Iceland’s epic landscapes draw hundreds of thousands of visitors each year. But it has so many exciting places that deciding which area to visit can be challenging.
From Reykjavik to the Westfjords, where’s a visitor to begin exploring?
5 great places to stay in Iceland include Reykjavik, the Reykjanes Peninsula, South Iceland, Akureyri, and East Fjords.
Those with more time can explore the more isolated Westfjords and Snaefellsnes Peninsula. Each location offers a range of great options for stay, hospitality, and sightseeing.
This article covers each of these areas in further detail. I’ll lists options for accommodation at various budgets and suggest nearby activities and attractions that might make a visit more enticing to you.
Also, see Why Is Iceland Called Iceland? to learn more.
1. Reykjavik and the Golden Circle
Most international visitors begin and end their Icelandic explorations in the nation’s capital Reykjavik.
It offers the most connections in and out of the country and is well-connected to the many sights most visitors want to see.
The quaint far-northern city offers many delights of a modern European metropolis. Guests can enjoy so many attractions, including
- Great contemporary and traditional architecture
- Museums and history
- Vibrant bars
- Excellent cuisine
- A thriving nightlife
When it comes to accommodation, Reykjavik has something for everyone. Visitors can find five-star accommodations, family, and budget hotels, and backpacking accommodations for the most frugal traveler.
Accommodation for All Budgets
At the top of the line, Marriott Hotel’s Reykjavik Edition caters to the most discerning travelers, for whom price is not a concern.
Located in the city’s heart, the hotel is just minutes from the beautiful Harpa concert hall and Old Harbor. 
Other luxurious options, including the Radisson Blu Saga Hotel and the Hilton Reykjavik Nordica, are a little further from the main urban attractions.
There are also great chain hotels like Centerhotels and Fosshotel with locations around the country, including in the capital.
Within the city, more affordable accommodations are available at Kex, B47, and the Loft Hostel.
Visitors looking for unusual experiences will find many in and around Reykjavik.
Hotel Viking, close to the airport, offers mock Viking Age decor and a Viking feast at dinnertime. Staying here, guests can get a taste of Icelandic tradition. 
The Northern Lights Iglúhús, a little outside town, offers cozy geodesic domes to its guests. 
Away from the urban light pollution, they can view the northern lights from relative comfort. The best times for viewing are in winter, between October and April.
Beyond Reykjavik: The Golden Circle
The Golden Circle is a 155 mi (250 km) loop, accessible from Reykjavik, that takes in some of the top sights Iceland offers.  The loop includes the following attractions:
- The Gullfoss waterfall
- Thingvellir National Park
- The Geysir geyser in the Haukadalur geyser basin
If pressed for time, you can cover the loop in only 2-3 days. But even on the shortest Icelandic trip, a tour of Reykjavik and the Golden Circle is a must.
Visitors can also make stops at Geysir Cottages or Hotel Geysir near the Geysir Geothermal Area.
They can also visit the Hotel Borealis, which is close to the Thingvellir National Park.
Besides rugged terrain, pretty lakes, and spectacular waterfalls, Thingvellir is also the site of a Viking amphitheater that historians believe hosted the world’s first parliament.
2. Reykjanes Peninsula
The Reykjanes Peninsula is home to one of Iceland’s most famous attractions, the Blue Lagoon.  The lagoon is not a natural hot spring.
A geothermal power plant fills the lagoon with mineral-rich wastewater. Many consider this water healing for skin conditions such as psoriasis.
Celebrities often visit the area to soak in the famous hot springs. Their antics feature in many prominent international publications, including National Geographic and Conde Nast Traveller.
For those who can afford it, the Silica Hotel gives guests access to a private hot spring.
The famous bright blue waters of the area’s hot springs attract plenty of visitors, so it is usually a good idea to make reservations well in advance.
3. South Iceland
Famous attractions located in South Iceland include the Solheimajokull glacier and the famous black-sand beach at Reynisfjara.
The region’s relatively remote location and open skies offer several great spots to observe the iconic northern lights, otherwise known as the aurora borealis.
Hotel Rangá and Magma Hotel offer picturesque settings to view the northern lights. October to April are the best months to catch sight of this breathtaking wonder. 
Hotels Skogafoss and Skogar are budget offerings close to the famed Skogafoss waterfall.
Hotel Katla and the Puffin Hotel in the tiny hamlet of Vik offer access to the spectacular Jokulsarlon glacier.
Vik and Kirkjubaejarklaustur have other budget accommodations, including the Gerdi Guesthouse. And Kirkjubaejarklaustur also has the Fosshotel Nupar.
Besides sightseeing, guests can enjoy hikes and snowmobile tours of the region.
Booking in advance is highly recommended because of the limited availability of accommodation in the region.
Akureyri is known as the “Capital of the North” because it provides excellent access to all the attractions of northern Iceland.
Upmarket facilities in town include Hotel Kea and the Saeluhus for luxurious stays.
Alternatively, the Akureyri Backpackers and the Akureyri Youth Hostel provide charming lodging at a reasonable budget.
The Fosshotel in nearby Lake Mývatn and the Hofsstaðir Country Hotel in Skagafjörður are other terrific options for exploring northern Iceland.
Both these locations are also great places to see the aurora borealis at the correct times of the year, as these sites are far from any sources of light pollution.
5. East Fjords
The East Fjords make up a relatively isolated region of Iceland that is sparsely populated but full of natural splendor.
Its largest town, Egilsstadir, is close to the Hallormsstadaskogur forest.
The Lake Hotel here offers luxurious rooms with spectacular views of lake Lagarfljot.
For those on a budget, the Hostel Berunes campsite offers a beautiful setting and amenities for an affordable rate.
The nearby settlement of Seydisfjordur has more affordable options, including the Post and Hafaldan Hostels.