10 BEST Hostels In Iceland: Updated 2019

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Oh Iceland, where do I start! You are the most beautiful country I’ve ever visited, and it’s going to take a lot to beat you. No one does raw natural beauty like you do. However, you do come with one downside, you’re expensive to visit. However, there is a way around this for my more money conscious travellers and those wanting to travel Iceland on a budget; hostels! As there are so many accommodation options, I’ve written an extensive list of the best hostels in Iceland, to make it just that little bit easier when choosing where to stay.

This guide covers all the best places to stay in Iceland. Whether you’re wanting great value, a place to meet other travellers, a couples hostel, a bit of luxury or some zen down time.

Iceland's Ring Road Itinerary

Top Tip: If you’re planning to travel to Iceland or anywhere. I can’t emphasise enough how important it is to have decent travel insurance – especially if you’re planning on doing adventure activities! I always use World Nomads on my travels and wouldn’t recommend anyone else for backpackers and long term travelers. 


Best Hostels In Iceland – Reykjavik

Kex Hostel

Best Hostels in Iceland: Kex Hostel

Kex Hostel gets my vote for overall best hostel in Iceland. Located in an old biscuit factory, it has all the amenities you need in a modern and rustic setting. The whole hostel itself is very edge, with vintage artwork portrayed around the whole place, floor-to-ceiling library and an outdoor heated patio area.

There’s also a wide choice of room options from private single rooms to 6 bed family rooms as well as 4-16 bed dorms to suit any traveller.

The location is hard to beat, situated right in the heart of Reykjavik you’re close to all amenities, sites, nightlife and buzzing cafes. There’s free WiFi all around the hostel, air transfers and late checkouts are all available here.

Hostelworld Score: 9.0/10.
Great For: Meeting others, location, suiting any budget traveller.
Price: $$.

Get the best deal on Kex Hostel here!

Reykjavík – Loft HI Hostel

Best Hostels in Iceland: Loft HI Hostel

Voted the best HI-Hostel in the world in 2014 and the best hostel in Iceland in 2015, it still lives up to these awards. Combining Scandi-chic and eco-credentials with a warm Icelandic welcome, you’ll feel very much at home here. This is one of the best hostels in Iceland for free events, they frequently have karaoke and pub crawls to yoga and drag shows, with a spot of arts and crafts thrown into the mix.

One of my favourite parts about this hostel is their rooftop terrace that has views across the whole of Reykjavik! They have a range of room types including privates and dorm rooms whether you’re a couple or solo travellers Loft HI Hostel is a great option.

Don’t feel like heading out? Their common room has board games, and a book exchange. If you’re after something more lively, check out their on-site bar. Happy hour’s from 4pm to 7pm daily. The bar and café have free Wi-Fi, as well as the rest of the hostel.

Their also run by a non-profit organisation, with their aim being to contribute towards an ethically conscious and sustainable style of travelling. LOVE IT!

Hostelworld Score: 9.3/10.
Great For: Parties, location, free events, sustainability.
Price: $$$.

Get the best deal on Loft HI Hostel here!

Galaxy Pod Hostel

Best Hostels in Iceland: Galaxy Pod Hostel

How epic is this space pod?! If you’re a person that loves their privacy when sleeping and just needs a bit of down time when exploring Iceland, this is the one of the best hostels in Iceland. Located right in downtown Reykjavik, you’re also right in the centre of the city, meaning you can walk to all the top attractions!

Galaxy Pod Hostel has two couples rooms with king-size bunk beds in each. They also have two 10 person rooms and one 12 person room, which are great for groups and meeting others. Kids under 12 years old can share a bed with a parent free of charge. They also have a female only room for 6.

This is the perfect option for backpackers, couples, families and groups who want more for less! Each pod has a comfortable mattress with a memory foam mattress on top and the bed is made upon your arrival. All pods have a security box, mirror, fans, power plug, various light settings, comfortable pillows and duvets, a shelf, hangers, alarm clock and free WiFi.

Hostelworld Score: 9.0/10.
Great For: Privacy, location, families, a unique experience.
Price: $$.

Get the best deal on Galaxy Pod Hostel here!

Hlemmur Square

Best Hostels in Iceland: Hlemmur Square Hostel

The best hostel if you’re wanting a slice of luxury for a budget price. This is a hotel and hostel in one – ideal if you can’t choose between the two! The hostel is on the third and fourth floors, while on the first floor you’ll find a bar and a restaurant with budget-friendly meals. Hang out and meet other travellers in one of our two colourful lounges, complete with pool tables.

The modern cathedral Hallgrímskirkja is a 9-minute walk away, and the unique Icelandic Phallological Museum is just across the road. Great location for all the sites!

Choose between 6-14 bed dorms, or if you’re wanting more privacy there are private rooms. There’s a 24-hour reception, a free city map for exploring, and also free WiFi.

Hostelworld Score: 8.6/10.
Great For: Private rooms, location, budget.
Price: $.

Get the best deal on Hlemmur Square here!

Best Hostels In Iceland – Keflavik Airport

Base Hostel

Best Hostels in Iceland: Base Hostel

Have a flight that leaves early the next morning? Or you’ve arrived late into Iceland? Base Hostel is a great budget option, right by the airport. It’s also an excellent base for travellers looking to explore the hidden gems of the Reykjanes Peninsula such as The Reykjanes Geothermal Park, The Blue Lagoon (17km), Gunnuhver hot spring and the many caves and exotic landscape surrounding the area.

There are 121 rooms and dorms in total, and free WIFI in every room. The 24 hr reception and bar is very spacious, and great for meeting new travellers. There’s also a well equipped community kitchen, laundry area and brand new bathroom facilities. There’s also breakfast available at 12EUR per person.

As well as being located near the airport, it’s also a great budget option for those money conscious travellers.

Hostelworld Score: 8.2/10.
Great For: Close to the airport, budget, large room choices.
Price: $.

Get the best deal on Base Hostel here!

Best Hostels In Iceland – Snæfellsnes Peninsula

Grundarfjördur Hostel

Best Hostels in Iceland: grundarfjörður Hostel

Many travellers believe once you leave Reykjavik, hostels are non-existent, this is far from true! There are hostels all throughout Iceland! Grundarfjördur hostel is the perfect base for exploring the peninsula, especially Kirkjufellsfoss. Offering magnificent mountain or sea views from most of the individually decorated rooms and apartments. They provide free Wi-Fi access and free parking on site.

All guests staying have access to a common living room with TV and a fully equipped kitchen, while each private apartment has its own private kitchen and seating area with TV.

Hostelworld Score: 9.4/10.
Great For: Budget, families, couples and exploring the peninsula.
Price: $$$.

Get the best deal on Grundarfjördur Hostel here!

Best Hostels In Iceland – Akureyri

Hafnarstræti Hostel

Best Hostels in Iceland: Hafnarstræti Hostel

Missed out on the Galaxy Pod Hostel or loved it so much you want to experience the same type of hostel living? Well you’re in luck, as there’s another pod style hostel in Akureyri! Having opened in late 2017, it’s brand spanking new with all the latest and most modern technology.

They are located in the town centre within walking distance to a number of restaurants, coffee houses and shops. In addition, near to the hostel you can find some of the finest landmarks and attractions of the city such as Botanical Garden, Davíds Stefánsson Memorial Museum and Sigurhaedir Museum, amongst other interesting spots of the city.

There are a number of different accommodation options, all of them shared and fully equipped with all the services and amenities needed. Included is: free Wi-Fi, breakfast, bed lines and towels.

Hostelworld Score: 9.8/10.
Great For: Privacy, location, unique experience hostel.
Price: $$.

Get the best deal on Hafnarstræti Hostel here!

Akureyri Backpackers

Best Hostels in Iceland: Akureyri Backpackers

A great place to meet other travellers, this is the liveliest hostel in the North! This hostel is conveniently located in the town centre near a lot of coffee shops, bars, and restaurants. The friendly staff and convenient location of this hostel makes it one of the best hostels in Iceland.

There are a number of accommodation options from a private twin room to 4-8 bed mixed dorms. This is also one of the best priced hostels in Akureyri.

Facilities include: lockers, free WiFi, 24 hour reception, laundry facilities and an outdoor terrace.

Hostelworld Score: 9.2/10.
Great For: Location, meeting other travellers, budget.
Price: $.

Get the best deal on Akureyri Backpackers here!

Best Hostels In Iceland – Seydisfjordur

Hafaldan HI Hostel – Old Hospital

Best Hostels in Iceland: Seydisfjordur

Seydisfjordur is a gorgeous little village nestled amongst the mountains. It’s famous for it’s multicoloured path leading up to its church. Read my 10 Day Ultimate Road Trip Itinerary.

Hafaldan Old Hospital is located in the towns centre in the historic former hospital building. The building has been under constant renovation for the last years and is without a doubt one of Icelands most charming hostels with beautiful interior design. The newest pride is the little basements ‘SPA’ where guests can enjoy a sauna & relax after a busy day of sightseeing. The hostel offers variety of different rooms both with private and shared bathroom.

There is one 6 bed dorm and the rest are private rooms, perfect for couples or families. Free wifi, parking, luggage storage and laundry facilities are all on site.

Hostelworld Score: 9.4/10.
Great For: Location, couples, spa facilities.
Price: $$.

Get the best deal on Hafaldan HI Hostel here!

Best Hostels In Iceland – Golden Circle

Héradsskólinn Guesthouse

Best Hostels In Iceland: Héradsskólinn Guesthouse

Located within the famous Golden Circle, perfect for those wanting to explore the impressive natural wonders along this trail. Héradsskólinn Historic Guesthouse overlooks Lake Laugarvatn, Hekla Volcano and the Eyjafjallajökull Glacier.

There are a number of rooms options ranging from a 14 bed mixed dorm, to a standard 6 bed family private room. Making this place perfect for families, couples and backpackers alike.

Thingvellir National Park and the famous Geysir Hot Spring are within 16 mi. Gullfoss Waterfall is 24 mi away. Laugarvatn Geothermal Bath is right next to the guest house.

Hostelworld Score: 9.8/10.
Great For: Golden Circle, all travellers, luxury.
Price: $$.

Get the best deal on Héradsskólinn Guesthouse here!


There are plenty of affordable options when it comes to accommodation in Iceland. This list shows you the best hostels in Iceland, from Reykjavik to the Golden Circle all the way to the north in Akureyri. There are plenty to choose from, however if you’re wanting the best overall hostel in my opinion it has to be Kex Hostel in Reykjavik.

Have you been to Iceland before? Where did you stay? Having read this post on the best hostels in Iceland, which is your favourite hostel? I’d love to know!

Looking to hire a campervan? Read my CampEasy Iceland Review or head to their website: CampEasy!

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The Best Hostels In Iceland: For Any Traveller

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By | 2019-12-13T14:50:21+00:00 December 13th, 2019|Iceland|0 Comments

About the Author:

Hey there I'm Emma! A luxury and adventure travel blogger. I've currently travelled to 53 countries with no plans to stop! I hope I can inspire you to travel the world with my travel guides, travel and blogging tips, as I believe travel is for everyone. So come and travel well for less with me!

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