Where to stay in Iceland
From Reykjavík it is 186 km to Vík and 381 km to Akureyri, and the weather sets the pace on every one of them. The base decides how much of each day goes on the road.
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How the areas differ
Reykjavík is the capital and the base for a first trip, 50 km from Keflavík airport, with the Golden Circle as a day trip. The loop, Þingvellir, Geysir and Gullfoss and back, is about 230 km from the city.
Staying on the loop saves the drive back. Selfoss sits on the Ölfusá about 59 km from Reykjavík; Laugarvatn and Flúðir lie further inland. Along the south coast, Hella sits on the Ytri-Rangá about 94 km from Reykjavík and Vík 186 km away, with the black beach of Reynisfjara 11 km from the village.
Akureyri, on Eyjafjörður, is the town of the north, 381 km from Reykjavík with its own airport about 4 km away. Snæfellsnes, north-west of the capital, has Kirkjufell above Grundarfjörður and the harbour town of Stykkishólmur, about 175 km from Reykjavík.
Staying with a rental car
Iceland drives on the right with headlights on at all times. GetCar's guide Driving in Iceland: Speed Limits, Fines, Gravel Roads, One-Lane Bridges, F-Roads and Weather covers the rules, the fines and the roads that catch visitors out. Check the road conditions at umferdin.is or on the road phone line 1777, and the Met Office alerts at vedur.is, on every driving day.
Reykjavík charges four parking zones. P1, the most central, costs ISK 660 an hour for up to 3 hours; P2 costs ISK 240 an hour; both charge from 09:00 to 21:00 on weekdays and 10:00 to 21:00 at weekends. P3 costs ISK 240 an hour for the first 2 hours and ISK 70 after that, and P4 ISK 240 an hour, both on weekdays only. Pay at a meter or in an app such as EasyPark or Parka; unpaid parking costs ISK 4,500.
Akureyri charges ISK 225 an hour in P1 and ISK 113 in P2, from 10:00 to 16:00 on weekdays, with a 2-hour limit on some streets. The Vaðlaheiði tunnel near the town costs ISK 2,216 for a car, paid online within 24 hours; otherwise the rental company pays and charges the card with a fee. At Þingvellir, parking costs ISK 1,000 per car for the day, read by camera.
For the south coast villages, the Golden Circle towns and Snæfellsnes, no official parking source turned up, so ask the host how parking works.
What the lodging tax and homestay rules mean for a guest
Iceland charges a lodging tax per unit per night, collected by the seller. Since 1 January 2025 it is ISK 800 in hotels, guesthouses and other places with an operating licence in categories II to IV, and ISK 400 on camp sites and pitches for motorhomes and caravans. A room rented on its own is one unit, and so is a whole apartment or holiday house rented as one, so a family in one apartment pays for one unit.
Homestays work differently. An individual can register a homestay with the District Commissioner at their legal home or, under the Icelandic text of the rules, in one other property they own outside urban areas. The host may rent for at most 90 nights and ISK 2,000,000 in a calendar year in total, and the property receives a registration number that must appear in all marketing and on online booking sites. Within those limits no lodging tax is charged. A listing without a number, or a place rented far beyond 90 nights a year as a homestay, is worth a question.
Iceland is outside the EU but inside the Schengen area, and it uses the EU Entry/Exit System, which has been fully operational since 10 April 2026.
When to book what
Book the nights in the order of the drive. A Ring Road or south coast trip works best with one or two nights in each area, so that no day ends with a long drive back in bad weather. For the north, Akureyri has its own airport, about 4 km from the town, instead of the 381 km drive from Reykjavík.
The highland F-roads usually close from mid-September until June or July, so a stay in September or later is a stay on the main roads. Studded tyres are allowed from 1 November to 15 April.
Which area for which trip
A first trip with day trips from one base: Reykjavík.
Waterfalls, black beaches and glaciers: the south coast, Hella or Vík.
The Golden Circle without driving back to the city: Selfoss, Laugarvatn or Flúðir.
The north, with its own airport: Akureyri.
A peninsula loop with Kirkjufell: Snæfellsnes.
Questions
Is it better to stay in Reykjavík or on the south coast?
Reykjavík for a first trip with day trips from one base, 50 km from Keflavík airport. The south coast, Hella or Vík, for the waterfalls and beaches of the south without the drive back: Vík is 186 km from Reykjavík.
How much is the lodging tax in Iceland?
ISK 800 per unit per night in hotels, guesthouses and licensed apartments and ISK 400 on camp sites, since 1 January 2025. A whole apartment rented as one counts as one unit.
Do homestays in Iceland need a registration number?
Yes. A homestay registered with the District Commissioner receives a registration number that must appear in all marketing and on online booking sites, and it may be rented for at most 90 nights a year.
Where can a rental car park in Akureyri?
In the two paid zones in and around the centre, P1 at ISK 225 an hour and P2 at ISK 113, charged from 10:00 to 16:00 on weekdays. Pay with EasyPark, Parka, the town's app or at a meter.
Can the Golden Circle be done from Reykjavík?
Yes, as a loop of about 230 km: 50 km to Þingvellir, 56 km on to Geysir, 10 km to Gullfoss and 114 km back. Staying in Selfoss, Laugarvatn or Flúðir shortens the days.