We're arriving in KEF at 11:55 pm. Our flight leaves at 3:30 pm the following day. Is there enough time to enjoy Blue Lagoon? Can we just stay at the airport & take the first bus to Blue Lagoon?
Just hit the Blue Lagoon a few hours before your outbound flight the following day, so you don't have to do any backtracking between Reykjavik and the airport. Flybus is coordinated with all Iceland Air flights and can include a stop at the Blue Lagoon (just Google "Flybus" and look at their trip packages). Personally I wouldn't stay near (or at) the airport, Reykjavik has a lot more things to do (it's a 45-min bus ride from the airport one-way).
Thanks for your rresponse. Do we book a hotel near the airport since we're arriving close to midnight. Or do we book one that's close to the Blue Lagoon. We plan on staying till 12 noon at the BL. Is that enough time to enjoy BL & make it to our flight at 3 pm?
If it were me, I would book a hotel near the airport since you're there for such a short period of time. I stayed at the Aurora Star on my last night there, since my flight was leaving so early, and found it perfectly acceptable - very clean and comfortable. The best thing is that you can walk to the airport from the hotel - it's about a 2 minute walk to get there. In the morning, you can leave your luggage at the hotel, take a bus to the Blue Lagoon and then head back to the airport.
If you want to eliminate a few extra minutes, you can take your luggage to the airport before you head to the BL and leave it in luggage storage - that way you can go directly from the BL to the airport.