Hlemmur Square

Rooms and decor

Picture a plain white 1930 Art Deco building at the east end of Laugavegur, Reykjavik's main shopping street. Step inside and you hit an open lobby in white, grey, and pale wood, with a long sofa where travelers from every corner of the world wait to check in — that is Hlemmur Square. The most interesting thing here is that it never decided between boutique and hostel; it chose to be both in one building. The fifth floor and up holds around 75 private rooms with a sharp Scandinavian look — doubles and family rooms, a few with a sofa bed — while the lower floors are budget 4-to-10-bed dorms that keep this expensive downtown within reach of travelers on a tight budget. On a clear day, some of the top private rooms look over the rooftops to Mount Esja across the bay, a distant view that makes you feel you have actually arrived in Iceland. The overall feel is functional Nordic: clean, calm, and quietly charming in a way chain hotels rarely manage.

Food and amenities

The thing reviews agree on most is Hlemmur Food Hall (Hlemmur Mathöll), which sits right beside the hotel exit. The market fills an old building that used to be the city's central bus station, and inside it gathers several of Reykjavik's standout stalls — traditional fish soup served hot on a windy day, the famous Icelandic hot dog, wood-fired pizza, a Nordic bakery, and a specialty-coffee cafe. Long shared tables give it a relaxed, communal feel, the kind of place where you watch locals eat a weeknight dinner. Prices are friendlier than the tourist-packed restaurants up Laugavegur, and for anyone staying at Hlemmur Square it is a genuine bonus — a good dinner with a local feel, 30 seconds from the lobby. Inside the hotel itself, a light breakfast of Nordic bread, cheese, ham, and coffee is laid out in a common corner downstairs, with free Wi-Fi throughout, a self-service laundry, and a 24-hour reception where the English-speaking staff happily point you toward a Golden Circle or south-coast day trip.

Location and getting there

If Hlemmur Square has one trump card, it is the location. The hotel sits right at the Hlemmur bus stop, the exact spot where the Flybus — the bus most travelers use from Keflavik Airport (KEF) into town — pulls in. After landing and a 45-minute ride, you step off at Hlemmur and roll your bag into the lobby in a few steps: no pricey Icelandic taxi, no long walk with heavy luggage. Backpackers and solo travelers love that. For sightseeing, the hotel sits at the east end of Laugavegur, the area's main commercial street; walk straight down it and you pass Icelandic wool shops, local designers, coffee houses, and restaurants the whole way. It is about a 10-minute walk to the true city centre and another 12 minutes to Hallgrimskirkja, Reykjavik's icon, while the east side of the hotel stays quieter and closer to the Laugardalur district with its well-known geothermal pool. In short, you get the centre within an easy walk while dodging a little of the tourist-core chaos — a well-balanced address for this budget.

Things to know before booking

Straight talk to help you decide. The first thing to understand is that this is not a silent 4-star hotel. It is a boutique-hostel hybrid, so the guest mix is wide — couples, families, and solo travelers from every continent, all on different budgets. Between-floor noise, closing doors, and corridor sound can run louder than a normal hotel, so pack earplugs if you sleep lightly, and if you book a private room, ask for the fifth floor facing Laugavegur to sit farther from the Food Hall buzz below. Second, if you book a dorm, know that bathrooms and showers are shared, lockers are limited, and privacy is lower; some reviews mention a morning bathroom queue and late returns when the beds are full — that is the nature of a hostel, not a fault unique to this place. Third, the private rooms are compact by older-Northern-European standards, and a few lack large windows or sit beside a corridor; if you want real space or a suite, look elsewhere. Finally, breakfast is light — Nordic bread, cheese, ham, coffee — not a full luxury buffet, so set your expectations there.

Our take

After reading through hundreds of real reviews, Hlemmur Square is the hotel that sells central location, an affordable price, and a building with character in a package that is hard to find in Reykjavik, one of the most expensive cities on earth. If the trip in your head is stepping off the Flybus straight into the lobby, walking Laugavegur all day, grabbing street food at the Food Hall next door in the evening, then sleeping in a small, well-designed boutique room without paying 4-star money, this is the sweet spot. But if you want a big room, total silence, butler-level service, or an in-house spa and pool, this is not your answer. Overall we give it 8.2/10 — best for solo travelers, backpackers, and budget couples who value location and value over luxury, and the best budget choice in central Reykjavik right now.