Halló, it’s time to feast your eyes on the best hostels in Iceland. It’s the one and only guide you’re going to need to navigate this unique land of ice and fire.
From the coolest hostels Reykjavik, the coastal capital, to Akureyri on the North coast. And everywhere in between!
This is the perfect guide to lead you to the top budget accommodations and hostels in Iceland.
Don’t let the difficult place names put you off. Have fun trying to pronounce them and breathe a sigh of relief when you realise Icelandic’s speak great English!
Are these the absolute best hostels in Iceland?
Já! Yes! There is no doubt about it.
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We’ve scouted this beautiful land to find hidden gems, hostels worth remembering. In fact, we even have a 5 star hostel in Reykjavik: KEX Hostel.
Sure, it’s a small guide compared to many destinations. That’s probably because there is only a population of around 339,000, one-third of which lives in Reykjavik! Yet solo travellers, budget travellers and couples will not be disappointed.
To help you out further, we’ve included a big hostel map to pinpoint your chosen hostel(s).
Furthermore, we share with you our ultimate hostel packing list to prepare you before you go.
The destinations we cover that hold the best hostels in Iceland – heading in a clockwise direction – are:
- Reykjavik
- Keflavik
- Grindavik
- Borgarnes
- Hellissandur
- Akureyri
- Húsavík
- Egilsstaðir
- Vík
- Seljaland
- Heimaey, Vestmannaeyjar
- Hvolsvöllur
- Haukadalur
- Hafnarfjördur
- All Best Hostels in Iceland put on a Map
- FAQs
- More Hostels in Europe
- Destination not listed?
Note: all of the destination, except for Reykjavik, only include one hostel recommendation. That’s because we couldn’t find any more worth mentioning that we would recommend to our readers, friends and family.
Overview: Best Hostels by Traveler Type
| ⭐ Best Hostel in Reykjavik: | KEX Hostel |
| 🛏️ Best Hostel in Grindavik: | Harbour View Cottages |
| 🏞️ Best Hostel in Hellissandur: | The Freezer Hostel & Culture Center |
| 🌋 Best Hostel in Vík: | The Barn |
| 🥳 Best Party Hostel: | Reykjavik Loft Hi Hostel |
| 👨👩👦 Family Hostel: | Tehúsið Hostel |
| 👩💻 Best for Digital Nomads: | KEX Hostel |
| 🧘 Cozy Hostel: | Geysir Hestar |
Best Hostels in Reykjavik
Our guide to the top Iceland hostels obviously starts with the capital. No doubt you’ll begin your Icelandic adventure in Reykjavik. And honestly; it’s a wonderful city with many quirky attractions and hip vibes.
From here it’s easily accessible to the famous Blue Lagoon and the start point for the popular Iceland Golden Circle tourist route. This is also the ONLY destination in Iceland where we have more super hostel recommendations:
- KEX Hostel – 5 Star Hostel
- Bus Hostel
- Loft Hi Hostel
- City Hi Hostel
Read: our complete guide to the best hostels in Reykjavik including useful travel information and activities.
1. KEX Hostel
Hands up if you like biscuits!
KEX is the Icelandic word for biscuit, and it just so happens to be our #1 super social hostel and only 5 star hostel in Iceland. It has room for 215 people, so you can expect all rooms types on offer – dorms (female only, too), single, twin, double & family rooms.
The vintage industrial design includes a lovely bar and restaurant, large kitchen and outdoor patio (heated).
It’s a great place for meeting travellers and locals alike.
Compare prices and read reviews at: Booking.com | Hostelworld | Full Review
2. Bus Hostel
The Bus Hostel is a smaller, more intimate creative hostel in a quiet neighbourhood. We’ve stayed here and loved it!
In the main lounge there is a cute cafe surrounded by vintage furniture. It’s the place for relaxing, meeting others and catching up with Wi-fi bits and bobs.
A range of dorms and privates are available, and it’s possible to walk to the centre of Reykjavik from here.
Compare prices and read reviews at: Booking.com | Hostelworld
3. Loft Hi Hostel
Want to chill out in Iceland? Visit Loft Hi Hostel, this place share the nordic vibes at its best, a very cosy common areas with board games and a bar where you can meet other travellers and share your travelling stories.
Visitors can choose from:
- Female-only dorms
- Mix dorms and private rooms
Good to know: Brings your own lock
What can you expect at this hostel?
- Karaoke
- Pub crawls
- Yoga
- And drag shows
Compare prices and read reviews at: Booking.com | Hostelworld
4. City Hi Hostel
We hear you want to experience an authentic Nordic décor. Alright, let us introduce you to City Hi Hostel.
Located in the heart of Laugardalur Park, this hostels offer:
- Female-only dorms
- Private double rooms ( great for couples)
- Mixed dorms
Located by a walking distance from Iceland’s biggest thermal pool and spa, which you should definitely experience Icelandic warn outdoor pools.
Cosy, stylish and beautifully decorated, this hostel is a great hostel for female solo travellers in Iceland.
Compare prices and read reviews at: Booking.com | Hostelworld
Best Hostels in Keflavik
Alright, we have decided to recommend you the best hostels in Keflavik since it is a great place to stay before you leave this beautiful Island of Ice.
We chose to stay here since it was a great location to our most important stop. Blue Lagoon. Yes, you hear us! The world famous Blue Lagoon Spa.
We found one great hostel which are very close to Keflavik International airport.
1. Start Hostel
Start Hostel in Keflavik is a perfect place for travellers wanting to enjoy for the first or last time Blue Lagoon in Iceland.
Why?!
This hostel is very close to Keflavik International Airport and it is an easy place to get bus transfer to and from Reykjavik and to the world famous Blue Lagoon in Iceland.
What else do they offer?
Visitors can choose from single, double and private room.
- Free breakfast
- Free and fast WI-Fi
Compare prices and read reviews at: Booking.com | Hostelworld
Best Hostels in Grindavik: Harbour View Cottages Grindavik
Most people head to Grindavik to visit the world-famous Blue Lagoon Spa.
And if you do please stay at the beautiful Harbour View Cottages in Grindavik, from there you can enjoy fabulous mountain views, stunning sunsets and sunrises and if you are lucky the northern lights.
Located at 8 minutes from the Blue Lagoon, this place offers free parking and free WiFi.
See you all there!
Compare prices and read reviews at: Booking.com
Best Hostels in Borgarnes: B59 Hotel
Most people head to Borgarnes to prepare for a trip to Snaefellsnes National Park on the nearby peninsula. It’s a great midway point from Reykjavik.
Whilst you’re in Borgarnes, stay at B59 Hotel.
Actually, there is a luxurious hostel adjacent to the hotel.
It boasts 4 and 12-bed dorms with shared bathrooms. Each bed is like a pod, though without a privacy curtain.
There is also space to chill/work/chat in the room and big windows letting in plenty of light.
Although there is no kitchen on-site, breakfast is available on request.
Of course if you’re a couple or single traveller looking to splash out, you can opt for the hotel that boasts a buffet breakfast, spa and fitness centre.
Compare prices and read reviews at: Booking.com
Best Hostels in Hellissandur: The Freezer Hostel & Culture Center
Hellissandur is certainly the closest destination to stay when looking to explore Snæfellsjökull National Park. We highly recommend visiting the Kirkjufell Mountain, especially if you’re exploring by car.
The only place worth staying is The Freezer Hostel & Culture Center.
It’s a multi-award winning hostel that was once a fish factory, now a cultural and social hub that travellers love.
Enjoy regular activities including theatre, stand up comedy, pub quizzes and live music.
What else?
- Huge lounge
- Tikibar w/ happy hour 18:00-20:00hrs
- Book exchange
- Plenty of board games
The 4 dorms can host a total of 22 guests. What a lovely size!
Compare prices and read reviews at: Booking.com | Hostelworld
Best Hostels in Akureyri: Hafnarstræti Hostel
After a long stretch on the Route 1 road, you’ll come across Akureyri, a surprisingly lovely city at the base of Eyjafjörður Fjord.
A new, modern hostel option in Akureyri is Hafnarstræti Hostel.
It’s perfect if you enjoy a completely private pod capsule bed. They happen to come in single and double size!
Breakfast is included, and there is a handy kitchen for saving coins and cooking up a yummy dinner.
It really is the best of both worlds with a big lounge and pool table to encourage socialising between travellers.
Located in the centre of town, restaurants, coffee houses and shops are all within walking distance.
Compare prices and read reviews at: Booking.com | Hostelworld
Best Hostels in Húsavík: Húsavík Green Hostel
If you have time to spare, it would be silly not to head further north to the Whale Capital of Iceland.
Yep, this is where you can discover the awesome Húsavík Whale Museum and jump aboard a boat to head out and (hopefully) see humpback whales in their natural habitat.
The beautiful Húsavíkurkirkja, a wooden church built in 1907, is also a must see.
As for where to stay? It has to be Húsavík Green Hostel.
It’s located in central Húsavík, a mere 200m from the whale watching piers.
There are plenty of rooms, including single, twin, double, quad and shared dorms.
Staff is friendly and there is a handy kitchen on-site. There is also a decent library in the common area.
Compare prices and read reviews at: Booking.com
Best Hostels in Egilsstaðir: Tehúsið Hostel
If you love natural hot springs, outstanding natural beauty and a pleasant climate, you’ll love Egilsstaðir.
Tehúsið Hostel is the best accommodation in town, offering great value and comfort.
First of all, the rooms are straight forward yet cosy. The dorms include male, female and mixed and there are two family sized rooms for 2-6 people.
Coming soon is a great cafe and bar. Until then, feel free to make use of the communal kitchen.
Compare prices and read reviews at: Booking.com | Hostelworld
Best Hostels in Vík: The Barn
Way down on the south coast of Iceland is a beautiful remote seaside village. It’s the gateway for black sand beaches, Mýrdalsjökull glacier and Katla volcano.
If you’re lucky, you may spot puffins in the area!
The Barn, though it conjures up images of wooden design and small spaces, is actually a modern, minimalistic hostel.
Every space is stylish and large. The dark decor will certainly help you relax and feel safe from the outside elements.
Meet others and have a chat in the bar or kitchen, and shut the world away with a simple slide of your privacy curtain.
The black sand beach is a short walk away – a unique sight to behold.
Compare prices and read reviews at: Booking.com
Best Hostels in Seljaland: Paradise Cave Hostel
No doubt you’ve heard of Seljalandsfoss?
It’s the famous waterfall in Iceland, and it’s possible to walk right behind it! Truly beautiful and great fun. As long as you don’t mind getting a bit wet.
Not far from here is the quaint Paradise Cave Hostel. It is one of the best hostels in Iceland for sure!
It’s clean, tidy, simple and has a great location. Due to lack of light pollution, it’s also a great place to spot the northern lights!
We recommend it for couples, friends and small families. This is due to the room choices. There is also a basic dorm available.
There’s a garden, terrace and shared kitchen to use.
Compare prices and read reviews at: Booking.com | Hostelz.com
Best Hostels in Heimaey, Vestmannaeyjar: Aska Hostel
Formed by volcanic eruptions, the stunning archipelago of Vestmannaeyjar sits off the south coast of Iceland. Certainly worth the trip!
There are two volcanoes to see. One of which erupted in 1973. That’s both exciting and scary, right?!
Set on the island of Heimaey is the pretty Aska Hostel with a local feel.
Aska means ‘ash’ which is quite fitting as it sits just 10-minutes from a cool volcano museum.
There is an 8-bed mixed dorm, but we think the private options are the best. Just wait until you see the huge windows and views.
Super cool: guests receive one ticket per day for free entry to a nearby swimming pool.
During the summer months (May-August) a simple breakfast is on offer.
Compare prices and read reviews at: Booking.com
Best Hostels in Hvolsvöllur: Midgard Base Camp
On the way back up to Reykjavik, around 100km east, is the small town of Hvolsvöllur. As it’s just of the Route 1 road, it’s a handy spot for a planned or spontaneous stop over.
Yet honestly, the main attraction has to be Midgard Base Camp.
Hostel. Restaurant. Adventure tours. Bar. What else do you need?
This is a local family business that has gone to great effort to create a social, friendly place in a great location.
Choose between shared dorms and private rooms. Dump your bags and mosey on over to the…
- Rooftop hot tub and sauna
- On-site restaurant & bar
- Free tea & coffee station
Speak to the awesome staff to learn about and sign up for one or many great tours in the area.
Compare prices and read reviews at: Booking.com | Hostelworld
Best Hostels in Haukadalur: Geysir Hestar
Haukadalur is in fact the name of a valley. Not just any valley, but one that’s home to erupting hot springs, also known as geysers!
This geothermal area will leave you feeling like you’ve left earth and landed on some crazy abandoned planet. Watch your step – the water flowing around these parts exceeds 100 degrees celsius – eep!
Oh and another thing; one of the coolest hostels in Iceland happens to be situated here.
Welcome to Geysir Hestar, where home and horses meet.
The family own over 100 horses and wish to share their passion with you. If you love riding or want to try, get booking.
There’s a main guesthouse with rooms for 2-4 persons, and private cottages for larger groups.
Feel at home thanks to cosy design in the midst of typical Icelandic nature and landscape.
Compare prices and read reviews at: Booking.com
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Our Favorite Hostels in Iceland put on a map + sights
Below we have put ALL of the greatest hostels in Iceland mentioned in this article on a map.
That’s because we want to make your planning as hassle free and straight forward as possible!
We’ve marked them as follows:
- Design Hostels: Blue
- Backpacker-Type Hostel: Orange
- Other recommendations: Purple
Any questions about hostels in Iceland? 🤔
Join our Facebook Group!
Ask all your questions and connect with like-minded wanderers 🔥
FAQs
Alright, if you haven’t found your accommodation yet. Below we list all the frequently asked questions.
Take a look!!
More Hostels in Europe
There are many, many awesome hostels in Europe to be discovered and enjoyed, including out-of-this-world 5 star hostels.
Easy: find all of the best hostels in Europe here.
We’ve gone one step further and created these awesome guides to nearby Nordic destinations to Iceland:
- best hostels in Norway
- best hostels in Oslo, Norway
- best hostels in Stockholm, Sweden
- best hostels in Copenhagen, Denmark
- best hostels in London, UK
Destination not listed?
Besides the listed accommodation, we also put together the best hostels in the world; the 5 Star Hostels.
We stayed in a former winery in Santorini, in a former jail-now 5 Star Hostel and many more. And we share all of these unique budget accommodations with you.
Make sure you check out our guides “best hostels in“. Here we cover many more destinations.
Update: We now cover as well curated ‘3 best hostels’ guides to cities with no 5 Star Hostels such as Paris, Tokyo and Sydney.
Over to you
Do you have any questions left, maybe doubts? Then please leave it in the comment below. We are very keen to help you - and actually you would even do us a favor!
Your question will help us to improve this Iceland guide.
Last note: Our commitment
This is a genuine article to help you travel a bit smarter, and find the best place on a budget! We will never recommend you any place we haven’t evaluated or are not convinced by. We are constantly updating all our guides to keep them as fresh and accurate as possible.
Safe travels,
The Hostelgeeks
Have fun & Safe travels!
– – –
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Closed Hostels: 101 Hostel Reykjavik
Welcome to 101 Hostel Reykjavik a simple and bright hostel in the capital of Iceland.
Located on the main street: Laugavegur, visitors can choose from dorms, single and private rooms. This hostel perfect for travellers looking to explore the area. The iconic Hallgrimskirkja Church is 5 minutes walk and the public Sundhöllin Swimming Pool. Perfect choice if you are looking for cheap hostels in Reykjavik.
Good to know: Breakfast is not included!
CLOSED: Galaxy Pod Hostel
Update: This hostel has permanently closed. We’ve kept this content here for your information.
Galaxy Pod Hostel is exactly what you think – out of this world accommodation that seriously suits the alien landscape of Iceland.
Stay in your very own pod. Enjoy all necessities imaginable, plus the added luxury of a personal TV and headphones!
If you’re feeling sociable, head down to the lounge, moviedom and in-house bar.
Fun nightlife and great bars are just a 15-minute walk away.
