Center Hotels Arnarhvoll sits on Reykjavík's Old Harbour, close enough to Harpa Concert Hall to walk it in five minutes, and it ranks last on this list for an honest reason: it's the least dark-sky-capable property here. Reykjavík's street lighting and downtown glow sit between the hotel and the sky, and no amount of clever positioning changes that. If a strong aurora display is the actual goal, Hotel Rangá or Hotel Húsafell will show you more, on the same night, with the same solar activity.
What Arnarhvoll offers instead is a genuine city amenity: on request, staff monitor conditions overnight and phone your room if the aurora appears. It's a manual, staff-run service, not an automated forecast alert, so treat it as a safety net rather than a guarantee, and from most rooms you'll see a washed-out glow at best unless the display is strong. The SKÝ Bar on the 8th floor, with outdoor seating over Faxaflói Bay, is a better vantage than any window if the call comes.
Guests rate it 8.2/10 on Booking.com across 2,211 reviews, with a location score of 9.5/10, among the highest in the city, and rooms start around $135/night. This is the pick for travelers who want to stay in Reykjavík proper, near restaurants and museums, with a genuine hotel to come home to between guided tours out to darker skies, not for anyone chasing the best sky in Iceland.