The Best Budget-Friendly Hotel In Reykjavik: A Guide For The ‘Accommodation Inbetweener’

At a certain age, you just have to accept you are officially too old for some things. Now firmly in my 30s, my previously cemented love of budget hostels has expired. Once upon my twenties, a broken night’s sleep thanks to an anonymous bunkmate’s snoring was simply a minor inconvenience; now it will ruin my entire next day. The gymnastics of shuffling in and out of clothes under a bunkbed’s duvet used to be a breeze; now I’d probably end up slipping a disc.

However, my budget doesn’t exactly stretch to my developed taste for ‘comfort over everything’. I’m firmly in my accommodation ‘inbetweener’ era and there aren’t a whole whack of digs that bridge the gap between boutique and budget.

This struggle becomes even more of an issue when you factor in an expensive travel destination like Iceland. A trip to ‘The Land of Fire and Ice’ notoriously comes with a serious price tag, and according to The Times, Iceland is facing a reduction in tourism as a result, with international visitors dropping by 6% last year.

So, how can I make a trip to the top destination of many a travel wishlist achievable on a budget, without compromising on comfort? Well, CityHub might just have the answer.

Now, when I say ‘pod hotel,’ you need to immediately banish the thought of those tiny, coffin-sized capsules in Japan. Yes, while CityHub Reykjavik is technically a pod hotel, I can guarantee that you’ve never seen something quite like this before.

CityHub hotels (they also have locations in Amsterdam, Rotterdam and Copenhagen) blend private sleeping spaces with vibrant hangout areas and premium amenities at an affordable cost. A concept that is, quite frankly, music to my ears, back and bank account.

Their private, pod-esque if you will, sleeping areas are called Hubs and despite being small, they pack a big punch – we’re talking king-size beds, smart storage that doesn’t compromise on space, Bluetooth speakers, air con and heating. The best bit? You can enjoy this all without the fear of someone cracking the big light on at 3am.

The secret? Opting for an L-shaped pod over the stereotypical coffin. Hubs are a bit like a clever game of accommodation Tetris – one ‘up’ Hub is connected to a ‘down’ Hub, offering vertical space at the start of each that acts like a foyer.

CityHub invited me to try out their accommodation for myself and honestly, the biggest shock was the silence – I was so surprised at my inability to hear anyone in the adjoining Hub. I’m a tall gal and unlike other pod hotels I’ve been to, I could comfortably sit upright in bed without fear of a concussion. Even with a second person in the Hub with me (ooo-er), there was plenty of space for our suitcases and room to get changed in – we just had to take it in turns.

‘Shared bathrooms’ don’t exactly scream luxury (pause for flashbacks to the horrors of a hostel shower), but CityHub does things differently. You’d be forgiven for thinking that you were actually in a spa while popping to the loo – their Pinterest-worthy bathrooms boast warm terracotta walls and high pressure showers as well as complimentary towels and Rituals amenities.

As for the communal spaces, again, it’s a far cry from the hostel lounges and kitchens of yore. The Hangout (CityHub’s reception, bar and lounge area-in-one) features a self-service system in which guests can tap their own beers and refreshments using the digital wristband they’re given on checking in (which also doubles as your Hub key). Forget someone badly playing Oasis on a guitar in the corner – The Hangout is perfect for relaxing or even working in.

The real showstopper, though? CityHub Reykjavik’s rooftop hot tub. There really isn’t anything like soaking yourself in geothermally heated water while sub-zero Icelandic air whips around you – all with an incredible view of the night sky. If you’re lucky, sometimes it’s even possible to see the Northern Lights from the comfort of the tub.

Thought it couldn’t get any better? Buckle up, because the best bit of all of this? The cost. While the average hotel price in Reykjavik for April is hovering around £156 per night, you can snag a Hub for as little as £60 to £80 – and you could get this price even lower depending on what promotions and discounts are available.

Now, the issue with Iceland trips is that you only have to step outside your hotel and it suddenly feels like you’ve spent £20. It’s notoriously expensive and with endless guides online as to where you should and shouldn’t go, which tours you should and shouldn’t book, it can all be really overwhelming.

Enter the CityHosts – CityHub’s onsite concierge service that does a whole lot more than just check you in. As Reykjavik locals themselves, the hosts on duty will happily help you set up cost efficient tours to experience as much Icelandic culture as possible without the hefty price tag. After all, who actually knows the best spots better than people who live in Iceland all year round?

We were pointed toward a walking foodie tour that let us sample the most iconic Icelandic dishes from local businesses (although I still can’t say fermented shark is for me). And on one (utterly freezing) evening I fulfilled my dream of seeing the Northern Lights in all their glory after being sent out exploring with a pocket-friendly guide who knew the best viewing points. Another Iceland expert took us on a day trip around the country’s most famous natural landmarks and we knew we were guaranteed a brilliant meal afterwards thanks to the restaurant recommendations from the CityHosts.

So what exactly is the key to CityHub’s ability to provide accommodation that bridges the gap between budget and bougie? Well, it’s all in their very clever climate-friendly planning.

CityHub transforms empty urban buildings into hotels, avoiding new construction which as a result cuts CO₂ emissions per guest by 89% compared to the European hotel average. Their modular, recyclable rooms, in-house smart tech and harnessing of Iceland’s famous geothermal energy all add up to a model that’s efficient, scalable, and certified B Corp, a title held by just 0.1% of hotels globally.

I’m already planning a trip to Copenhagen purely based on the fact that there’s a CityHub there – because as someone’s outgrown dorms but not budget-friendly travel, I know I’m guaranteed the perfect fit.

To book a stay at CityHub visit: https://cityhub.com/reykjavik/