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Iceland Travel Guide: Where to Stay, What to Eat, and More

Iceland feels so far removed from the rest of Europe, and from our concepts of what the “ideal European vacation” looks like. But if you’re not seeking the stereotypical “ideal European vacation,” Iceland may be the destination you’ve been looking for.

Where is Iceland, and what can you do there? We’re about to answer your questions, and we’re about to show you the best of what Iceland has to offer.

The Goðafoss waterfall in Iceland's Diamond Circle.
David Mark

Why Go to Iceland?

The waterfall at Seljalandsfoss, Suðurland, Iceland.
Diego Delso

Located near the Arctic Circle, about 2,612 miles northeast of New York City, about 1,173 miles northwest of London, and about 1,084 miles west of Oslo, Norway, Iceland feels quite isolated in the North Atlantic and far removed from the European mainland. As a result, Iceland’s natural landscape looks very exotic in a uniquely Scandinavian way. Its culture is also quite Scandinavian, and the Icelandic language most closely resembles Norwegian and the Faroese language that developed in Denmark’s Faroe Islands. Though Iceland is cold throughout the year, the climate is milder than you’d typically expect for a country near the Arctic Circle, so while you will want to pack some cold-weather clothes for your trip, but don’t worry too much about it.

Reykjavík is Iceland’s capital, and it’s the place more than 65% of Iceland’s population call home. This is where you’ll find the bulk of Iceland’s urban amenities along with the country’s finest hotels. The North of Iceland has the country’s longest fjord and the remarkably beautiful Diamond Circle, full of prime opportunities to explore Scandinavia’s most spectacular natural wonders. To the south, you can see for yourself why Iceland is a global leader in renewable energy, you can experience the otherworldly hot waters of the famed Blue Lagoon geothermal spa, and you can lay your eyes on Europe’s finest (and coldest) black sand beaches.

Where to Stay

For such a small island nation, Iceland has a remarkably wide variety of accommodations to choose from. You can “rough it” in a cozy inn or hostel where you can really soak up the local culture. You can stay at an ecotourist lodge that’s mere steps away from some of the world’s finest natural wonders. Or if you want the ultimate best of the best, you can try a very uniquely scenic lap of luxury at one of Iceland’s iconic five-star resorts. Here are our picks for Iceland’s best hotels.

Best Location: Fosshotel

A room at the Fosshotel Reykjavík.
Fosshotel Reykjavík

As Iceland’s largest hotel in Iceland’s largest city, the Fosshotel Reykjavík places you in the heart of the action with plenty of amenities to keep you happy. Since it’s located downtown, you’re steps away from Reykjavík’s best restaurants and shops as well as multiple museums and the harbor. All rooms have free Wi-Fi internet and satellite TV, and rooms and suites on the higher floors feature great city and ocean views. You can feel even better about staying here since Fosshotel is a member of Festa — Icelandic center for corporate social responsibility and Nordic Swan Ecolabel.

  • Nearest Airport: Keflavík Airport
  • Time: 40-50 minutes by car
  • Distance: 48 kilometers (or 30 miles)

Best Style: Hotel Reykjavik Centrum

The exterior of the Hotel Reykjavík Centrum.
Hotel Reykjavík Centrum

Hotel Reykjavik Centrum is located on Aðalstræti, one of Reykjavík’s oldest streets. The oldest part of this hotel was built in 1764, and newer buildings have been built in the likeness of their historic predecessors, Fjalakötturinn and Uppsalir. As a result, this hotel looks and feels like an homage to Iceland’s rich history, yet it also includes all the amenities you want, including free Wi-Fi and fully equipped bathrooms. Like Fosshotel, Hotel Reykjavik Centrum is an Íslandshótel property, so it’s committed to environmental and social responsibility.

  • Nearest Airport: Keflavík Airport
  • Time: 40-50 minutes by car
  • Distance: 50 kilometers (or 31 miles)

Best Value: Lighthouse Inn

A bed and a close-up of a potted flower in a room at the Lighthouse Inn hotel in Southwest Iceland.
Lighthouse Inn

If you’re looking for charm and character, it’s hard to beat the Lighthouse Inn in the town of Garður. It’s conveniently close to Iceland’s international airport, yet it feels like a charmingly woodsy log cabin retreat. It’s walking distance from the Garður Old Lighthouse — one of Iceland’s oldest lighthouses and a great spot to admire the ocean and the Northern Lights — and it’s a nicely situated launchpad for exploring both the southern coast and Reykjavík. The rooms here aren’t super large or elaborate, but they’re well designed with everything you need (including Wi-Fi internet) and lovely views of the ocean and/or gardens outside.

  • Nearest Airport: Keflavík Airport
  • Time: 10-15 minutes by car
  • Distance: 11 kilometers (or seven miles)

Best Luxury: The Retreat at Blue Lagoon

A hotel room at The Retreat at Blue Lagoon in Southwest Iceland.
Blue Lagoon

If you want to be pampered and spoiled amidst a remarkably scenic backdrop of lava fields and hot springs, then this is the hotel you want. The Retreat at Blue Lagoon is located in the heart of one of Iceland’s top attractions, and you will have full access to the world-famous Blue Lagoon, the Retreat Spa, daily à la carte breakfast, nightly turndown service, Blue Lagoon skincare and toiletries, and full concierge service. All suites feature fantastic views of the moss-covered lava fields and/or the hot springs, and they’re stylishly appointed with all the creature comforts you desire. While the Blue Lagoon resort complex offers plenty of amenities — including a casual cafe and three full-service restaurants – it also offers fairly easy access to Reykjavík and Iceland’s south coast.

  • Nearest Airport: Keflavík Airport
  • Time: 20-25 minutes by car
  • Distance: 22 kilometers (or 14 miles)

What to Eat

Iceland’s native cuisine is very Scandinavian, so expect plenty of meat and seafood. But if you’re vegetarian or vegan, fear not, as a growing number of restaurants are adding plant-based options to their respective menus. While some restaurants tend to stick to very traditional dishes, others are very innovative, and you’re bound to find plenty of farm-fresh offerings throughout the island.

Price Key

“$” = budget-friendly or cheap
“$$”= average
“$$$”= expensive

Restaurant Röstin

Plokkfiskur on uneven bowl on a table.
Restaurant Röstin

If you’re staying at the Lighthouse Inn, or if you’re simply exploring the southwest corner of the island, Restaurant Röstin is worth a stop. Located on the second floor of the Heritage and Maritime Museum of Garðskagi, Restaurant Röstin has a fun mix of traditional Icelandic dishes and an American-friendly selection of burgers and steaks. Carnivores and vegans alike should find tasty options on the menu, and everyone can enjoy the lovely views of the beach and the ocean below.

  • Best for Lunch and Dinner 
  • $$

Browse the Menu

Gamli Baukur

Skewered shrimps, toasted bread, and pasta with greens on a plate at Gamli Baukur restaurant in Húsavík, Iceland.
Gamli Baukur

If you’re spending the day exploring the Diamond Circle on the north side of the island, you may want to stop in the town of Húsavík and give Gamli Baukur a try. All ingredients are sourced fresh from local suppliers, and the vibe comes across as very maritime. If you like seafood and pasta, try the seafood tagliatelle, and you’ll thank us later. There’s plenty more seafood throughout the menu, as well as a few vegan options and lamb and beef.

  • Best for Lunch and Dinner 
  • $$

Browse the Menu

Old Iceland

An Icelandic dish on a plate with cutlery, bottle of liquor, and leaf stalk at Old Iceland Restaurant in Reykjavík, Iceland.
Old Iceland Restaurant

Old Iceland sounds like it’s been around for a long time, but it was actually established in Reykjavík in 2014 by three brothers who continue to own and operate the restaurant today. As they explain, “The focus has always been on highlighting Icelandic produce. We use herbs and spices from the mountains of Iceland and incorporate them into our dishes.” As a result, you will find a wide array of the freshest Icelandic seafood, beef, and lamb sourced from local farms, and a surprising amount of locally grown fruit and vegetables. Come for the interesting drinks menu, and stay for some of the best fish you’ve ever had.

  • Best for Lunch and Dinner 
  • $$

Browse the Menu

Café Babalú

A bowl of Tomato soup and a grilled cheese sandwich displayed on Café Babalú's menu.
Café Babalú

If you’re up (relatively) early and you’re ready for coffee and breakfast, head on down to Café Babalú in central Reykjavík for some great grub and brews. If you’re missing your favorite French or Italian style coffee drinks, or if you prefer vegan-friendly plant-based milks, Café Babalú has you covered. While you’re here, take in the very unique atmosphere: It looks like a very boho-chic American indie coffee house, but with a fun Scandinavian twist. The menu is pretty simple with a selection of crepes, soups, and grilled cheese sandwiches, but you’ll likely enjoy your early meal here nonetheless.

  • Best for Breakfast and Lunch
  • $

Browse the Menu

Sümac

An overhead shot of condiments and dishes on a table.
Sümac

If you’re ready to try something different for dinner in Reykjavík, try Sümac. They use the freshest Icelandic ingredients — such as locally grown beets and endives, locally raised beef, and locally sourced wolf-fish — and they use these fresh ingredients craft the most delectable North African and Middle Eastern cuisine you’ll taste this close to the Arctic Circle. Sümac’s grub is so good that it’s been featured in the Michelin Guide, and the menu is largely tapas style that makes for easy tasting and sharing. They’re open for dinner Tuesday through Saturday.

  • Best for Dinner
  • $$$

Browse the Menu

Moss Restaurant at Blue Lagoon

An Icelandic dish on a plate at Moss Restaurant at Blue Lagoon.
Moss Restaurant at Blue Lagoon

If you want a fancy dinner out with all the bells and whistles, it’s hard to think of a better place in Iceland than Moss Restaurant at Blue Lagoon. Whether you’re staying at one of Blue Lagoon’s hotels (see above) or doing a day trip to explore the southern coast, you’re advised to stop here if you’re seeking food so good that it landed in the Michelin Guide. It’s open for dinner Wednesday through Sunday, and the menu changes every season. Depending on when you make it here, you might encounter a filet of lamb resting on lava stone, or perhaps clams resting on their shells that rest atop a bed of fresh herbs. Whenever you make it here, try the tasting menu, and you’re guaranteed to receive the most visually stunning food that also happens to taste great. This is one of the most expensive restaurants in Iceland, but if you’re up for a very fancy meal, Moss Restaurant is most definitely worth it.

  • Best for Dinner
  • $$$

Browse the Menu

What to Do

If you like the great outdoors, you will love Iceland. As soon as you begin to drive Iceland’s famed Ring Road, you will reach some of Europe’s most remarkable natural landmarks. Yet even if you seek more urban amenities, Reykjavík packs a lot of big-city culture into a small space, Keflavík is basically the default urban hub for Southwest Iceland, and Akureyri is the largest city of the North.

Reykjavík

An aerial view of Reykjavik, Iceland, during the summer season.
Next Voyage

As Iceland’s capital city, Reykjavík has plenty for you to see and do. If you want to learn more about Iceland’s role in advancing democracy, head to the Alþingi, which is Iceland’s national parliament and a key part of Iceland’s governance since c. 930. If you want to see where it all began, head to Þingvellir National Park (about 30 miles east of Reykjavík). If you want to see some democracy in action, the Alþingi has operated at its current location in Reykjavík since 1881, and many of its functions are open to the public. For more uniquely Reykjavík experiences, check out: Hallgrímskirkja, which is Iceland’s tallest cathedral and a very striking local landmark; The Culture House, where you will find an extensive collection of medieval manuscripts, including many of the oldest copies of the Icelandic Sagas; and Ægisgarður, where you will find multiple companies offering whale-watching boat tours.

Learn More

Vatnajökull National Park

A glacier at Vatnajökull National Park in Iceland.
Decokon

Established in 2008, Vatnajökull National Park encompasses all of Europe’s largest glacier: Vatnajökull. Vatnajökull National Park offers a stunning combination of hot and cold thanks to the glacier-covered Öræfajökull volcano, as well as the volcanic ash and jökulhlaups (or glacial floods) that make Iceland’s world-famous black sand beaches. Come for the glaciers, and stay for the volcanoes, the meadows and glacial lagoons, and Dettifoss — Europe’s most powerful waterfall.

Learn More

Húsavík and the Diamond Circle

The Goðafoss waterfall in Iceland's Diamond Circle.
Johanna Marthens

Húsavík is a small town that essentially anchors North Iceland’s Diamond Circle. In addition to Dettifoss in Vatnajökull National Park, the Diamond Circle has the picturesque Goðafoss waterfall, the ethereal blue and green landscapes of Lake Mývatn, the wondrously verdant canyon of Ásbyrgi, the cold desert and scenic hot springs of Námafjall, and the breathtaking black sand beaches and fjord views at Fjallahöfn Beach. In town, Húsavík probably offers the best whale-watching opportunities in the entire country, as well as puffins who love to hang out in the area.

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Blue Lagoon

A boardwalk leading to the water at Blue Lagoon in Iceland.
Roderick Eime

Whether you’re staying in one of the hotels or looking for places to explore in Southwest Iceland, Blue Lagoon is a place you simply have to see and feel for yourself. The warm waters are rich in minerals like silica and sulfur, so Blue Lagoon has developed a reputation as a prime health spa destination. You will need to book your visit in advance, and day pass packages start at 65 dollars. You’ll pay a lot more if you want full spa access, but even one of the basic day passes will allow you to wade into the unique geothermal waters that make for perhaps the most surreal swimming and bathing experience on earth. If you want to stay longer, you can book a room or suite at the Silica Hotel or The Retreat (see above) for the ultimate geothermal-powered vacation.

Learn More

How to Save Money on Your Trip

Shopping and Experiences

If you forgot to pack toiletries before you left, or if you want to grab some alcoholic libations to stock in your hotel room, Keflavík International Airport has a duty-free store where you can find plenty of essentials (and plenty of additional items you might want). Not only do they have a wider selection than similar convenience stores and supermarkets in Reykjavík, but they also tend to have much lower prices. If you’re also looking to save on tours, event tickets, and much more, check Kayak first.

Hotels

Since Iceland has fewer mega-popular tourist traps than mainland Europe and the U.K., hotels in and around Reykjavík tend to be at least a little cheaper than comparable properties in London, Paris, and Rome. Beyond Reykjavík, you will find areas like Blue Lagoon where top-of-the-line resort suites will cost you a lot of pretty pennies (or in this case — Icelandic Króna), but you can also find a number of smaller inns off the beaten path that cost a lot less than what you may have been expecting based on U.S. and Western European norms. Wherever you decide to stay, Kayak is a great site for finding the right accommodation for your budget and itinerary.

Vehicle Rentals

Since much of Iceland is rural, and since some of the top sights to see are pretty remote, you may need a car if you want to spend time outside of Reykjavík. Fortunately, Kayak offers plenty of great cars at amazingly low prices, so make sure to check them out when you’re looking for that perfect car to take you from the lava fields to the mountains, the fjords, the black sand beaches, and beyond.

We hope this guide helps you plan the perfect Icelandic getaway. It’s ultimately up to you to decide what to do and where to go, and hopefully, you now have better ideas on where you need to go to do everything you want on this enchanted almost-Arctic island.

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