Best Hotels in Capital Region 2025
Find the perfect accommodation for your Capital Region trip - from luxury to budget.
The Capital Region (Höfuðborgarsvæðið) of Iceland is the country's most populous and vibrant area, centered around Reykjavik, the world's northernmost capital city. It encompasses seven municipalities including Reykjavik, Kópavogur, Hafnarfjörður, Garðabær, Mosfellsbær, Seltjarnarnes, and Kjósarhreppur, together forming Iceland's cultural, political, and economic heart. The region blends dramatic volcanic landscapes, steaming geothermal pools, world-class museums, and a legendary nightlife scene unlike anywhere else on earth.
Accommodation Overview
Hotels by Budget
Find accommodation that fits your travel budget.
Budget-Friendly (Under $50/night)
Guesthouse Butterfly
A popular guesthouse in a quiet residential neighborhood near Laugardalslaug swimming pool, offering simple but comfortable rooms and studios with kitchenettes. The friendly owners provide excellent local tips and the nearby bus connections make getting around easy.
Kex Hostel
Reykjavik's most beloved hostel occupies a historic biscuit factory (kex means biscuit in Icelandic) steps from the Old Harbour. The vibrant communal spaces host regular live music events, the ground-floor bar is a Reykjavik institution, and the eclectic industrial décor creates an unforgettable atmosphere.
Loft Hostel
A stylish and social hostel in the heart of Laugavegur with a rooftop bar that's one of the best in the city. The bright, design-forward dorms and private rooms, excellent common areas, and prime location make Loft one of Europe's best city hostels.
Bus Hostel Reykjavik
A reliable and affordable hostel near the Hlemmur bus terminal and the Laugavegur shopping street. Clean dorms and private rooms, a fully equipped communal kitchen, and a popular common area make this a practical choice for budget travelers wanting a central base.
Reykjavik Hostel Village
A relaxed cluster of budget accommodation in a quiet neighborhood near Reykjavik's botanical garden and swimming pools. The hostel offers dorms, privates, and self-contained cottages at affordable prices, making it popular with families and long-stay travelers.
Galaxy Pod Hostel
Reykjavik's only pod-style hostel offers privacy in a hostel setting, with individual sleeping pods featuring personal lighting, USB charging, and privacy curtains. Located steps from Hallgrímskirkja church, it's one of the best-value options in the city.
Hotel Cabin
A well-located budget hotel near the Hlemmur bus terminal offering no-frills but clean and comfortable rooms. The friendly staff, included breakfast (at some rates), and excellent transport links make this a practical choice for budget travelers.
Mid-Range ($50-150/night)
Comfortable Hotels
Mid-range hotels offer good value with private rooms, reliable amenities, and often include breakfast. Popular with business travelers and tourists alike.
Luxury ($150+/night)
The Reykjavik EDITION
Reykjavik's most stylish hotel opened in 2021 with 253 beautifully designed rooms featuring floor-to-ceiling windows with ocean and mountain views. The hotel houses multiple dining venues including a rooftop bar and Tides restaurant, plus a state-of-the-art spa and indoor pool.
Hotel Borg by Keahotels
Reykjavik's most historic hotel, built in 1930 in art deco style, faces the Austurvöllur parliament square. This grand dame has hosted heads of state and celebrities for nearly a century, with its elegant rooms, famous Borg Bar, and unbeatable city-center location.
101 Hotel
A sophisticated boutique hotel in the heart of Reykjavik's 101 district, 101 Hotel exudes Nordic minimalism with black interiors, locally sourced materials, and curated Icelandic art. The intimate 38-room property features a lively lobby bar popular with Reykjavik's creative crowd.
Ion Adventure Hotel
An architect-designed design hotel in a spectacular volcanic landscape 40 minutes from Reykjavik near Þingvellir National Park. Floor-to-ceiling windows frame the otherworldly lava fields, and the hotel offers helicopter tours, glacier hikes, and one of Iceland's best Northern Lights viewing spots from the hot tub.
Canopy by Hilton Reykjavik City Centre
A fresh and contemporary Hilton property in the heart of Reykjavik offering stylishly appointed rooms with Icelandic design touches. The Geiri Smart Bar serves excellent cocktails and Icelandic bites, while the rooftop terrace offers panoramic city views in a relaxed atmosphere.
Holt Hotel
Reykjavik's most art-filled hotel houses Iceland's largest private art collection with over 500 works by Icelandic masters lining its walls. The Gallery Restaurant serves outstanding Icelandic cuisine and the comfortable, classically furnished rooms offer a sense of cultured calm in the center of the city.
Apotek Hotel
Housed in a beautifully restored 1917 pharmacy building on Austurstræti, Apotek blends its historic facade with sleek modern interiors. The ground-floor Apotek Kitchen & Bar is one of Reykjavik's most popular dining venues, and the 45 elegant rooms are appointed with premium Icelandic design touches.
Complete Accommodation Guide
Booking strategies, neighborhood recommendations, and insider tips.
Best Neighborhoods to Stay
Choose your base based on your interests and travel style.
101 Reykjavik (City Center)
The historic heart of Reykjavik centered around Laugavegur street, with the highest concentration of restaurants, bars, boutique shops, and museums. This is where most visitors stay for easy walking access to all major attractions.
Old Harbour (Gamla höfnin)
The charming Old Harbour has transformed from working fishing port to a vibrant arts and dining district, with whale watching tours, fresh seafood restaurants, the Reykjavik Art Museum, and the popular Marshall House contemporary arts complex.
Vesturbær (West Reykjavik)
A leafy residential neighborhood west of the city center, popular with well-heeled locals and home to the University of Iceland. Quieter than the center with charming local restaurants, the beautiful Vesturbæjarlaug swimming pool, and beach access.
Laugardalur
Reykjavik's recreational heart in the east, home to Iceland's largest swimming pool (Laugardalslaug), the botanical garden, zoo, family park, and multiple sports facilities. Popular with families and sports enthusiasts.
Hafnarfjörður
An independent municipality 10km south of Reykjavik built on dramatic lava fields, known for its Viking heritage, folklore legends of hidden elves and trolls, and excellent waterfront restaurants. Cheaper accommodation than central Reykjavik.
Our Top Picks
Handpicked recommendations for every type of traveler.
The Reykjavik EDITION
Reykjavik's most stylish hotel opened in 2021 with 253 beautifully designed rooms featuring floor-to-ceiling windows with ocean and mountain views. The hotel houses multiple dining venues including a rooftop bar and Tides restaurant, plus a state-of-the-art spa and indoor pool.
Hotel Borg by Keahotels
Reykjavik's most historic hotel, built in 1930 in art deco style, faces the Austurvöllur parliament square. This grand dame has hosted heads of state and celebrities for nearly a century, with its elegant rooms, famous Borg Bar, and unbeatable city-center location.
101 Hotel
A sophisticated boutique hotel in the heart of Reykjavik's 101 district, 101 Hotel exudes Nordic minimalism with black interiors, locally sourced materials, and curated Icelandic art. The intimate 38-room property features a lively lobby bar popular with Reykjavik's creative crowd.
Ion Adventure Hotel
An architect-designed design hotel in a spectacular volcanic landscape 40 minutes from Reykjavik near Þingvellir National Park. Floor-to-ceiling windows frame the otherworldly lava fields, and the hotel offers helicopter tours, glacier hikes, and one of Iceland's best Northern Lights viewing spots from the hot tub.
Canopy by Hilton Reykjavik City Centre
A fresh and contemporary Hilton property in the heart of Reykjavik offering stylishly appointed rooms with Icelandic design touches. The Geiri Smart Bar serves excellent cocktails and Icelandic bites, while the rooftop terrace offers panoramic city views in a relaxed atmosphere.
Holt Hotel
Reykjavik's most art-filled hotel houses Iceland's largest private art collection with over 500 works by Icelandic masters lining its walls. The Gallery Restaurant serves outstanding Icelandic cuisine and the comfortable, classically furnished rooms offer a sense of cultured calm in the center of the city.
Booking Tips
Get the best deals and avoid common mistakes.
Book 2-4 months ahead for summer (Jun-Aug) — Reykjavik is extremely popular and prices spike
Shoulder season (May and September) offers better value with 20-30% lower rates
Most hotels offer free cancellation when booking directly or via major OTAs
City Card (available from hotels) covers public transport and museum discounts
Many hotels include breakfast — check rates with and without to find the best deal
Apartments and guesthouses with kitchenettes dramatically reduce food costs
Northern Lights season (Sep-Feb) is popular but cheaper than summer — book well ahead
Kópavogur and Hafnarfjörður offer lower accommodation prices with easy bus access to Reykjavik
Alternative Accommodations
Beyond traditional hotels, consider these options.
Guesthouses
Family-run guesthouses offer authentic local experiences and often include home-cooked meals. Great for cultural immersion.
Serviced Apartments
Ideal for longer stays or families. Kitchen facilities help save money and provide flexibility.
Hostels
Budget-friendly option for solo travelers. Dorms and private rooms available with social common areas.
Find Your Perfect Stay in Capital Region
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