With its pristine destination and exquisite landscape, undoubtedly Iceland is a great tourist destination. However, while traveling to this wonderful land, keep in mind just one fact-the tour can be expensive. Right from Reykjavik hotel to traveling to food, you are unlikely to find budget items in Iceland. In fact accommodation can be one of the most expensive items in your tour-budget while traveling in Iceland.

Basically, Reykjavik hotel choices, particularly in the capital town, are quite expensive and luxurious affair. These hotels generally have their own private bathroom, furniture with typical Scandinavian design and restaurants serving exotic food. Take, for example, the Hilton Reykjavik Nordica Hotel that is located near the city center. With its elegant Scandinavian design, cocktail lounge, a stylish restaurant called VOX, state-of-the-art spa that offers the famous La Stone volcanic treatment and 252 superb suites, this hotel, which is one of Iceland's largest hotels, is definitely a luxury accommodation. Prices in this Reykjavik hotel vary as per the season but usually the standard double rooms are priced $179 and above.  You can also try out other luxury hotels in the heart of Reykjavík like the Loftleidir or the Hilton Reykjavik Nordica Hotel or the Radisson SAS. All of these hotels are among the best in Europe and you will surely have a wonderful experience while staying there. The only drawback is that the prices are steep.

Outside Reykjavík, however you will find some hotels that are more basic. These are usually summer hotels, and during winters they are either closed or are used as school dormitories. However, even while staying in such basic Reykjavik hotel options, you will have to shell out considerable sum of money, as the prices will not be less than $100 for a bed for a day.

If you are a budget tourist and are traveling alone minus the family, the best way for you is to think beyond Reykjavik hotel and consider staying in camps to savor the natural splendor of Iceland. This, on one hand, helps you to save on expensive accommodation, and on the other hand allows you to enjoy the nature at the fullest, as you stay outside. Usually the camping grounds are located outside the city center and in fact staying camps can be the cheapest housing options while touring Iceland. However, make sure that your tent is suitable to meet the challenge of the extreme and fluctuating weather conditions of Iceland. Even though it is cheap as far as Reykjavik hotel options are concerned, yet camping costs approximately IKR500 per person. Remember to get a camping permit from one of the tourist information centers in Reykjavík such as the one at Aðalstræti 2. Usually such permits will not more than $5-7 per person and can be obtained with ease.

Another popular staying option is B& B. This basically means that you share a room in some local resident’s house, who also provides you with breakfast. This naturally comes at a price much cheaper than the Reykjavik hotel alternative. However, depending on the owner and the location, the prices may vary. In fact, if you want to experience the true life in Iceland, staying with a local resident is a great idea. There are over 120 farms in and around Reykjavík that allow tourist accommodation. Though not luxurious, these accommodations often offer you the basic necessities like a European bed and breakfast and most often a private bathroom.
Besides trying out choices on Reykjavik hotel, you can also try out the hostels that are operated by Icelandic Hostel Association. There is a heavy demand for these hostels during the summer months and you have to book in advance.

During the winter months, however, they are often closed and available to the visitors at a reduced rate. Usually the hostels are cheap and often they offer private rooms for under ISK 3000. A popular option for the backpack tourist is the Salvation Army Hostel that charges around 2000ISK per night. This charge includes a sleeping bag accommodation, though it does not involve any breakfast for which you have to pay extra.

Every Reykjavik hotel is supposed to be rated by the government on a 1*-5* system, and this ensures that it offers standard service.  If you are looking for amenities like private bathrooms or an elevator, look for 3* or above, and be prepared to pay quite a steep price for it.

Some of the best hotels in the town Reykjavík belong to chains like Icelandair Hotels; Fosshotel; Edda having 16 basic summer hotels outside Reykjavík; and Kea group having five 4 star hotels. However, some of the famous Reykjavik hotel choices, like the Frón, the Borg and the 101 Hotel, are not part of this chain.

Expert travelers opine that one of the best ways to save money in Iceland is staying in a Reykjavik hotel or some other accommodation that allows you to make your own food. Thus, while searching for a Reykjavik hotel, try to find one, which offers a room with a kitchen. Some of the hotels in Reykjavík that do so are Hotel Frón, Hotel Baron or family rooms at the Travel Inn Guesthouse.

With the recent surge of visitors to Iceland, there has been an increase in number of Reykjavik hotel choices in the capital town. However, over priced accommodation and non-availability of accommodation still continue to be a problem. If you are traveling during the peak tourist season that is in June/July, make sure that you book your Reykjavik hotel well in advance.