Where to Stay in Reykjavík: Best Areas for First-Time Visitors

Reykjavík is a small capital, but the area you choose still shapes your trip. Stay central and you walk everywhere; stay further out and you get more space for your money, but you rely more on buses, taxis or a car.

This guide walks through the main areas visitors choose, with practical details that most hotel websites leave out: how far you are from the centre, where tour buses pick you up and how long it takes to reach Keflavík Airport.

Quick answer

• First visit, no car: stay in downtown Reykjavík (postcode 101), between Hallgrímskirkja, Laugavegur and the Old Harbour.
• Quieter but close: the Old Harbour and Grandi area, or the residential streets of Vesturbær.
• Value and space: Hlemmur, Hlíðar, Laugardalur and Borgartún, 10 to 25 minutes' walk from the old town.
• Families with a car: Laugardalur, Kópavogur, Garðabær or Hafnarfjörður.
• Very early flight or late arrival: one night in Reykjanesbær near Keflavík Airport.
• Airport to downtown: about 45 to 50 minutes by car from Keflavík Airport to any of these Reykjavík areas.

Downtown Reykjavík (101): the classic choice

The old town is where most first-time visitors stay, and for good reason. Restaurants, bars, shops, museums, the harbour and Hallgrímskirkja church are all within walking distance. The main streets are Laugavegur, Skólavörðustígur and Hverfisgata, with the small lake Tjörnin and City Hall close by.

• Best for: first visits, short stays, couples, travellers without a car.
• Watch out for: noise on weekend nights near bars, small rooms, and paid street parking in the daytime.
• Good to know: many streets are pedestrian or narrow. Large coaches cannot drive in, so bus tours and airport buses pick up at numbered bus stops nearby, not at the hotel door.

Old Harbour and Grandi

Between the city centre and the sea, the Old Harbour area has whale watching boats, seafood restaurants and museums, and the former fishing district Grandi has turned into a lively area with food halls, cafés and design shops. Hotels here are often newer and quieter at night.

• Best for: whale watching and puffin tours, food lovers, travellers who want a calmer base 5 to 15 minutes from the old town.
• Watch out for: wind off the sea; bring a proper jacket.

Hlemmur, Hlíðar and Borgartún

East of the old town, around the Hlemmur bus hub and along Borgartún, you find many mid-range and business hotels. You are 10 to 20 minutes' walk from Laugavegur, with good bus connections and often better value.

• Best for: good value, longer stays, business travellers.
• Watch out for: some streets feel more like an office district than a holiday town.

Laugardalur

Laugardalur is a green valley with the city's largest geothermal swimming pool, a botanical garden, a small family zoo and sports grounds. Several larger hotels and hostels are here, around 10 minutes by car from the centre.

• Best for: families, travellers with a car, swimming pool lovers.
• Watch out for: you will take a bus, taxi or car into the centre in the evening.

Vesturbær (West Town)

West of the centre, Vesturbær is a residential area of colourful houses, local bakeries and the much-loved Vesturbæjarlaug pool. There are few hotels but many apartments.

• Best for: living like a local, apartment stays, quiet nights.
• Watch out for: fewer restaurants in the immediate area.

Kópavogur, Garðabær and Hafnarfjörður

South of Reykjavík, these towns are part of the capital area. Hafnarfjörður is a charming harbour town with its own restaurants and lava-field walks, about 15 minutes by car from the centre and a little closer to Keflavík Airport.

• Best for: travellers with a rental car, families who want space, and those who prefer a smaller-town feel.
• Watch out for: longer journeys into central Reykjavík without a car.

Near Keflavík Airport

Reykjanesbær, the town next to the airport, has hotels and guesthouses about 5 to 10 minutes from the terminal. It is not a place to spend your holiday, but one night here can make sense if you land very late or fly out at dawn. The Blue Lagoon and the Reykjanes peninsula are close by.

For most travellers, though, an extra night near the airport is not necessary: a pre-booked driver can collect you from a Reykjavík hotel at four in the morning just as easily. Read our guide to early morning flights from Keflavík.

Tour pick-ups: the detail that matters

If you plan to join bus tours, check where your hotel's nearest pick-up stop is. Big tour companies collect guests at numbered bus stops around the centre, and the coach then often stops at a terminal to change buses. With a private tour, your driver collects you at your hotel and goes straight to the first stop.

We run private tours to the Golden Circle, the South Coast, Snæfellsnes and more, with hotel pick-up anywhere in the capital area.

7–8 hours · private

Golden Circle

Þingvellir · Geysir · Gullfoss

Car

1–4 people

90,000 kr

Van

5–7 people

120,000 kr

Book this tour

Getting from Keflavík Airport to your hotel

Wherever you stay in the capital area, the drive from Keflavík Airport takes about 45 to 50 minutes. Our transfer to Reykjavík costs 20,500 kr per car for 1 to 4 people and 28,000 kr per van for 5 to 7, with your driver waiting in arrivals.

• Fixed price per car, not per person, agreed before you travel
• Economy (Tesla) for 1 to 4 passengers, Van (Mercedes Vito) for 5 to 7, minibus for 8 to 16 on request
• Your driver meets you in the arrivals hall with a name sign and checks your flight before leaving
• 45 minutes of free waiting at the airport
• Pay 20% to book and the rest in the car by card or cash, or pay everything online
• Free cancellation up to 24 hours before pick-up

We have been driving travellers around Iceland for ten years, and we go everywhere in the country, not only to Reykjavík.

FAQ

What is the best area to stay in Reykjavík for first-time visitors?

Is it better to stay in Reykjavík or near Keflavík Airport?

How far is Reykjavík from Keflavík Airport?

Do tour buses pick up at hotels in downtown Reykjavík?

Is downtown Reykjavík noisy?

Where should families stay in Reykjavík?

Do I need a car if I stay in Reykjavík?

Can your driver drop us at a hotel on a pedestrian street?