I stayed here quite a while ago (2003) but I always remember this place as one of the best hostels I've ever been to.
First of all, it was easy to find and parking was available and free. The walk into town is very short and easy. The owner is a native to Akureyri and was very friendly--especially for an Icelander!
Admittedly, it was the off season so the hostel was hardly crowded, but the entire place was spotless! Also extremely comfortable. Of course, like lots of Scandinavian places, it looked like it was furnished in 100% IKEA but that was okay. The kitchen was clean, there were two common rooms (one with a TV, one with tables and chairs and some books--there was also a trivial pursuit game but it was in Icelandic so that wasn't so useful to us!)
The rooms were simple but nice and the bathrooms and showers were great. This is one of those hostels that makes you wonder why anyone ever pays more money for a hotel room.
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