Reykjavik Residence Apartment Hotel

A Residential Base in Iceland's Most Central Postcode

Reykjavik's accommodation market has split clearly in recent years. On one side sit the large branded hotels, concentrated along Laugavegur and the waterfront, offering points programmes and full-service amenities. On the other, a smaller cohort of apartment-hotels and serviced residences has emerged, aimed at travellers who want a kitchen, a living room, and the latitude to move through the city on their own schedule. Reykjavik Residence Apartment Hotel, addressed at Vatnsstígur 2 in the 101 district, belongs to that second category — a format that rewards visitors who plan multiple nights and prefer to cook breakfast before heading out to the lava fields or the Golden Circle.

The 101 postcode is not incidental. It covers the oldest and most walkable part of the Icelandic capital: Hallgrímskirkja to the east, the old harbour to the north, Tjörnin pond to the south, and the main commercial strip of Laugavegur running through its centre. For a visitor arriving without a car, this address means the city's primary dining, bar, and gallery scene is accessible on foot in most weather — a practical advantage in a city where January temperatures and wind make distance meaningful. Neighbouring hotel options in this zone include the 101 hotel Reykjavik, the Apotek Hotel by Keahotels, and Hotel Borg by Keahotels, all of which operate on a full-service model at higher price points than the apartment format typically commands.

The Apartment-Hotel Format in an Icelandic Context

Iceland's travel economy has matured substantially since the tourism surge of the early 2010s. Visitor numbers drove construction of standard hotel inventory across the city, but it also created demand for formats that don't expire after two nights. The apartment-hotel model , serviced units with kitchenettes or full kitchens, separate sleeping and living areas, and less daily interaction with front-desk infrastructure , has proven particularly durable among northern Europe and North American visitors who treat Reykjavik as a multi-day base for ring road excursions. A stay structured this way allows guests to return from a day at Silica Hotel in Grindavík or the southern coast around UMI Hotel in Vík and settle into a space that functions more like an apartment than a room.

This format also suits the rhythms of Icelandic light. In summer, when the sun barely sets, having a kitchen and a living space means guests aren't dependent on hotel dining schedules or restaurant hours that may not align with the day's unusual energy. In winter, when darkness arrives by mid-afternoon, a base with proper living space makes the long evenings more bearable , and positions guests well for northern lights alerts that require quick departures at irregular hours.

What the 101 District Sounds and Feels Like

Arriving on Vatnsstígur, the immediate impression is of a compact, low-rise streetscape that is distinctly Reykjavik in character: corrugated iron facades painted in faded pastels, basalt stone underfoot, and the particular quality of subarctic light that shifts the colour of everything throughout the day. The street sits between the commercial energy of Laugavegur and the quieter residential lanes that run toward Tjörnin. This position puts it in the middle register of the city's noise spectrum , not silent, not loud, and close enough to walk to the harbour fish market or the bar strip on Austurstræti without committing to a long route.

For travellers comparing options across the city's apartment and boutique hotel tier, the Black Pearl and Hlemmur Square occupy different positions: Black Pearl draws from a design-led luxury segment, while Hlemmur Square sits adjacent to the market hall of the same name and serves a neighbourhood-immersion approach. The Residence sits in a tier where location and format do more work than design spectacle, which suits a particular kind of traveller.

Using Reykjavik as a Starting Point

The case for staying in central Reykjavik rather than distributing nights across the countryside is direct: the city is where flights arrive, where the density of good restaurants and bars concentrates, and where day-trip logistics are easiest to manage. Properties further afield, such as Eleven Deplar Farm in Ólafsfjarðarmúli, Hotel Ranga in Hella, or ION Adventure Hotel in Nesjavellir, offer immersion in Iceland's landscape that a city hotel cannot replicate. But for a first or second visit where the agenda includes a mix of city time and day excursions, a central Reykjavik base is the more practical choice. The apartment format extends this logic: a kitchen means grocery runs to the nearby Bónus or Krónan reduce daily food costs significantly in a city where restaurant prices are among the highest in northern Europe.

For visitors planning longer itineraries that take in the west fjords, the Snæfellsnes peninsula, or the highlands, properties including Vogafjós Farm Resort in Vogar, Hótel Búðir, and Hótel Reykjahlíð serve as useful overnight stops, with Reykjavik as the bookend at either end of the trip. Our full Reykjavik restaurants guide covers the city's dining scene in depth for guests using the capital as a base. The Reykjavik EDITION, the Canopy by Hilton Reykjavik City Centre, and the Hilton Reykjavik Nordica represent the full-service branded end of the market for those who want loyalty points or branded consistency. The Alda Hotel operates in a mid-market boutique register that sits between the branded tier and the apartment format.

Planning Your Stay

Vatnsstígur 2 places guests within a ten-minute walk of KEX Hostel, the Harpa concert hall, and the main bus connections to Keflavík International Airport. The airport bus (Flybus) stops at several city-centre pick-up points, and the journey runs approximately 45 minutes depending on the service selected , a practical consideration when booking late-night or early-morning flights, which are common on transatlantic routes into Iceland. Booking direct or through a reliable travel aggregator is advisable; Reykjavik's central hotel inventory tightens sharply in June, July, and August, and again around New Year, when the city draws significant visitor numbers for the fireworks tradition. For international comparisons at a similar apartment-hotel or extended-stay register, Aman New York and The Fifth Avenue Hotel illustrate how the format scales at the luxury end in a major city context, while properties like Aman Venice and Badrutt's Palace Hotel in St. Moritz anchor the European end of the premium residential-stay segment.