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10 Best Budget Hotels in Iceland

Discover the 10 best budget hotels in Iceland. Great accommodations that offer excellent value, cozy stays, and convenient locations—so you can experience the beauty of Iceland without breaking the bank.
9.0 Wonderful

0.5 km to Geothermal Spa Area • 0.3 km to Laugarvatn Lake

This authentic and welcoming hotel offers cozy and comfortable rooms complete with free WiFi, a hearty breakfast featuring local specialties, and warm, personalized service. Its standout quality is the proximity to stunning geothermal attractions and the serene lake views that lend a truly relaxing atmosphere, perfect for unwinding after a day of exploring.

9.0 Wonderful

0.5 km to Northern Lights Viewing Spot • 1 km to Nature Walk Trail

The Hotel North offers a modern, budget-friendly option designed with the traveler in mind. The rooms are comfortable, with complimentary WiFi and a robust breakfast to start your day. Its unique appeal comes from the panoramic window views that capture the rugged Icelandic landscape, offering a daily dose of nature’s splendor right from your room or the outdoor spa tub.

8.8 Very Good

0.7 km to Viking Heritage Centre • 0.6 km to Old Harbor Walk

You will find Hotel Viking to be a delightful hotel with plenty of local character. This charming hotel offers snug rooms with free WiFi, a complimentary breakfast, and friendly, attentive service that makes you feel like a part of the community. Its Viking-inspired décor provides a playful nod to Iceland’s storied past, creating an engaging environment that stands out among budget hotels.

9.4 Exceptional

1.2 km to Mývatn Nature Baths • 2 km to Dimmuborgir Lava Fields

You will be captivated by the natural beauty and inviting simplicity of Sel Hotel Mývatn, an ideal base for couples and families alike. The hotel offers modern rooms with free WiFi, a complimentary breakfast, and warm service that reflects the charm of the Mývatn region. A distinctive feature here is the seamless blend of geothermal elements into its design, echoing the unique volcanic surroundings and enhancing your Icelandic adventure.
9.6 Exceptional

0.8 km to Fossatún River Trail • 1 km to Local Farm Experience

You will enjoy the rustic allure of Fossatún Country Hotel. Set in the Icelandic countryside, the hotel features well-maintained, cozy rooms with free WiFi and a locally inspired breakfast that energizes you for a day of exploration. Its true charm lies in its rural setting, offering direct access to scenic trails and authentic farm experiences that urban hotels simply cannot match.

8.6 Excellent

0.6 km to Volcano Viewpoint • 1 km to Lava Fields Exploration

You will be intrigued by the quirky character of Hellishólar Hótel Eyjafjallajökull, a budget haven that fuses modern comfort with Iceland’s dramatic volcanic legacy. The hotel offers contemporary rooms with free WiFi, a satisfying breakfast, and exceptional views of the iconic Eyjafjallajökull volcano. Its uniquely themed décor and local storytelling provide an engaging twist that makes your stay both fun and memorable.

9.4 Exceptional

0.7 km to Historic Square • 0.9 km to Cozy Coffee House

Hotel Von is known for its minimalist elegance, that combines simplicity with that authentic Icelandic style. With clean, comfortable rooms featuring free WiFi and a complimentary breakfast, this hotel offers a straightforward yet welcoming experience. Its artistic, modern decor—reflecting local culture—adds a distinctive flair that sets it apart from the standard lodging options on the island.

8.2 Very Good

0.5 km to Aurora Borealis Viewing Area • 1 km to Local Hiking Trail

The Hotel Dalvik – Aurora Leisure, a perfect budget choice for those seeking both relaxation and adventure. The hotel features comfortable rooms with free WiFi, a hearty breakfast, and friendly service, all while being ideally positioned for chasing the Aurora Borealis. Its location near top northern lights viewing spots gives it an edge over many other budget accommodations in Iceland.

9.2 Wonderful

0.3 km to Laugavegur Shopping Street • 0.5 km to Harpa Concert Hall

There is a modern, tech-savvy vibe about the CityHub Reykjavik. Offering compact, stylish cabins complete with free WiFi and a vibrant communal lounge, this hotel is ideal for young travelers and urban explorers. It has a wide range of amenities including an outdoor hot-tub. Its central location allows you to immerse yourself in Reykjavik’s bustling culture while keeping expenses low and comfort high.

8.8 Very Good

0.4 km to Heiðmörk Nature Reserve • 0.7 km to Local Walking Trai

The Hótel Heiðmörk is a tranquil retreat nestled amidst Iceland’s serene natural landscapes. The hotel provides simple yet comfortable rooms with free WiFi and a nourishing breakfast, perfect for recharging after outdoor adventures. Its distinctive location in a peaceful setting offers immediate access to hiking trails and nature walks, making it a perfect escape from the hustle and bustle of city life.

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