It was somewhere between Vík and Höfn, standing in a farmhouse kitchen at 7 AM with a mug of coffee I hadn’t asked for but desperately needed, watching the host’s daughter chase a very opinionated hen across the yard, that I understood what I’d been missing on my first Iceland trip. Back then, I’d driven the Ring Road from a Reykjavik hotel base — three hours of driving before I even reached the first waterfall, three hours of driving back at night, collapsing into a generic hotel bed that could have been anywhere on earth. Now, halfway through a langoustine bisque and a conversation about road closures on Route 1, I was somewhere. Figuring out where to stay in Iceland outside Reykjavik turned out to be the single best decision I made on my second visit — and this guide is everything I wish I’d had before that first trip.
Why Staying Outside Reykjavik Actually Changes Your Entire Trip
Here’s the math that nobody puts in the glossy Iceland brochures: if you base yourself in Reykjavik and drive the Ring Road as day trips, you’re adding 60 to 90 minutes of driving every single day just getting out of the city and back again. Over a seven-day trip, that’s nearly half a day of your holiday spent on the same stretch of Route 1 you already know. Positioning yourself in small overnight towns along the Ring Road means you wake up already close to the next thing — the glacier, the black sand beach, the hidden hot spring down the farm track. It sounds obvious when you write it out. It genuinely wasn’t obvious to me until my second trip.
Beyond the logistics, there’s something harder to quantify. Iceland local guesthouses and farm stays operate on a different register than city hotels. The person handing you a room key is also the person who drove that road yesterday, who knows the waterfall that isn’t on any map, and who will call ahead to the next guesthouse if a road closure means you’re running four hours late. That kind of local knowledge is, frankly, priceless in a country where weather can turn a straightforward drive into an adventure with very little warning.
The Ring Road Towns Worth Stopping In (And What Makes Each One Special)
Selfoss is the sleeper hit of the South Iceland overnight scene. It’s only an hour from Reykjavik, which makes it feel almost like cheating, but positioning yourself here puts the entire Golden Circle within easy reach without the tourist infrastructure markups of closer villages. Selfoss has actual restaurants that locals eat in, a proper supermarket for resupply, and a town energy that feels lived-in rather than staged for visitors. It’s the kind of place where you can grab a flat white at a café and realize you haven’t heard another tourist for twenty minutes.
Vík is possibly the most photogenic village in a country overflowing with photogenic villages. The little red-roofed church perched on the hill above town, the black sand stretching east toward Reynisfjara, the fulmars wheeling overhead — Vík delivers the Iceland postcard shot from your guesthouse window before you’ve even had breakfast. What the photos don’t tell you is that Vík has maybe six hundred residents and accommodation books out months in advance in summer. Book early. Seriously, set a calendar reminder right now.
Höfn gets unfairly skipped by travelers in a hurry to reach the East Fjords, and that is a genuine tragedy because Höfn is the kind of small harbor town that makes you rethink your entire itinerary. The langoustine here — locally called humar — is the best I’ve eaten anywhere, served in small restaurants where the fishing boats are visible through the window. As the gateway to Vatnajökull National Park, it also positions you perfectly for glacier hikes without the early-morning marathon drive from the capital.
Akureyri in the north is where Iceland’s “second city” label gets both accurate and charmingly misleading. It has roughly 20,000 people, genuine good restaurants, and the endearing quirk of keeping its Christmas lights up year-round (the traffic lights even show heart shapes instead of circles). The botanical garden manages to grow plants that have no business surviving this far north, and the surrounding fjord is so dramatically beautiful that first-time visitors tend to stand on the main street just blinking at it. If you’re circling the Ring Road, Akureyri is your natural hub for the north.
Iceland Authentic Local Accommodation: What Farm Stays Are Actually Like
The word “guesthouse” in Iceland covers a wide spectrum, which is worth understanding before you book. At one end, you have essentially a private bed and breakfast — your own room, sometimes an en-suite bathroom, breakfast laid out in a small dining room at whatever hour suits. At the other end, you have a shared-bathroom situation in a converted farmhouse outbuilding where the hot water is genuinely hot and the surrounding silence is so complete it takes a night or two to actually sleep through it. Neither is bad. They’re just different, and reading the listing carefully matters.
Farm breakfasts in Iceland are something I think about more than is reasonable for a person with a regular life. Homemade rye bread that’s been baked underground in geothermal steam, thick skyr with local berries, eggs from hens that you may have watched operate with suspicious autonomy in the yard an hour earlier — it’s not fancy, but it is genuinely good and usually included in the room rate. When you factor breakfast into the cost comparison against Reykjavik hotels (where breakfast can add £15–25 per person), Iceland Ring Road accommodation at farm guesthouses often works out cheaper than city equivalents.
The hot tub situation deserves its own mention. Many farm guesthouses have a private outdoor hot tub — not a hotel pool, not a shared spa, but a small tub outside that’s yours for the evening, looking at a mountain or a fjord or, if you time it well, the northern lights. This is not an amenity you can replicate at any price point in Reykjavik. It is worth planning around.
The Iceland Small Towns Most Tourists Drive Straight Past
Seyðisfjörður in the East Fjords is the most photogenic small town in Iceland and, bafflingly, still undervisited by international tourists despite being roughly the size of a large village and absolutely absurd in its beauty. The multicolored wooden houses line a river at the foot of a steep fjord, there’s a functioning arts scene, and the ferry from mainland Europe arrives here, meaning it has a slightly international, bohemian energy unusual for a town of this scale. The drive in from Egilsstaðir descends through hairpin bends with views that made me stop the car three times in twelve minutes.
Kirkjubæjarklaustur — yes, Icelanders do actually say the whole thing — sits on the South Coast between Vík and Höfn and is surrounded by so many waterfalls tumbling off hillsides that the locals genuinely have trouble naming them all. It’s tiny, with a handful of guesthouses and one excellent café, but its position makes it invaluable as a stop on the long southern stretch of Ring Road. It’s also the kind of place where you can arrive intending to stay one night and find yourself, three days later, explaining to family members that you had reasons.
Dalvík, north of Akureyri, runs whale watching boats that are populated almost entirely by Icelanders, not tourists. This is the experience. The boats are smaller, the guides are fishermen who have been on this water their whole lives, and the absence of forty-person tour groups from Reykjavik means you can actually hear the guide explaining what you’re looking at. If you’re staying in Akureyri, Dalvík is an easy side trip that recalibrates your sense of what Iceland travel can feel like.
Why Packing Cubes Became Non-Negotiable for Farmhouse-Hopping Across Iceland
When you’re staying in five different guesthouses across the Ring Road in a week, unpacking and repacking becomes either a meditation or a meltdown. I learned the hard way that fumbling through a suitcase in a dark Icelandic farmhouse bedroom at midnight—trying not to wake your host family or knock over the hand-knitted throw pillows—requires a system.
What works
- You can live out of the cubes themselves instead of unpacking, which matters when you’re only staying two nights and the nearest laundry is 40 kilometers away.
- They compress enough to actually save suitcase space when you’re constantly moving, but not so aggressively that you’re wrestling with them like a very organized octopus.
- The mesh panels let you see what’s inside without opening them—crucial when you’re grabbing your “least damp” layer at 6 AM before a glacier hike.
What doesn’t
- They take up mental energy to pack efficiently, and after 10 hours of driving through rain and wind, your brain doesn’t want to organize anything.
- If you overpack one cube, the zipper starts refusing to cooperate, and there’s nothing quite like a jammed packing cube at 11 PM in a farmhouse with questionable WiFi.
I almost ditched them after day two when I’d crammed too many thermal layers into one and the zipper jammed halfway through—standing in a Vík guesthouse with wet hair, genuinely considering just living out of my suitcase for the rest of the trip. That’s when I realized I’d actually saved myself hours of searching. Get the BAGAIL 8 Set Packing Cubes.
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