A coastal landscape with green hills, a rocky cliff, and a calm sea.

Find Cheap Hotels in Southern Iceland

  • Change your mind

    Book hotels with free cancellation

  • Treat yourself

    Save instantly and earn perks with One Key
    Learn about One Key

  • Be picky

    Search almost a million properties worldwide

Check availability on Southern Iceland Cheap Hotels

Tonight
8 Oct - 9 Oct
Tomorrow
9 Oct - 10 Oct
This weekend
9 Oct - 11 Oct
Next weekend
16 Oct - 18 Oct

Our top choices for Southern Iceland cheap hotels

A person sitting on a bench in a hallway with wooden paneling and red doors, reading a book titled 'Living Earth'.
A rocky coastline with waves crashing onto the shore.
A cozy library with bookshelves, a reading area with chairs, and a wooden desk.
A wooden wall with two framed pictures, a dark green sofa with patterned cushions, and a beige throw blanket.

1. The Fox Hostel

The Fox Hostel
Hrífunesvegur
United States
Joe
£56
includes taxes & fees
1 Nov - 2 Nov
The Fox Hostel
A modern interior with wooden flooring, black brick walls, and large windows offering a city view. Tables and chairs are arranged for dining.
A bar area with a brick counter, wooden stools, and a view of the ocean through large windows.
A modern bar area with a long counter, four black chairs, and a large mirror above the counter.
A modern interior with a piano, seating area, and a staircase.

2. The Barn - Hostel

The Barn - Hostel
Vik I Myrdal
Canada
Ankit
£78
includes taxes & fees
6 Nov - 7 Nov
The Barn - Hostel
A modern building with a grey facade, a wooden accent wall, and a large window.
A reception area with a fireplace, a baby changing station, and a map of the hostel.
A kitchen with a wooden countertop, a coffee machine, a microwave, and a toaster. There are framed pictures on the wall and a window with a view of the outside.
A conference room with large windows, a whiteboard, and a poster of animals.

3. Höfn HI Hostel

Höfn HI Hostel
Höfn
United States
Anna
£67
includes taxes & fees
1 Nov - 2 Nov
Höfn HI Hostel
A stainless steel kitchen with a central island, overhead ventilation, and a row of pots below.
A hotel room with two beds, a desk, and a chair.
A modern building with a clear sky and mountains in the background.
A staircase with dark carpeted steps leading to a landing, adjacent to a window with a view of a hilly landscape.

4. Skogar Hostel

Skogar Hostel
Rangárþing eystra
United States
Aidan
£79
includes taxes & fees
4 Nov - 5 Nov
Skogar Hostel
A building with multiple windows and a flat roof, under a night sky with green aurora lights.
A room with a door, a window, a black chair, an orange chair, a beige sofa, and a vase with dried flowers.
A room with a beige sofa, a glass coffee table, a black chair, and a small orange table.
A hallway with a mirror, a door with emergency exit signs, and a fire extinguisher.

5. Hostel Fjordur

Hostel Fjordur
Hafnarfjörður
United States
Kanchan
£70
includes taxes & fees
8 Nov - 9 Nov
Hostel Fjordur
A modern living room with a dark sofa, a round coffee table, and several potted plants.
A modern hotel room with a skylight, a bed, a bedside table with a lamp, a mirror, a sink, and a framed picture on the wall.
A modern office space with a sofa, chairs, a table, and a large window.
A multi-story building with a yellow facade, white trim, and a central entrance.

6. Old Town Reykjavik

Old Town Reykjavik
Downtown Reykjavik
Canada
Tatiana
£69
includes taxes & fees
3 Nov - 4 Nov
Old Town Reykjavik
A buffet with various food items and beverages.
A reception area with a check-in counter, a wall clock, and a flag.
A modern building with the sign "START" on the facade, featuring a flat roof and large windows.
A kiosk with various snacks and drinks, including chips, pasta, noodles, and beverages, displayed on a chalkboard wall.

7. Start Hostel

Start Hostel
Reykjanesbær
United States
Wonsuk
£106
includes taxes & fees
3 Nov - 4 Nov
Start Hostel
A two-story house with a snow-covered roof and a white picket fence.
A staircase with white balusters and a white handrail, leading to a door with a brass doorknob.
A wooden deck with a metal railing, overlooking a street with buildings and a mountain in the background.
A double bed with white bedding and black and white patterned pillows, a bedside table with a lamp, and a painting on the wall.

8. Refurinn Reykjavik Guesthouse - Hostel

Refurinn Reykjavik Guesthouse - Hostel
Vesturbær
United States
Justina
£99
includes taxes & fees
27 Oct - 28 Oct
Refurinn Reykjavik Guesthouse - Hostel
Bar (on property)
Exterior
Room
Bar (on property)

9. KEX Hotel and Hostel Reykjavik

KEX Hotel and Hostel Reykjavik
Downtown Reykjavik
United States
Palani
£89
includes taxes & fees
12 Oct - 13 Oct
KEX Hotel and Hostel Reykjavik
A modern bedroom with a black bed, a wooden floor, a fur rug, a bedside table with a vase, and a hanging light fixture.
A modern lounge area with seating arrangements, a wooden table, and a large window with a view of the outside.
A parking lot with several cars and a building with multiple windows.
A modern kitchen with wooden cabinets, a black sink, and a microwave.

10. Bus Hostel Reykjavik

Bus Hostel Reykjavik
Hlíðar
United States
Deborah
£109
includes taxes & fees
26 Oct - 27 Oct
Bus Hostel Reykjavik
View all properties

Find out more about Southern Iceland

Discover cheap things to do in Southern Iceland

Southern Iceland offers a trove of memorable experiences that won’t break the bank. Start your adventure at the iconic Seljalandsfoss waterfall, where you can walk behind the cascade for an unforgettable view—perfect for family photos. Just a short drive away, Skógafoss waterfall presents another stunning sight, and the surrounding area features a hiking trail that leads to even more scenic views, all free to explore. For a unique geological experience, visit the Sólheimasandur plane wreck, an eerie yet fascinating sight that requires a picturesque 4km walk from the parking area—ideal for those who enjoy a bit of adventure. If you’re keen on exploring the great outdoors, the black sand beaches of Reynisfjara near Vík are a must-see, where you can marvel at the basalt columns and take in the dramatic coastal scenery, all at no cost. When it comes to budget-friendly accommodation, consider staying in Vík, where a range of affordable hotels and guesthouses offer comfortable lodgings with easy access to these attractions. This charming village not only serves as a convenient base for day trips but also boasts local eateries where you can sample traditional Icelandic dishes without overspending. With stunning landscapes at your doorstep and a welcoming community, Southern Iceland is a delightful choice for a family adventure.

How to get cheap hotels in Southern Iceland?

✅ The length of stay in Southern Iceland often varies depending on the nature of the trip, but many travellers opt to stay for several days or up to a week to take in Southern Iceland's notable landmarks and points of interest.

✅  If you're looking for cheap hotels in Southern Iceland in 2026, book your hotel well in advance. Reserving your stay at least a few weeks or months ahead of time can help you take advantage of amazing rates on cheap hotels in Southern Iceland, and if your plans change you can find many options of hotels with free cancelation.

✅  To find affordable hotels in Southern Iceland on Expedia, start by entering your travel dates and the number of individuals in your group. Once you've provided this information, you can refine your search results by filtering for budget hotels in Southern Iceland.

✅  Use the filtering tools offered by Expedia to refine your search results by location, price limits, amenities such as breakfast included, and other factors that matter to you. This will help you quickly locate the ideal budget-friendly hotel that fits your specific requirements.

✅  If you're looking to save money on a cheap hotel in Southern Iceland, the ideal time to go is usually during the off-season in Southern Iceland. On Expedia, you can find hotels from £90*.

✅  Southern Iceland offers numerous budget-friendly attractions and activities for travellers, such as art and exhibits at free museums and galleries or exploring Southern Iceland on foot.

✅  One of the best ways to find cheap hotels in Southern Iceland is to search Expedia for properties that provide family-friendly accommodations and features such as activities and complimentary meals, and then sort these by price.

*Prices and availability are subject to change. Additional terms may apply.

Top Southern Iceland Hotel Reviews

Center Hotels Plaza

Center Hotels Plaza

10/10 Excellent
"Breakfast was good."
Yuan 1-night trip
Posted 2 days ago
Center Hotels Plaza
Alda Hotel Reykjavik

Alda Hotel Reykjavik

10/10 Excellent
"Perfect hotel!!"
Hada 5-night trip
Posted 4 days ago
Alda Hotel Reykjavik
Alva Hotel Brautarholt

Alva Hotel Brautarholt

10/10 Excellent
"After checking into a couple self check in places we realized that you must enter the code in slowly, it seems if you press the numbers quickly that it doesn't recognize it and fails. Once we figured it out the self check in went smoothly."
debra 1-night trip
Posted 4 days ago
Alva Hotel Brautarholt

Explore a world of travel with Expedia