Reykjavik — Neighborhood Guide
Laugavegur is Reykjavik's beating heart — the famous shopping street that extends from the Hlemmur bus terminal to the old city centre, flanked by Iceland's best independent boutiques, restaurants, coffee shops, and bars, with the Hallgrímskirkja church as its constant backdrop.
Quick Answer
Laugavegur is Reykjavik's beating heart — the famous shopping street that extends from the Hlemmur bus terminal to the old city centre, flanked by Iceland's best independent boutiques, restaurants, coffee shops, and bars, with the Hallgrímskirkja church as its constant backdrop.
6 hotels reviewed · Price range: $$$$, $$$ · Last updated March 2026
About This Guide
Laugavegur and its parallel street Skólavörðustígur form the spine of Reykjavik's cultural life — a walkable, compact strip that concentrates Iceland's best food, design culture, and nightlife within a few hundred metres. Most of the city's finest boutique hotels cluster in this neighbourhood, making it the most convenient and atmospheric base for exploring Reykjavik. The street is particularly alive on Friday and Saturday evenings when Iceland's world-famous nightlife culture comes into full expression.
Insider Tips
The best dining in Laugavegur is usually one street back from the main tourist thoroughfare.
Ask your hotel concierge for their personal favourite spots in Laugavegur — they often know hidden gems.
Walking is the best way to experience Laugavegur — most attractions are within a 15-minute stroll.
Our Picks
6 hotels · Updated February 2026
Laugavegur
One of the world's great hotel experiences, The Retreat is literally built into the lava field around the Blue Lagoon geothermal spa, with private lagoon access from many suites and an extraordinary volcanic landscape setting. The 62-room property delivers an otherworldly experience that is uniquely Icelandic — nowhere else on Earth can match it.
Laugavegur
Reykjavik's most celebrated city hotel, Hotel Borg has anchored Austurvöllur square — directly opposite the Althing parliament — since 1930 with Art Deco elegance and genuine historic grandeur. The prime location, sophisticated rooms, and the enduring quality of Iceland's first luxury hotel make it the city's defining address.
Laugavegur
Jutting from a lava field beside Iceland's Golden Circle, Ion Adventure Hotel is the country's most architecturally extraordinary property — glass walls opening to tundra and geothermal hot springs, a Northern Lights bar that must be seen to be believed, and activities ranging from glacier hikes to dog sledding. An utterly unique experience 45 minutes from Reykjavik.
Laugavegur
A magnificently restored early-20th-century pharmacy building on Austurstræti, Apotek is one of Reykjavik's most atmospheric boutique hotels — a place where the original apothecary shelving, marble counters, and tiled floors have been incorporated into an elegant contemporary design. The best-value luxury stay on the main boulevard.
Laugavegur
Reykjavik's most sophisticated boutique hotel sits at the top of Laugavegur, the city's famous shopping street, with beautifully designed rooms incorporating Icelandic craft materials — sand, lava stone, and driftwood. The rooftop hot tub with Hallgrímskirkja views and the warm, personal service make it a consistent favourite.
Laugavegur
Named for Reykjavik's most fashionable postcode, 101 Hotel is the city's definitive style hotel — a minimalist black-and-white design statement on Hverfisgata with locally commissioned art, exceptional beds, and a bar-restaurant that serves as one of the city's social anchors. A perennially cool address.
Keep Exploring
Common Questions
Laugavegur is the ideal neighbourhood for first-time visitors to Reykjavik — everything worth experiencing in the city is within walking distance, and the energy of Iceland's most famous street is unmissable.
Laugavegur is famous for being Iceland's most celebrated shopping and nightlife street, the Hallgrímskirkja church at its eastern end, the Friday-to-Sunday party culture, and the concentration of excellent independent restaurants and boutiques.
Reykjavik Airport (Keflavik) is 45-50 minutes from Laugavegur by Flybus or taxi. The Hlemmur bus terminal at the east end of the street is the hub for city buses. Most of Reykjavik is walkable from Laugavegur.
More Destinations
Prices and availability change daily. Lock in the best rate by booking early — most of our top picks offer free cancellation.
View All Reykjavik Hotels