You’re standing on the balcony of Sky Lagoon or maybe walking down Laugavegur, and you realize something. Reykjavik is small. Like, really small. But because it’s so compact, where you park your suitcase matters more than in a sprawling city like London or New York. If you pick the wrong spot, you’re hiking up a frozen hill every time you want a coffee. Center Hotel Arnarhvoll sits right on the edge of the downtown core, facing the water. It’s a weirdly perfect spot.
It isn't the fanciest place in Iceland. It isn't trying to be a five-star boutique experience with gold-plated faucets. Instead, it leans into this sleek, Nordic minimalism that feels very "Reykjavik." You walk in and the first thing you notice is the light. Or the lack of it, depending on the season. In the winter, the lobby is this warm, dark sanctuary against the wind howling off the North Atlantic.
Honestly, the location is the main character here. It’s directly across from Harpa Concert Hall. You know, that giant glass honeycomb building that everyone takes pictures of? Yeah, that’s your neighbor.
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What actually makes Center Hotel Arnarhvoll different?
Most people booking a trip to Iceland get overwhelmed by the "Center Hotels" brand because they own, well, everything. There’s Center Hotel Plaza, Laugavegur, Midgardur... the list goes on. But Arnarhvoll has a specific vibe. It’s the "view" hotel. While the others are tucked into side streets or right on the main shopping drag, this one looks out over Faxaflói Bay.
If you get a sea-view room, you aren't just looking at water. You’re looking at Mount Esja. On a clear day, that mountain looks close enough to touch. On a bad day, you can watch the storms roll in across the ocean, which is honestly just as cool if you've got a warm drink in your hand.
The rooms are tight. Let’s be real. If you’re traveling with three huge suitcases, you’re going to be playing Tetris. But they are functional. The beds are that specific kind of Scandinavian firm that makes your back feel like it’s been reset. The bathrooms are clean, the showers have actual water pressure (which smells slightly of sulfur because, hello, Iceland), and the WiFi doesn't die when you try to upload a 4K video of a puffin.
The SKÝ Bar Factor
You can’t talk about this hotel without mentioning the eighth floor. SKÝ Lounge & Bar is arguably the reason half the guests book here. It’s got floor-to-ceiling windows.
Most tourists end up paying 4,000 ISK for a cocktail somewhere else, but if you’re staying here, you just take the elevator up. It’s one of the few places in the city where you can see the Sun Voyager sculpture, the Harpa, and the harbor all at once. Pro tip: if the Northern Lights are active and the sky is clear, go to the bar. They’ll usually dim the lights if the Aurora starts dancing over the bay. It beats standing in a freezing parking lot at 2:00 AM.
Getting around from the front door
Walk out the door and turn left. In three minutes, you’re at the harbor. Turn right, and you’re at the bottom of the hill leading to Hallgrímskirkja. You’re basically at the intersection of "Old Reykjavik" and "Modern Reykjavik."
- Harpa Concert Hall: Literally across the street. Even if you don't like opera, go inside to see the architecture.
- Bæjarins Beztu Pylsur: The famous hot dog stand is a five-minute walk. Don't ask what's in them. Just get "eina með öllu" (one with everything).
- Rainbow Street: About seven minutes away if you don't stop to look at every souvenir shop window.
The hotel is also a designated pickup spot for tour buses. This is huge. In Reykjavik, big tour buses aren't allowed on the narrow downtown streets. You usually have to trek to a "Bus Stop" number. Center Hotel Arnarhvoll is right by Bus Stop 5 (Harpa), making those 7:00 AM glacier tour pickups way less painful.
The Wellness Area (And why you need it)
Icelandic weather is a physical assault. It rains sideways. The wind bites. After walking around the Golden Circle for ten hours, your bones will feel cold.
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Arnarhvoll has a small spa area in the basement with a hot tub and a sauna. It’s not a sprawling resort spa, but it’s secluded. There’s something deeply satisfying about sitting in a steaming hot tub while it’s snowing outside. It’s included for some room types and a small fee for others. Check your booking. If it isn't included, pay the fee. Your hamstrings will thank you after you've spent the day hiking on a glacier.
Addressing the "Sulfur Smell" and other quirks
If you've never been to Iceland, the water is going to surprise you. It smells like rotten eggs. This isn't a "hotel problem"—it’s a "volcanic island problem." The hot water is geothermal. It comes straight from the ground. At Arnarhvoll, just like everywhere else in the city, that smell is just part of the deal. The cold water, however, is some of the purest on Earth. Don't buy bottled water. Just fill your flask from the tap in your room.
Another thing: the seagulls. Because you’re right by the harbor, the seagulls are loud. They are aggressive. They don't care that you’re trying to sleep in until 10:00 AM. If you’re a light sleeper, bring earplugs or ask for a room on a lower floor away from the roofline.
The Breakfast Situation
Breakfast is standard European fare, but with an Icelandic twist. You’ll find the usual croissants, eggs, and coffee. But you’ll also see a big bottle of Lysi (cod liver oil) and a bowl of Skyr.
Take the Lysi. Icelanders swear by it for surviving the dark winters. It tastes like a fish’s gym bag, but it’s the "expert" thing to do. The breakfast room gets crowded around 8:30 AM when everyone is trying to eat before their tours start. If you want a peaceful meal, go at 7:00 AM.
Is it worth the price?
Iceland is expensive. There’s no way around that. You will pay $30 for a burger and $12 for a beer. Compared to the ultra-luxury hotels like The Edition (which is right next door and costs double), Arnarhvoll offers a middle-ground value. You get the premium location without the $700-a-night price tag.
It’s perfect for couples or solo travelers who want to be in the middle of the action but still want to see the ocean. It’s less "vibrant party hostel" and more "sophisticated home base."
Planning your stay at Center Hotel Arnarhvoll
If you're actually going to book this place, don't just wing it. Iceland's tourism peaks in the summer, but the shoulder seasons (September and April) are the sweet spots for pricing.
- Request a high floor. The noise from the street is minimal, but the views of the bay get exponentially better the higher you go.
- Check the cruise ship schedule. Since the hotel is near the harbor, big ships can occasionally block the "uninterrupted" sea view for a day. Not a dealbreaker, but something to know.
- Book the spa time early. It's a small space and can get cozy (read: crowded) in the evenings.
- Use the SKÝ Bar discount. Guests often get a discount or a voucher for a drink. Use it for a Brennivín (Icelandic schnapps) if you're feeling brave.
The real draw of this place isn't the thread count of the sheets. It’s the fact that you can wake up, look out the window, and see the Atlantic Ocean meeting the mountains before you even put your shoes on. In a city as quirky and rugged as Reykjavik, that’s exactly what you want.
Next Steps for Your Trip:
Check the current aurora forecast on the Icelandic Met Office website (vedur.is) before you arrive. If the activity level is 3 or higher and the skies are clear, make sure your first night at the hotel involves a trip to the 8th-floor balcony. Also, download the "Hopp" app for electric scooters; there’s a parking zone right outside the hotel entrance, which makes getting to the far end of the harbor much faster than walking.