Tourism in Iceland is continuously growing by 10% each year. With so many tourists there is not enough space to accommodate them all. It is really important to book for your accommodation far ahead before your trip to Iceland especially Reykjavik and South Iceland.
You may have to book 6 months to one year in advance otherwise you will have to bear the risk of not having a place to live or pay very high cost for one room, might be 500+ dollars for a single night. 
The tourism season in Iceland is from June to August and the price of accommodation may increase in this season. In the offseason, the price fall up to 40% but most of the accommodation remains close in winter season especially guesthouses. 
But you don’t have to worry about this problem if you are a good planner and researcher. You can look for the best hotels in Iceland and also guesthouses, hostels, rental apartments and farmhouses. There are many types of accommodations you can find in Iceland; here we will discuss all of them:

Iceland Hotels

A word hotel symbolizes the most luxurious option in Iceland but all the hotels are not good and more expensive as compared to guesthouses and even not all the hotels have private bathrooms. But generally, the hotels are fine standard and usually have separate rooms and private bathrooms. In contrast to guesthouses, there is no facility for cooking in hotels but generally has a restaurant on site. There are many best hotels in Iceland but these luxury hotels in Iceland don’t match the worldwide standard.

Iceland Guesthouses

Guesthouses are simple rooms in a private house and are usually cheaper than hotels. The quality of guesthouse ranges from hardly furnished to comfortable ones. Although the accommodation is shared, yet you will find accommodation on a budget. The guesthouses are best for a group of people or family. Some guesthouses also offer breakfast of cheese and toast with coffee but with an extra fee. Private bathrooms are very rare but most guesthouses provide kitchen facility for cooking your own food.

Iceland Hostels

Iceland houses around 32 hostels throughout the country. If you don’t think about hostels as a good accommodation option, you have no need to worry; standards of hostels are very good with better cleanliness conditions and safety. These are mostly shared spaces with up to five in a single room but many offer double room too. Shared washrooms and even kitchens are there for cooking your own food. You will have to pay extra for bedding and towel otherwise you can bring your own. Private rooms are also available in hostels but at very high rates.

Rental Apartments

There are many apartments available for rent throughout Iceland. These rental apartments range from classy flats in Reykjavik to cottages in Golden circle that usually opens in summer. Some are modern with entertainment facilities like TV and Wi-Fi while others are simple cozy cabins. Rental apartments are best for people traveling in groups or with families who may want bit more space or for those who want more flexibility with time to come and go.

Camping

Campsites attract adventurous people especially youngsters. The campsites offer great outdoor views which people love to enjoy. Nearly every village and the town have a campsite nearby. Camping is the best option for travelers who have a limited budget as the cost per night per person is surprisingly cheap. You have no need to worry about cleanliness and safety. Several campsites are present close to hiking trails and farms which most of the keen campers find it affordable and attractive to stay there.

Farmhouse

Stay in the farmhouse is the best way to feel close to nature and Iceland’s cultural traditions. Farmsteads are the backgrounds of Icelandic tradition and civilization and you will experience comfort like your home. You can also find some additional luxuries like farm-based activities. You can easily find a farmhouse that suits your requirements especially the budget.

Accommodation at various places in Iceland 

There are a number of hotels, guesthouses, hostels, camping, farmhouses, and rental apartments throughout Iceland. You have many things to do in Iceland and many places to visit in Iceland. So you can choose the location and type of accommodation to stay according to your preferences. Here are some accommodations across Iceland: 

Reykjavik Accommodation

Being the capital of Iceland, Reykjavik has many types of accommodations ranging from magnificent hotels to small guesthouses. There are many things to do in Iceland mainly in capital i.e. Reykjavik. You can stay there for a night or for the whole tour depending on your preferences.

 

At the center of the city, there is a Reykjavik Treasure B&B. It is very charming and situated in a great location. Another hotel in Reykjavik is the Reykjavik Lights. It also has great facilities and nice location. In addition to the hotel, in Reykjavik, you will also find Kex Hostel and Aurora Guesthouse.

Golden Circle Accommodation

Golden circle is the most beautiful road with three main attractions i.e. Thingvellir National Park, Geysir, and Gullfoss waterfall. Here you can stay at Geysir cottage, south-central hostel, Ion Adventure Hotel or Country Dream Guesthouse. 

Vik Accommodation 

Vik is a big town in the South Coast and it is popular for its black sand beach and cliffs. It is the nice place to stay. There are many accommodation options in Vik such as Hotel Edda, Hotel Katla Hofdabrekka, Vik Volcano Hotel, Vík Hostel, farmhouse Lodge Guesthouse.

Jokulsarlon Accommodation

After Vik the next big stop is Hofn. The main things to see here are Jokulsarlon lagoon and Verstrahorn. There is Hotel Smyrlabjörg between the Jokulsarlon and Hofn. You can also stay at Fosshotel Glacier Lagoon hotel, Vagnsstadir Hostel or Skyrhusid Guesthouse. 

Snaefellsnes Accommodation

It is believed as mini Iceland with attractive glaciers, lava fields, and craters. You can choose between Harbour Hostel, Arnarstapi Cottages or Fosshotel Hellnar hotel.

Myvatn Accommodation

Myvatn is famous for its distinctive lakes, craters and geothermal regions. There are many things to see in this region so you should stay close to the lake. You can go to Hlid Hostel, Guesthouse Stöng, Dimmuborgir Guesthouse or Laxa Hotel.

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