Reykjavik is both the capital of Nordic country Iceland and it’s the largest city. With Keflavik International Airport less than an hour’s drive from the city center, it’s a popular destination for travelers. Known as one of the most expensive countries on earth, traditional accommodations like hotels and guesthouses can consume a travel budget quickly. Fortunately, Reykjavik hostels offer a comfortable and affordable alternative for travelers. 

The city is chock-full of cultural opportunities, from free walking tours to concerts at Harpa, Reykjavik’s opera house. There is no shortage of cafes, restaurants, and coffee shops selling both traditional and modern Icelandic fare within the city. Opportunities for visiting museums and shopping for Scandinavian souvenirs are abundant. The city’s charming Scandinavian architecture creates a picturesque atmosphere. Iceland’s landscapes are akin to that of a dream world and even the city, which sits on the oceanside depicts mountainscapes off in the distance. 

The country itself is a backpacker’s dream and the city is no different. Hostels offer amenities that make solo travel and backpacking enjoyable. For backpackers wanting to get out of the city but not stray too far visit The Golden Circle which is packed with waterfalls and otherworldly geothermal areas. 

KEX Hostel

Book on Hostelworld Book on Booking.com from $39 / 42-bed dorm 4.4/5 Map

**Prices are shown for weekdays in Mid-season (July)

Highlights of Your Stay:

  • An Instagram worthy library is located in-house.
  • The hostel is only a two-minute walk to a bus that takes you to the Blue Lagoon Spa.
  • It has a funky aesthetic that includes vintage items and original art.
  • Onsite there is a trendy bar with Icelandic beers on tap.

It’s located in the heart of the city so hopping across bars, shops, and cafes is as easy as stepping out the front door and wandering the surrounding streets. You can also grab a beer, coffee, or bite to eat in-house while communing with fellow travelers from across the world.

Book a private room or stay in dormitory-style lodging. All the basic amenities are included like hot showers and free WIFI. More unique amenities like bedside reading lights and bicycles for hire are also offered. The rooms are clean, quaint, and cozy, perfect for the type of traveler who plans to spend most of their travel time exploring the city.

Bus Hostel Reykjavik

Book on Hostelworld Book on Booking.com from $23 / 20-bed dorm 4.3/5 Map

**Prices are shown for weekdays in Mid-season (July)

What Makes it Unique:

  • The outdoor terrace is where travelers go to commune.
  • Buzz Bar is in the building offering ambiance and cold brews. 
  • It’s easy to get around with all the busses that come directly to the hostel.
  • It’s located not far from the iconic Hallgrimkirkja Church, a must-see for tourists.

If you are looking for a central landing spot to act as a home base that you can easily venture from then Bus Hostel Reykjavik has appeal. As demonstrated by its name, the hostel praises itself for its prime location because the bus stops just outside its door.

Catch the bus all the way to the airport or visit the hostel lobby to learn about trips out of the city. Hop on the SmartBus and get dropped in central Reykjavik. The hostel itself has a sleek minimalist aesthetic. Amenities that backpackers will appreciate include laundry facilities, luggage storage, and a tour desk. 

Reykjavik Downtown HI Hostel

Book on Hostelworld Book on Booking.com from $48 / 10-bed dorm 4.4/5 Map

**Prices are shown for weekdays in Mid-season (July)

What will make your stay memorable:

  • It’s an award-winning hostel that is praised by guests.
  • They are known for their service and location near the harbor.
  • Traditional Icelandic breakfast is available.
  • You can arrange tours outside of the city by consulting hostel staff in the lobby.

Reykjavik Downtown HI Hostel is one of the city’s top-rated hostels. It’s a clean, bright space that is located just around the corner from Reykjavik’s famous flea market, where you can buy hand-knit traditional Icelandic sweaters, Scandinavian baked goods, and more! Icelandic continental breakfast is complimentary as a part of your stay.

Each bunk in the dorm room comes with linens and individual lighting. Store your luggage in a secure locker and stow away valuables in the safe deposit box. Free WiFi and fax allow remote workers to get work done in the hostel’s common area. For those that enjoy a homecooked meal, there is a kitchen located behind the main building with all the needed cooking tools. 

Reykjavik Loft HI Hostel

Book on Hostelworld Book on Booking.com from $34 / 8-bed dorm 4.6/5 Map

**Prices are shown for weekdays in Mid-season (July)

Features to highlight:

  • Onsite events include drag shows, yoga, crafts, and more!
  • Their coveted terrace overlooks the city’s charm.
  • The fully equipped kitchen makes it easy to prepare healthy meals. 
  • They won Best Hostel award in 2015.

A bar with draft beers, work and reading space, and games galore- this hostel has a variety of perks, making it a destination that fits the needs of different types of travelers. The hostel’s terrace overlooks the quaint Scandinavian architecture of the city, as well as unique hipster graffiti that masks alleyway building walls.

A wheelchair-friendly accommodation inside the city, the hostel has its own elevator. Clean and thoughtfully decorated, guests are comfortable in common spaces and private rooms. This hostel is a place of inclusivity, where travelers go to feel at home while abroad.

Reykjavik City HI Hostel

Book on Hostelworld Book on Booking.com from $27 / 6-bed dorm 4.2/5 Map

**Prices are shown for weekdays in Mid-season (July)

Notable features of this hostel:

  • You can hop in their outdoor pool or grill on their BBQ.
  • The facilities are wheelchair accessible.
  • The location is out of the hustle and bustle of the city center.
  • There is a meeting room for people traveling on business and remote workers.

A unique location perfect for the backpacker is where this next hostel stands. Not in the heart of the city, but instead near the largest thermal pool and spa in Iceland, is where you’ll be staying. It’s a place to relax and wind down, perfect for an extended layover or end of the trip stay.

What makes it great for backpackers is that you can walk to the city center along the coastline in 30 minutes’ time or rent a bicycle for hire on-site to pedal your way along the scenic route. More spacious than most city hostels, you’ll get all the basics and then some, including substantial outdoor space. 

Galaxy Pod Hostel

Book on Hostelworld Book on Booking.com from $41 / 24-bed dorm 4.2/5 Map

**Prices are shown for weekdays in Mid-season (July)

What sets it apart: 

  • There is a free virtual reality room for all guests.
  • Communal gaming consoles can be used by all guests. 
  • Happy hour at the onsite bar serves Iceland’s iconic beer Gull.
  • It’s a futuristic, one-of-a-kind accommodation!

Looking for an untraditional kind of stay? Galaxy Pod Hostel offers unique accommodations, with their pod dormitories. Each pod is like its own miniature studio with a bed, tv, lighting, and even a mirror! It’s a tech-savvy lodgers dream stay. Both families and solo travelers will find themselves comfortable with a variety of games and entertainment offered by the hostel. 

Located in Laugardalur, family-friendly activities are within walking distance and include a zoo with native animals and a swimming pool. You’ll have everything you need to spend the bulk of your visit on-site if you are looking for some R&R, but be close enough to the city’s center to visit popular tourist sites in Reykjavik.


Icelandic culture is known for its “hygge” atmosphere, a Danish term translating to coziness and wellbeing. One way an emphasis on peaceful wellbeing is illustrated is in Iceland’s strong spa culture. World-class geothermal spas throughout the city and country are idyllic spots for travelers and locals alike. 

Reykjavik is an excellent place to start, end, or base travels in Iceland. Whether you have an extended layover or are unable to drive the entire Ring Road that loops around the country, you can still get an in-depth look into Icelandic culture by making Reykjavik your home base. Getting around the city can easily be achieved by bus or on foot. Tours both in and outside of the city are abundant and include activities like whale watching, chasing the northern lights, glacier walking, horseback riding, and more!