Hostels

Search for hostels in Iceland here

Budget travelers will be pleased to find they have many options in Iceland (of course, depending on where you are coming from, you may need to adjust your idea of “budget”). Despite it’s astronomical prices for luxury hotels, the country is actually home to quite a few hostels that offer very affordable rates.

As of 2026, HI Iceland lists 17 Hostelling International hostels in 15 towns around the country, from Dalur and Loft in Reykjavik to farmhouses in the Westfjords and the East, along with dozens of independently-owned hostels. Several offer private and family rooms, though most offer dorm accommodations shared by several people. At the HI hostels, such as Dalur in Reykjavik, bed linen is now included, and some of the countryside hostels are open in summer only.

Hostel rates have risen a lot since this page was first written and change with the season. As of 2026, a bed in a dorm at Dalur cost 4,000 to 5,150 ISK a night for mid-October dates on HI Iceland’s booking page, and a private twin with a shared bathroom was 13,450 ISK, with an 800 ISK lodging tax added per unit per night. Check the hostel’s own site for current prices; booking direct is often cheapest. Campers in Reykjavik can use the Reykjavik Eco Campsite in Laugardalur, next door to the Dalur hostel, which is open all year.

Other options
Guesthouses are a great middle option between hostels and the much more expensive full-service hotels. Like hostels, they often have shared bathrooms, kitchen facilities and common areas, but they are generally quieter and offer extras like free internet and breakfast. Many offer the option of ensuite rooms for an extra fee and some offer apartments as well.

If you are planning a long visit, want to save money by cooking, or are traveling with 3-5 people, an apartment may be the most economical choice.Those visiting more rural areas and looking to camp along the way can check out the Iceland Touring Association, which runs 40 mountain huts around the country that are available for use by hikers. Couchsurfing is also popular in Iceland and it’s not too difficult to find a local willing to take you in for a few nights and show you around, especially in Reykjavik.

Photo by blatantgizmo