The best budget hotels in Reykjavík, including karaoke rooms and Northern Lights ‘selfie corners’

The hotel enjoys a fantastic location right on the harbour and close to the city centre; main shopping street Laugavegur is around the corner. The hotel exudes a generally warm and inviting aura. Rooms have comfortable beds and come with chic black-and-white en-suite bathrooms, minibars and televisions. Book the right room and you’ll get views over the bay and mountains as well as Harpa, the city’s glittering concert hall. There’s an Icelandic restaurant with killer views across the city and sea, and an outside roof terrace for the warmer months.

Upscale hostel meets boutique hotel in an up-and-coming downtown location on the quieter eastern end of the main street, Laugavegur. Comfortable, stylish rooms and spacious dorms are chic and contemporary, with colourful walls, wooden floors and giant beds. Most rooms have private balconies, a real treat with those ocean and mountain views. Mingle with locals over craft beers and cocktails at happy hour, and dine on traditional Icelandic fare. You might find exhibitions, music performances and many creative events at Hlemmur Square, or for something closer to home the hotel sometimes hosts live music.

This welcoming family-friendly hotel is set in a green and hilly area at the edge of the city centre. There’s plenty on site to keep you occupied, not least the Soley Natura Spa, which encompasses a pool, sauna, hot tub and fitness centre. There’s a cosy, armchair-filled library that holds regular film screenings and weekly bedtime stories (for adults and children), an in-house bakery and Icelandic restaurant. The friendly staff can also give you a discount for the Reykjavík Art Museums and organise services like tours and laundry.

A small but affable hotel, located close to the centre of Reykjavik. There’s a swish lobby with a chesterfield sofa and designer chairs. Rooms have televisions and large windows that let in plenty of natural light. The quiet surroundings and comfy large beds make for a quiet night’s sleep – not always the case in some of the more downtown hotels. The hotel breakfast, served in Potturinn og Pannan next door, is a reasonable array of cheeses, cold meats, fruit and fresh breads as well as plentiful tea, coffee and juices.

This simple hotel is a distinctly no-frills affair, but it’s clean, efficient and affordable. The public areas are stylish enough, with hanging copper lamps in the stairways and comfy armchairs and sofas in the reception area. The main public spaces are below ground; what they lack in natural light, they make up for in spaciousness and amenities though, with a serviced bar, large televisions, pool table and a Northern Lights ‘selfie corner’. Rooms, by contrast, are comfortable but functional. There is no in-house restaurant or bar but there are plenty in the local area and a short walk downtown. Continental breakfast is served daily.

This breezy, functional three-star on the small but charming Ingólfstorg Square in Reykjavik’s Old Town is a solid choice thanks to its decent service, convivial bar, and comfortable, modern rooms. The hotel can feel fairly functional in places, but there’s just enough warmth in the wooden flooring, white walls and light-coloured furnishings to lend it a welcoming, if not overly stylish, aura. The Plaza Bar is contemporary with a mix of seating, floor-to-ceiling windows and a pleasantly low-lit ambiance at night. It has a happy hour from 4pm-6pm. Breakfast is a decent spread of hot and cold food.

The building that houses these apartments – known locally as Rúblan or The Rubla – is quite historic, having been built by local publishing house and bookshop Mál og menning in 1961. Most of the apartments – some of which feature contemporary lamps, tables and other furnishings, others with more Eighties décor such as fairly kitsch artworks – look across the city to the sea, and many also come with shared balconies. The fifth and sixth-floor penthouses have the best views. There is also a rooftop terrace with a hot tub and panoramic views of the city and Faxaflói Bay. The spa has a relaxation area with the option to enjoy a glass of champagne.

The Alda is located on Reykjavik’s main shopping street, Laugavegur, which puts it within easy walking distance of a diverse array of restaurants and cafés, boutiques, bars, clubs and galleries. The interior is surprisingly stylish, with vibrant colour schemes, eye-catching artworks and designer furnishings in the upbeat lounge and reception area, while the rooms are mellower but still pleasingly contemporary. The hotel’s Brass Kitchen & Bar on the ground floor serves a decent array of contemporary-casual cuisine (burgers, barbecued lamb chop, upmarket fish and chips) and drinks.