Icelands natural beauty attracts travelers worldwide, offering adventures like soaking in the Blue Lagoon, trekking glaciers, or witnessing the Northern Lights. But you dont have to overspend to experience it all. Hostels in Iceland provide a budget-friendly way to explore this stunning destination without compromising comfort.

With affordable prices, lively social environments, and an opportunity to mingle with fellow travelers, hostels represent the perfect base for adventurous individuals. Whether you're traveling through Reykjavik or going more rural, staying in a hostel allows you to tap into the magic of Iceland while keeping your expenses from getting out of hand.

Top 9 Hostels in Iceland for Travelers

So, let's explore the 9 best hostels in Iceland, where you can rest your head after a day of exploring.

KEX Hostel, Reykjavik

Reykjavik KEX Hostel is distinguished by being an old biscuit factory; hence, there is some industrial charm alongside modern features. This very lively hostel is available as dormitories and private rooms, therefore accessible for both groups and solitary travelers. KEX also has a lounge, a vintage record shop, and a restaurant, ensuring there's always something to do. The hostels central location gives easy access to Reykjavik's top attractions, like Hallgrmskirkja and the Old Harbor. KEX is the perfect base for exploring the capitals vibrant culture.

Reykjavik Downtown HI Hostel

Reykjavik Downtown HI Hostel offers simple, budget-friendly accommodation right in the heart of the city. It is part of the Hostelling International network and provides eco-friendly rooms, a well-equipped kitchen, and cozy common areas. It is a great option for those who want to be close to Reykjavik's attractions, including local restaurants, shops, and lounges. Dorms or private rooms provide the comfort of staying with easy access to the best of Reykjavik's urban scene.

Akureyri Hostel, Akureyri

Akureyri Hostel, located in Iceland's second-largest city, offers a peaceful retreat in North Iceland. The hostel features dormitory and private rooms and has a clean and welcoming atmosphere. Guests can explore the nearby Akureyri Botanical Gardens, relax by the city center, or rent bikes to discover the surrounding area. This small hostel in the charming city of Akureyri provides an excellent base for those wishing to experience Iceland's northern beauty away from the more tourist-heavy regions of the country.

Hvolsvllur Hostel, Hvolsvllur

Hvolsvllur Hostel is situated near Iceland's famous Golden Circle, offering a convenient and affordable place to stay. Located in the small town of Hvolsvllur, the hostel provides dorms and private rooms in a friendly, family-run atmosphere. The shared kitchen and spacious common areas make it easy to meet other travelers. The hostel's prime location makes it an excellent base for visiting attractions like the Gullfoss waterfall and Geysir. At the same time, the town offers a quiet escape after a day of sightseeing in Iceland's natural wonders.

The Loft Hostel, Reykjavik

The Loft Hostel in Reykjavik is a popular choice for travelers looking for a vibrant social atmosphere and beautiful views. The hostel offers dorms and private rooms, all decorated with a colorful and modern touch. The rooftop terrace is a great place to relax, enjoy a drink, and take in panoramic views of the city and surrounding mountains. The hostel also provides a communal kitchen and cozy lounge area, perfect for unwinding and meeting fellow travelers. Its central location makes it easy to explore Reykjavik.

Laugarbakki Hostel, Laugarbakki

For those exploring western Iceland, Laugarbakki Hostel offers a peaceful retreat in a scenic rural setting. Located in the village of Laugarbakki, the hostel features simple yet comfortable dorms and private rooms. The surrounding area is perfect for hiking, birdwatching, and enjoying Icelands rugged beauty. The hostels warm atmosphere, shared kitchen, and spacious common areas make it an ideal base for those wanting to experience Iceland's quieter side. It's a perfect stop for travelers on their way to explore the Westfjords or Snfellsnes Peninsula.

Selfoss Hostel, Selfoss

Selfoss Hostel is a cozy and affordable option for those exploring South Iceland, especially the Golden Circle. The hostel features spacious rooms, a communal kitchen, and a comfortable lounge area where travelers can relax and socialize. The location in Selfoss is perfect for visiting iconic sights like Seljalandsfoss waterfall, Thingvellir National Park, and the black sand beaches of Vik. Friendly staff can provide tips on nearby attractions, making Selfoss Hostel an excellent choice for those looking to immerse themselves in Icelands natural beauty and vibrant culture.

Vik Hostel, Vik

Located near the famous Reynisfjara black sand beach, Vik Hostel offers a laid-back atmosphere and convenient access to the surrounding wonders. The hostel features dorms and private rooms, each offering a cozy space to rest after a day of hiking and exploration. Vik is a small village but offers plenty of natural beauty, from the dramatic cliffs of Dyrhlaey to the Fjarrgljfur canyon. The hostel's peaceful location and welcoming environment make it an excellent choice for travelers who want to experience Icelands striking landscapes at their own pace.

Fjalladyrd Hostel, Hofn

Situated near Vatnajkull National Park in southeastern Iceland, Fjalladyrd Hostel offers a rustic, affordable place to stay. The hostel provides both dormitory and private rooms, each simple but comfortable. Guests can enjoy meals prepared in the fully-equipped kitchen or relax in the cozy common areas after a day of outdoor adventure. The surrounding region is known for its glaciers, making this hostel a perfect base for exploring the natural wonders of Icelands southeastern coast. If youre lucky, you might even catch a glimpse of the Northern Lights here.

Conclusion

Whether you're spending your days soaking in hot springs, hiking glaciers, or simply exploring stunning landscapes, staying in a hostel in Iceland is an affordable and comfortable way to experience the country. From the bustling capital of Reykjavik to the peaceful villages on the outskirts, there's a hostel for every traveler. Each of these hostels offers a unique experience, from social vibes and prime locations to tranquil retreats in nature. By choosing one of these top-rated hostels, you'll be able to explore Iceland on a budget without compromising on comfort or quality.