Half of the population of Iceland lives in Reykjavík, meaning that there is much to do and see in Iceland's capital. You can also expect to find plenty of accommodation options.
There is a limited but decent selection of hotels available to suit any budget. Options include: Hotel Bjork, Hotel Vik, Icelandic Plaza Hotel and Centrum Hotel Reykjavík.
The city has been aggressively marketing itself as a tourist gateway to Iceland in recent years and the infra-structure has improved. You won't find a proliferation of popular hotel chains here but there are quite a number of choices. In the summer month all hotels might even be fully booked, so it's worth pre-booking.
Almost all visitors to the island stay in Reykjavík and make day trips to the remarkable scenery around the island. Be warned however, Reykjavík is not a cheap place to visit and this is reflected in the hotel prices too.
The following is a selection of websites offering hotel finding services and online booking for your convenience.
Reykjavík Hotel Partner Links - Reykjavík, Gullbringusysla, Iceland
Reykjavik Hotel Directory - Extensive list of Reykjavik hotels, combining hotels.com and expedia.com hotel databases