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The Best South Iceland Hotels | Where to Stay in South Iceland

The Best South Iceland Hotels | Where to Stay in South Iceland

Whether you are planning a trip all along the Ring Road or you just want to check out Reykjavik and a bit more of the south coast, odds are you will want to know where to stay in South Iceland.

There are several small towns to choose from along the Southern Coast that will offer accommodation options within the town center or further along the outskirts.

This guide will go through some of the best South Iceland hotels to consider while going about a visit to the country.

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1) South Iceland Map

The South Coast of Iceland can be defined a bit different depending on where you are looking. However, for the purpose of this guide, I will talk about the area between Reykjavik in the southwest to Hofn in the southeast.

There are several towns located along the southern coast that offer various accommodation options. In this guide I will be focusing on 5 main places:

  • Reykjavik
  • Selfoss
  • Vik
  • Kirkjubæjarklaustur
  • Hofn

Top Hotel Picks: Looking for a quick recap on the top hotels for each place? Below are the top “mid tier” picks that you can find throughout this overview:

Reykjavik: Eyja Guldsmeden Hotel
Selfoss: Hotel South Coast
Vik: Hotel Dyrholaey
Kirkjubaejarklaustur: Hotel Laki
Hofn: Fosshotel Vatnajokull

All along the southern coast, there are just so many various places to visit and enjoy.

On the map below I have highlighted many of the top attractions, the main towns to stay in, as well as the hotel options that I will dive into soon.

2) How to Add South Iceland to an Itinerary

There are several ways to go about a trip to Iceland depending on how many days you plan to spend in the country. Below are just a few of the main ways to go about a trip:

1) Ring Road: if you have 8+ full days in the country, you should be able to enjoy a trip all around the Ring Road of Iceland. This will give you a chance to encircle the country and see spots all throughout Iceland.

If you opt for a Ring Road itinerary, that should give you around 3 nights on the southern coast, spending time in towns like Reykjavik, Selfoss, Vik and/or Kirkjubæjarklaustur.

» The 10 Day Iceland Ring Road Itinerary will go into more detail on how a trip like this will look like.

2) Reykjavik + Southern Coast: another great option for those spending a bit less time in Iceland, is to split time between Reykjavik and a town further along the South Coast.

That way you can take day trips out from Reykjavik for some of your trip, and then spend a couple days further to the southeast exploring that region (as it can be a bit far for a day trip).

» Feel free to check out the 7 Day Iceland Itinerary that splits time between Reykjavik and a town further along the coast.

3) Basing in Reykjavik: a third option here is to just base yourself in Reykjavik and take all day trips from there. This may limit you a bit more if you would like to head out to the Skaftafell / Jokulsarlon area but it is still possible with a long day trip.

Iceland Rental Car

3) The Best South Iceland Hotels

Now that you have a bit more background on the South Coast of Iceland and how to go about planning a trip, let’s dive into some of the best South Iceland hotels out there.

» I will break this down by town, so you can look at hotels that are nearby one another. Remember, not all hotels are directly within towns.

There are many circumstances where hotels will be located outside of the town center, and even 20+ minutes away from the nearest town.

While some hotels may be a bit further away from a town, these accommodation options usually offer serene and vast properties to enjoy their surroundings.

» For each place, I have noted different options based on budget – luxury, mid-range, and budget. This is to give you an idea of what type of accommodation you can get at various price points (note that luxury does not always mean 5 star luxury).

» I have included links to book each one of these hotels. I would recommend booking accommodation sooner rather than later as hotel options can be limited during the high season.

» If you would like to get an idea of hotels all around the country, check out the guide for the where to stay in Iceland (including many on this list)


Let’s start out in Reykjavik and then make our way further east along the South Coast. As you may imagine, within Reykjavik you will find the most accommodation options out of any other city. You can spend time enjoying the city itself and take day trips to places like the Glymur Waterfall.

There are plenty of places to choose from here that are all within walking distance of the city center, making it easy to head to bars, restaurants, and shops during your time there. Below are some of the top choices, which are all within walking distance of the city center:

Luxury: Reykjavik Konsulat Hotel

On the higher end of the pricing spectrum is the Reykjavik Konsulat Hotel, Curio Collection by Hilton.

Located in the heart of the city, the hotel will have everything you will need for your stay in the capital. Whether it’s the in house restaurant and bar, fitness center and spa, or its helpful staff, the Reykjavik Konsulat Hotel has it all.


Instead of putting down just one mid-range option here, I thought it may be better to list out several different choices that are within the same price range.

Each of them is located within the city center and would make for a great choice when visiting Reykjavik.

Budget: Center Hotels Plaza

Lastly we have the Center Hotels Plaza, a more affordable option for visitors. The hotel is a great base for those exploring the capital and beyond. It is perfectly located with the city and even offers breakfast for its guests.

Reykjavik Hallgrimskirkja


Selfoss is a great place to stay for the night after taking a trip around the famous Golden Circle.

All along the circle you will find a variety of unique attractions like Thingvellir National Park, Gullfoss Waterfall, Geysir, and the Kerid Crater. Just off the circle is also the famous Reykjadalur hot springs hike.

A 15 minute drive south from the crater is the town of Selfoss. Beyond Reykjavik, Selfoss is the largest of towns in the southwest portion of the country. It sits right on the banks of the Olfusa River and is located right on Route 1 (the main highway of the country).

The center of town sits a bit closer to the river and here you will find several restaurants, stores, and bars. When it comes to hotels, there are several that are around this area. However, many of the top options sit outside of the town center further down Route 1 (10-15 minute drive).

Below are Selfoss hotel recommendations based on budget:

Luxury: 360 Hotel & Thermal Baths

The 360 Hotel & Thermal Baths is located outside of Selfoss city center. Here you will find a stunning property with views of the Icelandic southern coast. There is an onsite restaurant and as the name says, there is a spa to relax at as well.

Mid-Range: Hotel South Coast

Hotel South Coast is located directly in the town center. So, if you are looking to stay in downtown Selfoss, this is a fantastic option for you. It has everything you would want in a hotel including a breakfast buffet, spa, sauna, and well equipped rooms.

Budget: Guesthouse Bitra B&B

Guesthouse Bitra B&B is also located outside of the town center, not too far from the 360 Hotel. For a budget option it is quite highly rated and is a nice little guesthouse off of the main road. It is a family run property with some very friendly owners.

Thingvellir Iceland Church


Approximately right in the middle of the South Coast of Iceland is the small village of Vik. Located on the water and not far from the famous attractions of Dyrholaey and Reynisfjara, Vik makes a great option to stay in overnight.

The village is home to several hotels and guesthouses, restaurants, a supermarket, and a beautiful church with a view. Below are some great options to choose from within and nearby the center of town:

Luxury: Hotel Kria

Hotel Kria is just within walking distance of the center of Vik, and is located right next to a black sand beach. This contemporary and modern hotel offers some truly spectacular views from its rooms and common areas. 

The ability to grab some nice breakfast at the hotel and then take a stroll right along the beach is something that not many other hotels in the region can offer.

Mid-Range: Hotel Dyrholaey

Located around 10 minutes by car from town center is Hotel Dyrholaey. Named after the nearby rock formation arch, the hotel is located just down the road from it. 

The hotel offers great mountain and glacier views as well as views of the Atlantic Ocean out in the distance. 

Budget: The Barn

Lastly is The Barn, which is located a bit less than 10 minutes away from Vik. From the outside, you can tell what they call it The Barn but don’t worry, inside of it is quite nice. 

You will find a mixture of dorm and private rooms here that are great for the budget traveler. Coupled with the fact that there are plenty of common areas here, you are sure to meet other like minded travelers during a visit.

Reynisfjara Iceland View


As you continue further east from Vik, it takes another hour or so until reaching the town Kirkjubæjarklaustur, also known as just Klauster.

You won’t find much around the town but there will be a supermarket, gas station, and some restaurants along the area.

While there are hotel options in the town itself, there are also places further east and west of the center. Below are the three recommendations:

Luxury: Magma Hotel

The Magma Hotel setup is quite special. The rooms here are individual cabins overlooking lakes, lava fields, and glaciers. It is located just outside of the town center and is the perfect place to call home for a night.

Mid-Range: Hotel Laki

Just a bit further down the road from the Magma Hotel is Hotel Laki, another fan favorite. This family run hillside hotel has its own onsite restaurant and also offers guests some fantastic views of the countryside.

Budget: Hvoll Hostel

For the budget option we have the Hvoll Hostel, which is located 20 minutes further east from Kirkjubæjarklaustur.

Expect to have mostly shared bathrooms here with tighter rooms of bunk beds. The family run guesthouse is super helpful and friendly, which will make your time there that much more enjoyable.

Fjadrargljufur Iceland


The furthermost eastern town of South Iceland here is Hofn.

After a day of exploring Skaftafell National Park and touring around Jokulsarlon Glacier Lagoon, the road trip continues around towards the eastern edge of the country to the small town on the edge of a peninsula.

Several of the highly rated places to stay are located outside of the town center including all three of the recommendations below.

Luxury: Hotel Jokull

Hotel Jokull is located just outside the town center and offers some great views of the surrounding countryside and glaciers. There is an onsite restaurant and bar and the rooms offer plenty of room to enjoy the night.

Mid-Range: Fosshotel Vatnajokull

Just prior to reaching Hotel Jokull, you will pass by Fosshotel Vatnajokull. The location is truly remarkable here as you take in views of Europe’s largest glacier from the hotel. There is a nice patio to relax on to take in the mountain views after a long day of activities.

Budget: Guesthouse Nypugardar

Farthest from the town of Hofn is this guesthouse that sits not too far from the water’s edge. The location is a bit secluded but it does come with some peace and quiet off the main path.

Skaftafell Glacier Iceland

Other South Iceland Hotels

In addition to the places mentioned above, there are certainly other small villages located along the South Coast of Iceland. In addition, there are also some hotels that are kind of on their own between towns.

I did want to point out some other unique and highly rated options in the case you are interested in them:

Hotel Ranga

Located around 40 minutes further east from Selfoss is the famous Hotel Ranga, one of the highest rated and reviewed hotels in the country. This is certainly more of a luxury option and is priced accordingly. 

Whether it is the views of Mount Helka, the nearby river, or the Eyjafjallajokul volcano, you will get all of them and more. It also doesn’t hurt to have a stargazing observatory, hot tub, and top tier restaurant on site.

Fosshotel Glacier Lagoon

Located just 20 minutes way from the entrance of Skaftafell National Park and 30 minutes away from Jokulsarlon Glacier Lagoon, is the Fosshotel Glacier Lagoon. This hotel is perfectly placed between two of the most iconic natural attractions in Iceland.

Guesthouse Fludir

Instead of staying in Selfoss after a visit around the Golden Circle, there is also the chance to stay in the town of Fludir. The Guesthouse Fludir is the spot to be here as it is the highest rated accommodation option in the town. 

While the offerings of the guesthouse are nothing too fancy, it has everything you need for a comfortable stay during a trip to Iceland.

Hotel Skogafoss

The Skogafoss waterfall is one of the most iconic waterfalls in the entire country. What better way to enjoy the waterfall than to actually stay directly in front of it at Hotel Skogafoss.

Waking up and being able to walk right outside the waterfall itself is quite the experience to take part of.

Hotel Vestmannaeyjar

While all of the hotels on this list are on the mainland of Iceland, there is also the chance to visit a small island located just off the southern coast – Vestmannaeyjar. A short boat ride away from the mainland, lays this unique island to enjoy.

One of the top spots on the island is Hotel Vestmannaeyjar, located right in the middle of the town center.

Skogafoss Hike

I hope this guide has helped you pick out some of the best South Iceland hotels for you trip! If you have any questions or comments, feel free to add them in below.

Also don’t forget to check out the remaining Iceland itineraries and guides up on the site.

Have fun out there and safe travels!

Where to Stay in South Iceland

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