The Best Cheap Hotels in Iceland

Budget-Friendly and Affordable Places to Stay in Iceland

Godafoss Waterfall Godafoss Waterfall

Iceland is a vibrant destination with plenty of fun activities and attractions. If you're traveling on a budget, finding an affordable place to stay might be a challenge, though. But does Iceland have cheap hotel rooms? Absolutely. With so many budget-friendly hotels and motels available, there is no need to break the bank for a comfortable and relaxing stay here. So, if you're looking for where to stay on a budget, or trying to figure out how to find cheap rooms in Iceland, we've figured it out for you already. When looking for affordable places to stay, everyone should consider a variety of factors, including the price, but also the location, amenities, level of service, and guest ratings. While low prices are important, travelers should also consider the comfort and relaxation of the rooms, as well as the location of the hotel, which can greatly impact their experience in Iceland. Some of the best budget-friendly hotels in Iceland offer amenities such as pools, providing guests with a great place to cool off and unwind after a long day of exploring the city. When considering guest ratings, travelers should look for hotels with a proven track record of providing comfortable stays, while also being easy on the wallet. We've analyzed the best budget-friendly hotels and motels in Iceland based not just on the prices, but also the locations, guest ratings, amenities, and nearby activities as described. So, below you'll see the results of our research, which includes the best values and great bargain hotels in Iceland. Whether you're traveling solo or with a group, there are plenty of cheap stays available in Iceland that will meet your needs and your budget. So, let's get to it: here's where to sleep cheap in Iceland.

(Prices are listed in U.S. Dollars.)

Icelandair Hotel Hamar

Borgarnes, Iceland
3-star Hotel with prices starting at $136 (before taxes) - See All Prices
One of the Best Inexpensive Hotels in Iceland
  • Great Value: the price is lower than average for 3-star hotels.
  • High Quality: guest ratings are higher than average.
  • Family-Friendly

Located at Golf Course, Icelandair Hotel Hamar has great rooms from $136 (before taxes). It offers room service, a restaurant, a bar, hiking, and mountain views. It has a terrific 8.80 rating out of 10 from previous guests who have stayed here. Only a short distance from the city center, budget travelers will especially love child care, laundry services, golf, a free breakfast, and a hot tub at this affordable hotel. That hot tub is terrific after a long day of sightseeing. The price of this hotel is less than average for budget hotels, which makes it a great value.

Budget Hotel Amenities
  • Free breakfast
  • Free parking
  • Laundry facilities
  • Budget
More Great Amenities
  • Restaurant
  • Bar/Lounge
  • Laundry service
  • Hot tub
  • Family rooms
  • Air-conditioned
  • Playground
  • Family-Friendly


Country Hotel Heydalur

Sudavik, Iceland
3-star Hotel with prices starting at $108 (before taxes) - See All Prices
A Great Low Cost Hotel
  • Great Value: the price is lower than average for 3-star hotels.
  • High Quality: guest ratings are higher than average.

A great place to stay is Country Hotel Heydalur which has nice rooms starting at $108. Offering room service, a restaurant, a bar, hiking, and laundry services, it also has a great guest rating of 8.90 out of 10 from many previous guests. It's located at Heydalur. This relaxing hotel is also nice because it offers a hot tub, an indoor pool, free parking, kids meals, and horse riding which visitors will enjoy. Also, it's just a short drive from the city center. The indoor pool at this hotel is very nice, and is a great place to unwind and relax on your trip. It's also less than the average price for budget hotels, so it's a great value.

Budget Hotel Amenities
  • Indoor pool
  • Free parking
  • Laundry facilities
  • Budget
More Great Amenities
  • Restaurant
  • Bar/Lounge
  • Laundry service
  • Hot tub
  • Family rooms
  • Playground


CenterHotel Thingholt

Reykjavik, Iceland
4-star Hotel with prices starting at $163 (before taxes) - See All Prices
A Very Affordable Hotel
  • Great Value: the price is lower than average for budget hotels.
  • Family-Friendly

We found CenterHotel Thingholt to be a great place to stay, and the price starts at $163. We loved that is has room service, a restaurant, a fitness center, a bar, and breakfast, and it also has a terrific guest rating of 8.50 out of 10 from previous guests. It's located at Thingholtsstraeti 3-5. You'll also find laundry services, a free breakfast, a hot tub, a spa and wellness center, and a spa which travelers will love. And this comfortable hotel is just a quick trip from the center of town. The restaurant serves delicious food, too. It's a great value, too, because it's less than the average price for budget hotels.

Budget Hotel Amenities
  • Free breakfast
  • Laundry facilities
  • Budget
More Great Amenities
  • Restaurant
  • Fitness center
  • Bar/Lounge
  • Breakfast included
  • Laundry service
  • Hot tub
  • Bicycle rental
  • Air-conditioned
  • Airport shuttle
  • Family-Friendly


Apotek Hotel Reykjavik by Keahotels

Reykjavik, Iceland
4-star Hotel with prices starting at $125 (before taxes) - See All Prices
A Terrific Cheap Hotel
  • Great Value: the price is lower than average for 4-star hotels.
  • High Quality: guest ratings are higher than average.
  • Family-Friendly

With terrific rooms from $125, Apotek Hotel Reykjavik by Keahotels, at Austurstraeti 16 provides room service, a restaurant, a fitness center, a bar, and parking. Its terrific guest rating is 9.10 out of 10 from previous guests staying here. Budget travelers will really like this budget-friendly hotel which also offers child care, laundry services, city views, laundry facilities, and bicycle rental. It's located just a short distance from the city center, too. You'll enjoy relaxing while having room service delivered. It's a great value, as the price is less than the average for budget hotels.

Budget Hotel Amenities
  • Parking
  • Laundry facilities
  • Budget
More Great Amenities
  • Restaurant
  • Fitness center
  • Bar/Lounge
  • Laundry service
  • Bicycle rental
  • Airport shuttle
  • Family-Friendly


CenterHotel Arnarhvoll

Reykjavik, Iceland
4-star Hotel with prices starting at $145 (before taxes) - See All Prices
A Nice Budget Stay
  • Great Value: the price is lower than average for 4-star hotels.
  • Family-Friendly

CenterHotel Arnarhvoll has a great guest rating of 8.20 out of 10, and offers room service, a restaurant, a bar, breakfast, and laundry services. The great rooms here start at $145 before taxes and depending on the season. It can be found at Ingolfsstraeti 1. Furthermore, it also offers a free breakfast, a hot tub, a spa and wellness center, a spa, and laundry facilities, which is nice for visitors. Just a short drive from the city center, this low-cost hotel is a terrific choice. We found the price of this hotel to be a great value because the price is less than average for budget hotels.

Budget Hotel Amenities
  • Free breakfast
  • Laundry facilities
  • Budget
More Great Amenities
  • Restaurant
  • Bar/Lounge
  • Breakfast included
  • Laundry service
  • Hot tub
  • Air-conditioned
  • Family-Friendly


Hotel Borg by Keahotels

Reykjavik, Iceland
4-star Hotel with prices starting at $158 (before taxes) - See All Prices
One of the Best Deals in Iceland
  • Great Value: the price is lower than average for 4-star hotels.
  • Family-Friendly

The great guest rating of Hotel Borg by Keahotels is 8.70 out of 10. This place has room service, a restaurant, a fitness center, a bar, and parking. Prices for the terrific rooms are from $158, and it's located at Posthusstraeti 11. We also love the child care, laundry services, a hot tub, a spa and wellness center, and a spa which are great for travelers. And since it's just a quick trip from the center of the town, the location is great, too. The price of this hotel is less than average for budget hotels, which makes it a great value.

Budget Hotel Amenities
  • Parking
  • Laundry facilities
  • Budget
More Great Amenities
  • Restaurant
  • Fitness center
  • Bar/Lounge
  • Laundry service
  • Hot tub
  • Bicycle rental
  • Family-Friendly


City Center Hotel Reykjavik

Reykjavik, Iceland
3-star Hotel with prices starting at $99 (before taxes) - See All Prices
A Fantastic Bargain in Iceland
  • Great Value: the price is lower than average for 3-star hotels.
  • High Quality: guest ratings are higher than average.

A cool place is City Center Hotel Reykjavik because it has great rooms that start at $99. It has room service, a restaurant, a bar, parking, and laundry services, it also earned a great guest rating of 8.80 out of 10 from people who have stayed here before. It's found at Austurstraeti 6. Only a short distance from the city center, budget travelers will especially love city views, laundry facilities, a tour desk, a multi-lingual staff, and a coffee shop at this affordable hotel. It's also less than the average price for budget hotels, so it's a great value.

Budget Hotel Amenities
  • Parking
  • Laundry facilities
  • Budget
More Great Amenities
  • Restaurant
  • Bar/Lounge
  • Laundry service


Icelandair Hotel Reykjavik Natura

Reykjavik, Iceland
4-star Hotel with prices starting at $178 (before taxes) - See All Prices
Among the Best Values in Iceland
  • Family-Friendly

Icelandair Hotel Reykjavik Natura offers room service, a restaurant, a fitness center, a bar, and a kid-friendly buffet which we really like. The terrific rooms here start at $178 (before taxes). It's located at Nautholsvegur 52 and has earned a guest rating of 8.30/10. This relaxing hotel is also nice because it offers hiking, laundry services, a hot tub, a spa and wellness center, and a spa which visitors will enjoy. Also, it's just a short drive from the city center.

Budget Hotel Amenities
  • Free parking
  • Laundry facilities
  • Budget
More Great Amenities
  • Restaurant
  • Fitness center
  • Bar/Lounge
  • Kid-friendly buffet
  • Laundry service
  • Hot tub
  • Bicycle rental
  • Family rooms
  • Refrigerator
  • Family-Friendly


Park Inn by Radisson Reykjavik Keflavik Airport

Keflavik, Iceland
4-star Hotel with prices starting at $131 (before taxes) - See All Prices
One of the Best Inexpensive Hotels in Iceland
  • Great Value: the price is lower than average for 4-star hotels.
  • Family-Friendly

Located at Hafnargata 57, Park Inn by Radisson Reykjavik Keflavik Airport has great rooms from $131 (before taxes). It offers room service, a restaurant, a bar, hiking, and mountain views. It has a terrific 8.50 rating out of 10 from previous guests who have stayed here. You'll also find laundry services, golf, city views, free parking, and kids meals which travelers will love. And this comfortable hotel is just a quick trip from the center of town. It's a great value, as the price is less than the average for budget hotels.

Budget Hotel Amenities
  • Free parking
  • Laundry facilities
  • Budget
More Great Amenities
  • Restaurant
  • Bar/Lounge
  • Laundry service
  • Family rooms
  • Air-conditioned
  • Refrigerator
  • Airport shuttle
  • Family-Friendly


Dalakot Budardal

Budardalur, Iceland
Guest House with prices starting at $100 (before taxes) - See All Prices
A Great Low Cost Hotel
  • Great Value: the price is lower than average for 2-star hotels.

A great place to stay is Dalakot Budardal which has nice rooms starting at $100. Offering a restaurant, a bar, breakfast, hiking, and rooms with kitchens, it also has a great guest rating of 8.60 out of 10 from many previous guests. It's located at Dalbraut 2. Budget travelers will really like this budget-friendly hotel which also offers a free breakfast, free parking, a coffee shop, and a refrigerator. It's located just a short distance from the city center, too. Don't forget that there's a kitchen in the room to cook your meals, too. We found the price of this hotel to be a great value because the price is less than average for budget hotels.

Budget Hotel Amenities
  • Free breakfast
  • Free parking
  • Budget
More Great Amenities
  • Restaurant
  • Bar/Lounge
  • Breakfast included
  • Kitchen
  • Refrigerator


For more terrific hotel ideas in Iceland, make sure you also see Best Family-Friendly Hotels in Iceland, Best Luxury Hotels in Iceland, Best Pet-Friendly Hotels in Iceland, Best Hotels for First Time Visitors in Iceland, Best Hotels for a Weekend Getaway in Iceland, Best Hotels for One Week in Iceland, Best Hotels for One Night in Iceland, Best Romantic Hotels for Couples in Iceland, Best Hotels for Scuba Diving in Iceland, Best Hotels for Skiing in Iceland, or Best Business Hotels in Iceland.


Is it expensive to spend the night in Iceland?

Iceland Average Budget Hotel Price
$173

Travelers to Iceland will have a large number of terrific budget accommodation options with a variety of great prices. The price of budget hotels here can vary by amenities, dates, and the neighborhood. Based on thorough data from 42 budget hotels, their average price is a very reasonable $173. If you're interested in more information about hotels here, see our guide to hotel prices in Iceland.

The average prices of our suggested budget hotels by star rating:

  • 5-star hotels: $818
  • 4-star hotels: $163
  • 3-star hotels: $164
  • 2-star hotels: $135


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