Best Guesthouses in Reykjavik

Best Guesthouses in Reykjavik

Iceland's capital offers an impressive selection of intimate guesthouses that provide character, warmth, and exceptional value—particularly important given that accommodation can consume 30-40% of your Iceland travel budget. These carefully selected properties deliver authentic Icelandic hospitality whilst keeping costs significantly below Reykjavik's luxury hotels, which typically charge 25,000-45,000 ISK (€170-310) per night.

Guesthouses represent the sweet spot of Reykjavik accommodation: more personal than hotels, more reliable than Airbnb, and crucially, more affordable than both. Expect to pay 12,000-22,000 ISK (€82-150) for quality guesthouse accommodation in central Reykjavik.

Prime Location Properties

Guesthouse Butterfly

This immaculately maintained property sits just 400 metres from Hallgrímskirkja church, placing you squarely in Reykjavik's cultural heart. Owner Guðrún Einarsdóttir has operated this nine-room guesthouse since 2003, developing an enviable reputation amongst repeat visitors. Rooms feature handcrafted Icelandic wool blankets and local artwork, whilst the communal breakfast area serves traditional skyr alongside imported Danish pastries.

The shared bathrooms are spotless (a crucial consideration when evaluating guesthouses), and each room includes individual heating controls—essential during Reykjavik's unpredictable weather. Rates range from 14,500-18,500 ISK (€99-126) depending on season, with substantial discounts for stays exceeding five nights.

Tower Guesthouse

Occupying a converted 1920s townhouse on Skólavörðustígur, Tower Guesthouse provides unmatched access to Reykjavik's shopping district. The Rainbow Street, famous for its vibrant painted road surface leading to Hallgrímskirkja, sits directly outside your door. This location advantage justifies slightly higher rates of 16,000-20,000 ISK (€109-136).

The property's eight rooms vary considerably—request rooms 3 or 6 for the best natural light and street views. Owner Björn Þórsson maintains an extensive collection of vintage Icelandic photography throughout the common areas, creating an atmospheric backdrop for evening relaxation.

Budget-Conscious Excellence

Reykjavik Backpackers

Don't let the name mislead you—whilst this establishment welcomes backpackers, it operates more like a boutique guesthouse. Located 650 metres from Perlan Museum, it occupies a prime position for accessing both city centre attractions and Reykjavik's excellent bus network.

Private double rooms cost just 11,500-14,000 ISK (€78-95), making this exceptional value for couples. The property includes a fully equipped kitchen, crucial for budget-conscious travellers given that restaurant meals average 4,500-6,500 ISK (€31-44) per person in Reykjavik.

The building dates from 1947 and retains original hardwood floors and high ceilings. Shared facilities are maintained to hotel standards, and the location provides easy walking access to Harpa Concert Hall (12 minutes) and the Old Harbour (8 minutes).

Guesthouse 101

This family-run property in Reykjavik's 101 postcode district delivers authentic local experience alongside practical comfort. The six-room guesthouse occupies a residential street 350 metres from Tjörnin pond, providing genuine neighbourhood atmosphere whilst maintaining central location benefits.

Hosts Sigrid and Einar Magnusson live on-site and provide unmatched local knowledge—particularly valuable for planning day trips to the Golden Circle or South Coast. Rooms include quality linens and blackout curtains (essential during summer's midnight sun), with rates of 13,000-16,500 ISK (€89-112).

Character Properties

The Reykjavik Edition

Housed within a restored 1930s building near the National Theatre, this eight-room guesthouse emphasises Icelandic design heritage. Each room features furniture crafted by local artisans using traditional techniques, creating an authentic aesthetic rarely found in standard accommodation.

The property's location on Hverfisgata places you amongst Reykjavik's best independent restaurants and cafés, whilst remaining just 280 metres from Laugavegur shopping street. Expect rates of 17,500-21,000 ISK (€119-143), justified by the superior room appointments and prime location.

Guesthouse Aurora

This converted residential property specialises in Northern Lights viewing, featuring a rooftop terrace specifically designed for aurora observation. Located 1.2 kilometres from central Reykjavik, it provides darker skies whilst maintaining city access via excellent bus connections (route 14 stops directly outside).

The five rooms vary in size and configuration, with Room 4 offering private balcony access for independent aurora watching. Rates of 14,000-17,500 ISK (€95-119) include Northern Lights wake-up calls during optimal viewing conditions (September-March).

Practical Considerations

Booking Strategy

Reykjavik guesthouse rates fluctuate dramatically by season. Summer months (June-August) command premium pricing, whilst shoulder seasons (April-May, September-October) offer 20-30% savings alongside fewer crowds. Winter bookings (November-March) provide the lowest rates but limited daylight hours.

Book directly with properties when possible—many guesthouses offer 5-10% discounts for direct reservations, avoiding booking platform commissions.

Transportation Access

Most recommended guesthouses sit within walking distance of FlyBus stops, providing direct airport connections for 2,500 ISK (€17). City buses cost 490 ISK (€3.35) per journey, though many guesthouse locations make walking the preferred option for central attractions.

These carefully selected guesthouses deliver authentic Reykjavik experience at accessible prices, providing the perfect base for exploring Iceland's remarkable capital whilst maintaining budget flexibility for the country's spectacular natural attractions.

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