Traveling is more accessible than ever before, even for people with relatively low budgets. Both in terms of transport and accommodation, there are plenty of options to help you cut down costs and save some cash, allowing you and your companions to enjoy the wonders of travel without having to spend a huge amount. Hostels are one of the best options for budget-conscious travelers. They offer low cost accommodation and lots of freebies like high speed internet access, continental or buffet breakfasts, coffee and tea making services, kitchen areas, communal lounges, secure storage lockers, and much more.


Staying in hostels is particularly popular in Europe, with many young people and solo travelers visiting various countries around the continent and searching for the best methods to save money along the way. Iceland is an increasingly popular tourist destination with a lot of beautiful scenery to see. It’s only a small country with a very little population, but Iceland has a long list of incredible natural attractions and is very well-known for the friendliness of its people and the beauty of its landscapes. It's the most sparsely populated country in all of Europe, making it a super spot to visit for anyone who wants to get away from it all, and there are a lot of excellent hostels to be discovered all around Iceland.

Best Hostels in Iceland

Iceland is home to a lot of different hostels, especially around the major cities like Reykjavík, which is the country’s capital and largest city. If you’re planning a trip to Iceland and want to find the best hostel to rest your head each night, we’ve done a lot of the hard work for you. Below, you can find some key details and brief descriptions of the very best hostels in all of Iceland.

- Galaxy Pod Hostel - Laugavegur 172, Reykjavík, Phone: +354-511-0505

The room rates at this Reykjavik hostel are a little higher than some of the others in the city, but if you can stretch your budget, it's definitely worth a look. As the name suggests, this hostel features pod-style accommodation with little private, enclosed beds that seem like something from a spaceship or sci-fi movie. The rooms are very cozy and clean, and there are both female and mixed dorms to choose from, all with shared bathrooms. A movie room is located on-site for guests to relax and make new friends, and there's also a bar area and fully-equipped kitchen which is open for guest use at any time of day. Several computers are also provided for people who need them, along with laundry facilities.

- Reykjavik Downtown HI Hostel - Vesturgata 17, 101 Reykjavík, Phone: +354-553-8120

Part of the Hostelling International (HI) chain of hostels, which has locations all around the world, the Reykjavik Downtown HI Hostel is conveniently located in the heart of Iceland's capital city, close by all the biggest attractions and touristic hotspots. There's a lot to enjoy about this hostel, including nicely decorated, spacious dorms that can sleep anywhere from 4 to 10 people, as well as private rooms for families or people looking for extra intimacy. All guests get high speed Wi-Fi access, and there are several computers on-site that guests can use too, along with a book exchange program, a cafe, and several communal lounges.

- Hafnarstraeti Hostel - Hafnarstræti 99-101, 600 Akureyri, Phone: +354-554-8855

If you're looking for a great hostel location in the Icelandic city of Akureyri, this is one of the best. Hafnarstræti Hostel has received rave reviews from past guests and is located in a nice position, offering convenient access to local attractions like the Botanical Garden or Akureyri Church. Pod-style beds are featured at this hostel, giving all guests a little extra privacy than they might expect in a typical hostel, and there's a nice terrace area and communal kitchen on-site too. Dormitories at this Iceland hostel are mixed-gender and come with shared bathrooms and free internet access.

- Midgard Base Camp - Dufþaksbraut 14, 860 Hvolsvöllur, Phone: +354-578-3180

Located in the southern town of Hvolsvöllur, a long drive east of Reykjavik, this hostel location is perfect for people who want to explore the natural side of the country like the various hills, swamps, valleys, and more. There's a lot of history in this area, and the friendly staff at Midgard Base Camp will be happy to share stories and travel advice with you. This hostel offers a really warm welcome to all guests and comes complete with its own bar, cafe, and restaurant serving some very tasty food. Mixed dorms and private rooms can be booked here and free internet is provided.

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