Traveling During the Peak Season
The most obvious time to visit Iceland is during the summer months when the weather is warm and the sun is out. Hotels tend to feel up more frequently during these months, but if you're flexible, you can generally make reservations a day or two ahead of time. If you're particular about where you stay, it is recommended you make reservations well in advance. Most hotels around the island are basic but comfortable. You'll find a few popular Icelandic chains that are generally reliable in quality. Fosshotels is one popular chain that is most often found near Iceland's most popular natural spots.
Alternatively, in the major cities you'll find Icelandair Hotels, which are upscale, Scandinavian styled hotels. There are also many locally owned hotels throughout the country and hostels, some of which belong to Hostelling International Iceland.
Preparing Ahead of Time
There are reasonably priced hostels throughout Iceland, 37 of which belong to Hostelling International Iceland. If you're going to spend more than a few nights at any of these hostels, it is worth it to purchase an international membership card which will give you a discounted price. Also carry your own bed linens or a sleeping bag and you will save even more money. Hostels are generally clean and reliable, and offer a good, affordable option.
An alternative to hostels is to camp. Camp grounds are available near most tourist destinations but they do vary in what they offer. Many include showers, electricity and cooking facilities, while others offer little more than a plot of land and a cold water tap. Do confirm what hookups are available before committing.
Beyond the Basics
Iceland offers some interesting and fun types of accommodation. In large cities you'll find hotels, hostels, and guesthouses that range in cost and quality. Once you're in the countryside your options will include not only hostels and guesthouses but also mountain huts or Icelandic farm holidays. Mountain huts are targeted specifically at trekkers and are usually either government or privately run. They can be anything from a dormitory style facility to fully staffed accommodation. It is usually necessary to make a reservation in advance, particularly during peak seasons.
Icelandic farm holidays are organized by an association that was founded in 1980. Farmers offer accommodation to travelers in the form of rooms in their homes, guesthouses, country hotels or cottages. The accommodation style can vary dramatically and range from rooms with private bathrooms to those that require a sleeping bag. There may also be recreational activities available including anything from horseback riding to fishing, hunting, sailing, swimming, or organized tours. It is necessary to make reservations well in advance during the summer months because the program is quite popular and tends to fill up.
Affordable lodging can be tricky to come by in Reykjavik. Fortunately, in recent years there seems to be an upswing in the number of hostels and cheap guesthouses around the city. There's also one campground nearby for guests that are on very tight budgets. If you're traveling with a family it can be particularly challenging to find a cheap place to stay as most of the facilities available are targeted at young backpackers. The hostels are generally clustered around the city center, although you may find a few on the outskirts of town. Most hostels offer both dorm rooms and private rooms, either for single travelers or those traveling as a couple.
While cheap accommodation in Reykjavik can be hard to come by, there is no shortage of expensive options. Many are quite nice and well located throughout the city. Some of the more popular and famous options include Radisson Blu 1919 Hotel, Hilton Nordica, and 101 Hotel.
Keflavik is located in Southwest Iceland and it is home to the country's international airport. It's a relatively small town with a decent number of places to stay given its small size. If you're arriving to the airport you'll find the town center about five kilometers away. Many people flying in or out of the country choose to stay a night in the town for convenience purposes. Alternatively you could head on to Reykjavik, which is about fifty kilometers away. The choice is really based on the time of your flight's arrival or departure. If you do choose to stay in Keflavik you'll find a few nice guesthouses around town. Some of the more popular options include Guesthouse 1x6, which is charming and well located in the cultural part of the city, Hotel Keflavik, which is clean and modern, and Flughotel, which is located near Hotel Keflavik. Some hotels offer free transportation either to or from the airport so inquire before making your reservation. There is little reason to stay in Keflavik unless it is to meet a flight. There are whale watching tours that leave from the harbor. These can be fun if you find yourself in town longer than you had expected. There are also some charming walking paths around town that are fun to explore. If you find yourself in the area in August you can enjoy the fun festival of lights which takes place every year. It's also possible to do a day trip to the famous Blue Lagoon.