Where to Stay in Iceland in December

Laugavegur is the spine of Reykjavik, and staying within two blocks of it puts everything within a short walk. The Christmas lights along Skólavörðustígur, the corrugated-iron houses, and the warm glow of coffee shops like Reykjavik Roasters all hit hard in December dark. Hallgrímskirkja is a 5-minute walk uphill. Harpa concert hall sits 10 minutes down toward the harbor, hosting a serious winter festival lineup. The BSÍ bus terminal, where Golden Circle tours depart, is a 15-minute walk south. Restaurants on Vitastígur stay open late despite the darkness. Mid-range rooms run $200-350 per night in December.

Best for

First-time visitorscity culturerestaurant accessChristmas atmosphere

Walk times

Hallgrímskirkja church 5 min
Harpa Concert Hall 10 min
BSÍ Bus Terminal (Golden Circle tour departures) 15 min

Skip if: You came purely for Northern Lights or Golden Circle and want to skip city noise and premium pricing

Local tip: Book a room above the third floor. Laugavegur gets loud until 3am on weekends even in December, and the street-facing rooms on lower floors are the worst offenders.

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$168per night

Laugardalur (East Reykjavik)

Quieter and cheaper, with the best geothermal pool in Iceland

Mid-range $100-$280/night

Laugardalur sits 3km east of downtown along Sundlaugavegur. The main draw is Laugardalslaug, a large outdoor geothermal pool complex open until 10pm, with a 50-meter lap pool, hot pots at 38-42 C, and a steam room. Temperatures outside hit 0 C in December but the pools are perfectly warm. The Árbær Open Air Museum nearby closes in winter, but the neighborhood stays calm and residential. Bus 14 connects you to downtown in 12 minutes. Hotel prices run $20-40 cheaper per night than the 101 district for comparable rooms. You trade walkability for a real neighborhood feel most tourists miss entirely.

Best for

Budget travelersrepeat visitorsanyone who wants the geothermal pool experience without paying downtown rates

Walk times

Laugardalslaug geothermal pool complex 2 min
Laugardalur City Park 5 min
Downtown Laugavegur via bus 14 12 min

Skip if: You want walkable restaurants and bars at night. Dining options thin out sharply east of the city center after 9pm.

Local tip: Go to Laugardalslaug after 8pm on weekdays. Locals come then, tourists have already returned to their hotels, and the hot pots are half-empty.

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$112per night

Keflavik and Reykjanes Peninsula

Near the airport and Blue Lagoon, far from everything else

Mid-range $90-$220/night

Keflavik sits 50km from Reykjavik on the Reykjanes Peninsula, about a 45-minute drive along Route 41. If your flight lands at 11pm in December, staying here avoids a late-night Reykjavik transfer. Guesthouses on Hafnargata start around $100 per night. The Blue Lagoon is 20 minutes south by car near Grindavik. Book Blue Lagoon entry at least two weeks ahead in December as it fills. The town itself has a working harbor, a decent fish restaurant on Njarðargata, and very little tourist infrastructure. Northern Lights viewing here is excellent thanks to minimal light pollution compared to Reykjavik.

Best for

Early or late flightsBlue Lagoon visitsNorthern Lights huntingbudget stays

Walk times

Keflavik International Airport 10 min
Keflavik harbor 8 min
Reykjanes Lighthouse at Valahnukamol 25 min

Skip if: You want Reykjavik restaurants, Christmas markets, or city atmosphere. The drive to downtown is 45 minutes each way and adds up fast.

Local tip: Sky Lagoon opened 7km from downtown Reykjavik and is a strong alternative if Blue Lagoon is sold out. In December it usually has availability when Blue Lagoon does not.

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$101per night

South Iceland (Selfoss and Hveragerdi)

Golden Circle base camp for serious day-trippers

Mid-range $120-$280/night

Selfoss is a town of 8,000 on the Olfusa River, 60km from Reykjavik on Route 1. Staying here puts you 45 minutes from Geysir, 60 minutes from Gullfoss waterfall, and on the direct route to Vik and the black sand beaches at Reynisfjara. December keeps crowds thin at all these sites. Hveragerdi, 10km closer to Reykjavik, is a geothermal town where locals grow tomatoes in greenhouses heated by the earth. Guesthouses on Austurvegur in Selfoss run $130-220 per night. The town has a Kronan supermarket and a handful of restaurants including Tryggvaskálinn, a classic Icelandic diner open since 1939.

Best for

Golden Circle day tripsring road travelersavoiding Reykjavik crowds and prices

Walk times

Selfoss town center on Austurvegur 5 min
Selfoss bridge over Olfusa River 8 min
Hveragerdi geothermal town by car 12 min

Skip if: You want city restaurants, nightlife, or easy airport transfers. Selfoss is a base, not a destination.

Local tip: Tryggvaskálinn on Austurvegur serves lamb soup for around 2,500 ISK. Order the soup and bread. It is the best meal you will eat in Iceland for the price.

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$134per night