hotel and upscale hostel’ – a combination that frankly I’ve never seen, but was intrigued by.

b)      Its incredibly central location – right next to the bus station, slap bang in the downtown Reyjavik.

c)       The price – the cheapest beds are 2,600 ISK (just under €17), making them amongst the most affordable we could find.

To be honest, past OK-ing my pal to reserve us the beds for three nights, I hadn’t much thought about the hostel until we arrived, exhausted and hungry after a long day’s travel and driving. This was why I was so pleasantly surprised to walk into the hostel and find myself – well – somewhere swanky. Artwork on the walls. A classy bar area. Sofas to lounge on. I could see the luxury hotel part of things, but could this really be a hostel too?

We approached the front desk with trepidation and, conscious of our general state of dishevelment and general sweatiness, asked, “Do we have a booking here?”

We were met with a gigantic grin and the assurance that we certainly did – and how were we doing this fine day?

Honestly, I’ve stayed in a lot of hostels, but the Hlemmur Square staff were really amongst the friendliest and most helpful I’ve encountered. They helped us book onto tours and plan travel schedules, gave good tips and recommendations, and even rang up other hostels in the area when they were full and couldn’t accommodate people without reservations who’d hopefully wondered in from the cold.

I was particularly impressed with how worried they were about us when we rang them in the middle of the night from outside of the city to tell them our car battery had died and what the hell should we do?! They suggested different options, rang us back to check how we were getting on, and the first guy I spoke with even rang his fiancé to see if she could come help us. (FYI, if you’re not too remote you can call a taxi and ask them to come jump-start you. If you’re too far even for a taxi, the police will do it.)

Icelandic people are so friendly! It’s great to know that the hostels work together to resolve an issue or accommodate the traveler. If only I could have stayed to experience each and every accommodation but that unfortunately was not possible..

If you end up staying in Hlemmur Square, here’s some quick info to know:

Their hostel accommodation is on the third and fourth floors, and includes comfy bunk beds with linen included, individual lights and plug sockets by each bed, lockable drawers, a kitchen, free WiFi, as well as a few nice touches such as free shampoo and soap in the showers. I am also reliably informed that the bar downstairs has free music every Thursday, and happy hour from 5-8pm daily, although I can’t vouch for this myself. Oh, and parking is free in the evenings on lots of the streets nearby, which is great if you’ve hired a car, and there’s a female-only dorm as well if that’s your bag.

Where have you stayed in Iceland? Share your hostel or hotel recommendations and any tips!

As always, all opinions are writer’s own.


About Author

Leah Eades is a compulsive traveller and freelance writer, whose adventures so far include working in an Italian nightclub, contracting a mystery illness in the Amazon, studying at a Chinese university, and cycling 700km along the Danube River. She blames cheap Ryanair flights for her addiction. Having recently graduated with an English degree, she is currently based in Florence, Italy.


    • I didn’t – thankfully, I’m vegetarian, so had a get out of jail free card for that! However, my friend did, and she said it was quite nice; apparently like blue cheese (which she loves)

  1. Pingback: (Trying to) See the Northern Lights

  2. I went to Iceland 2 months ago and hated everything about it. The views, the weather, the prices. The smell. Oh, the smell. (No one eats the shark either lol)

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