Iceland

It's so compact that it doesn't matter...even if you stay a bit on the periphery (some hotels are there), you can take a local bus or walk 15-20 min. It's very easy to get around on foot.

Thank you Agnes!

Carl, you might also want to be aware that in summertime when it pretty much never gets dark, and especially on weekends, it can be pretty noisy in some central neighborhoods late into the night. There's something to be said for looking for lodging a bit away from the center, at least not too close to public gathering spots. I had a nice apartment on Ingólfstorg, and the noise level was pretty high until about 2 or 3 in the morning. I would think if you get just a few blocks away from any of the squares in the center, you'll be fine.

hi

i went to Iceland in 2015 and the city itself is small.. you can walk the whole capital,, a 15-20 block radius.. in 1 hour or 2...

i stayed at reykjavik natura, which is little bit south of the downtown area, walkable distance about 20 minutes..but very nice area, lovely hotel, quiet, with restaurant and spa in the hotel.
best thing they had daily shuttle/bus to downtown area.. and the hotel gives you a free day pass for all the days you stay there.
staying in downtown would be ideal.. but know that iceland is expensive and whatever you can save, it will be towards the food, shopping and tours..
so $$ save whenever you can.

enjoy

It's not big and not old, so you can probably pick anywhere. Either close to a sight or close to a bus to the airport. I've only stayed at the Base hotel. It wasn't bad but it's close to the airport rather than the city.

On our trip 2 years ago, we got a deal on the Icelandair Marina Hotel, located right at the harbor, just down the street from the Harpa Hall, lots of restaurants, the Tourist Information office, the Volcano House, the whale watching tour dock, etc. It was a great location for us, and for what it's worth, not quite in the same place where most of the rest of the hotels seemed to be situated. I understand that they've done a remodel and an upgrade since then, though, and that their prices are now a lot higher -- maybe still worth the price though. they also had a free (unpaved) parking lot. Are you renting a car? Walking? Using public transportation?