The Best Hotels in Iceland

Iceland is a place of dramatic natural wonders, from age-old glaciers and black-sand beaches to tumbling waterfalls and geothermally heated lagoons. Fittingly, the country is also home to spectacular hotels where visitors can take in all the beauty. From remote inns in view of the aurora borealis to hipster havens in Reykjavik, these lodgings bridge the gap between comfort and total surrender to your surroundings.

Hverfisgata 10, 101 Reykjavík, Iceland
On first glance, it would be easy to dismiss the 101 Hotel as merely a functional option. Stepping inside the austere five-story concrete building on Hverfisgata, however, guests discover an ultra-modern boutique lodging with minimal black-and-white decor—the work of owner-designer Ingibjörg S. Pálmadóttir—that gives it the feel of a chic downtown gallery. Contemporary paintings, photography, and sculptures by local artists appear througout the property, complementing the oak floors and wood-heavy Nordic furniture in the 38 rooms. Queen and king-size beds (there are no twin rooms) come topped with fine Italian linens, entertainment systems are state of the art, and open-plan bathrooms make extensive use of glass and offer Aveda bath products; deluxe rooms and suites up the ante with with claw-foot tubs. The hotel also has a moody restaurant and bar, a gym and spa, and a comfortable lounge area where you can put your feet up by the fire.
Suðurlandsbraut 2, 108 Reykjavík, Iceland
Despite being located just outside Reykjavik’s main center, the Hilton Nordica maintains its popularity thanks to its superb service and welcoming Scandi-mod interiors. Though working travelers tend to favor the property for its many functional conference rooms and business center, leisure visitors prefer to cozy up in a leather armchair by the fire in the plush neutral-toned lobby. The aesthetic continues in the spacious rooms and suites (the smallest is 300 square feet) with their calming, natural palettes, colorful photos of Reykjavik, and large windows that allow Iceland’s generous light to flood in; suites also enjoy separate lounge areas. The VOX restaurant serves gourmet New Nordic cuisine with an emphasis on Icelandic and Scandinavian ingredients, and the open-concept bar serves coffee, tea, and cocktails, and is a comfortable spot for lounging or mingling whether you’re coming in from a busy day of sightseeing or getting ready to hit the town.
Laugavegur 105, 105 Reykjavik, Iceland
Nicer than your average hostel, cooler than the typical chain hotel—this buzzy hybrid offers hostel-style dorms and more traditional accommodations in a 1930s Art Deco building on Reykjavik’s main drag. Designed by hotelier-owner Klaus Ortlieb (of New York’s Gotham Hotel and London’s Claridge’s), the hostel rooms are simple but smart, featuring metal-frame bunk beds, designer armchairs and sofas, and wood tables. The 18 hotel rooms are much more impressive, with elegant coffee-and-cream color schemes, king-size beds draped in Lissadell linens, and en suite bathrooms with C.O. Bigelow products. Most also come with private balconies that look out over colorful rooftops and mountain landscapes. The old-fashioned lobby and bar area—which is strewn with antique furnishings, exotic wall hangings, and leather sofas and armchairs—is a popular hangout for the city’s bright young things, but if you’re looking for something more low-key there’s an on-site movie theater with a carefully chosen selection of Icelandic films.
Pósthússtræti 11, 101 Reykjavík, Iceland
Commissioned and built by Icelandic wrestler Johannes Josefsson in the 1920s, Hotel Borg was one of Iceland’s first high-end hotels. Almost a century on—and despite a thoroughly modern refurbishment—it still exudes an atmosphere of old-world sophistication, with impeccably mannered staff and stately Art Deco touches such as globe lamps and brass-and-wood railings. The rooms combine comfortable leather chairs, polished parquet floors, and vintage photos of Reykjavik with modern conveniences such as Philippe Stark fittings in the marble bathrooms and Samsung smart TVs in the suites and superior rooms. The location is unbeatable: right next to the Icelandic parliament on pretty Austurvöllur Square, with ample opportunities to explore the city’s culture or world-famous nightlife.
356, Íþróttahús Snæfellsbæjar, Engihlíð 1, 355 Ólafsvík, Iceland
About a two-hour drive from Reykjavik, Hotel Budir’s remote location makes it popular with visitors hoping to spot the Northern Lights. Situated near a windswept beach beside the mighty Snaefellsness glacier, the property’s raw natural surroundings contrast beautifully with its romantic interiors, which pair features like leather and velvet furnishings and polished wooden floors with decorative touches that include sepia photos, stocked bookshelves, and picture windows perfect for enjoying the scenery. The rooms skew more modern, with earthy tones and contemporary furniture. The hotel restaurant is by far the best in the area, and the bar is cozy enough to encourage lounging. Upstairs is a common area with sofas, a fireplace, and yet more great views.
F 26, 851 Hella, Iceland
Named after the fast-flowing river that runs alongside it and located just an hour from Reykjavik in the middle of an isolated, windswept plain, Hotel Rangá is an immediately homey place. Built in a log-cabin style, the country lodge embraces its surroundings with neutral color schemes, comfy leather sofas, and natural textiles. Quirky extras include a 10-foot stuffed polar bear that greets guests in the reception area and stools with human-like legs in the bar. Standard and Deluxe rooms face either the East Rangá River or the famous Mount Hekla volcano, while suites are designed and themed around the seven continents. But right here is where you want to be. The hotel has an observatory with a retractable roof and high-powered telescope for stargazing, plus some of the darkest skies in Iceland.
Vogafjós, 660 Myvatn, Iceland
Built in 1947 on the banks of Lake Mývatn, this intimate, family-run hotel exudes traditional charm despite its nondescript exterior. The nine country house–style rooms are simply furnished, with peach-and-orange walls, wood floors, and beds dressed in crisp white linens; higher-level rooms come with great views of the lake’s crystal-clear waters and compelling lava formations. On the ground floor, a lounge and breakfast room is served by friendly, helpful staff, making it difficult to leave. But on warm days you can sit at one of the outside tables and watch Icelandic horses graze nearby, visit the adjacent village, or explore the surreal landscapes and rich birdlife that mark this remote region.
Nesjavellir 801, 801 Nesjavellir, Iceland
Nestled within a landscape of moss and lava less than an hour from Reykjavik, the Ion Adventure Hotel is one of the few true luxury hotels outside of Iceland’s capital. Under the careful eye of owner Sigurlaug Sverrisdóttir, a no-frills barracks for geothermal power plant workers was transformed into a concrete-and-glass Nordic-modern showpiece that wears its reverence for the natural setting on its sleeve. Sverrisdóttir is committed to using local products—everything from the artwork to the bath products to the food are sourced from the area—and the hotel’s sustainable materials and practices, like using geothermal cooling for power, have earned it a number of awards. Plus, all 45 of the sleek but comfortable rooms feature fair-trade organic linens and floor-to-ceiling views of Lake Thingvellir or Mount Hengill, an active volcano. The glass Northern Lights Bar juts out toward the horizon, providing a perfect viewing spot when the aurora borealis appears; beneath it sits a large rectangular hot tub adjacent to the spa. As for adventure, the hotel is happy to arrange any number of excursions, including fly-fishing, horseback riding, kayaking and, for the truly bold, snorkeling in the Silfra fissure.

Austurstræti 16, 101 Reykjavík, Iceland
Built in 1907 by the same architect who designed the National Theatre and Hallgrímskirkja church, Apotek is full of historical resonance. The Art Nouveau–style building was once the country’s largest edifice and served as the city’s primary pharmacy from 1930 to 1999, a distinction that gave the hotel its name when it opened in 2014. The property’s 45 rooms blend elements of the past while seamlessly incorporating modern design touches, employing neutral colors, parquet floors, and simple-but-refined furnishings to create a sense of calm; subway-tiled bathrooms with walk-in showers have a bright, clean look. You don’t have to wander far to enjoy one of the busiest watering holes in Reykjavik: Apotek Kitchen + Bar is a hot spot for artisan beverages, where cocktail “pharmacists” craft potions for every ailment. Bonus: Not only does it overlook the Austurvöllur park, it’s just around the corner from the Icelandic Punk Museum.
Laugavegur 66-68, 101 Reykjavík, Iceland
What do amenities mean in the age of the millennial traveler? At the stylish yet understated Alda Hotel, guests receive a complimentary Android phone that’s preloaded with apps to help you explore the city, from the hottest new restaurants to the best shops for Icelandic wool. If your beard needs a trim, a barbershop is connected to the hotel by way of the Barber Bar, so clients can settle into the chair, craft cocktail in-hand. Rooms are sleek and spare, in Nordic hues of gray and white with an occasional splash of color; all bathrooms have contemporary walk-in showers, while upgraded rooms also feature large soaking tubs. Rooms on the third floor enjoy views to the mountains and North Atlantic, while those on the fourth floor have access to a rooftop terrace with city, mountains, and ocean vistas. The Alda is just a few minutes’ walk to downtown (including the pickup spot for most tours) and to the seafront; at the end of the day, the outdoor hot tub is a perfect way to relax and inhale the clean Icelandic air.
Nordurljosavegur 11, 240 Grindavík, Iceland
Why we love it: An exclusive oasis, sheltered from the crowds that have descended on Iceland

The Highlights:
- Access to a new, private area of the Blue Lagoon reserved just for hotel and spa guests
- Rooms with floor-to-ceiling windows and lagoon views
- Custom toiletries made with geothermal seawater

The Review:
As Iceland’s popularity exploded over the last decade, the Blue Lagoon gained a bad rap for being a crowded tourist trap. However, the spring 2018 opening of The Retreat at the Blue Lagoon transformed a corner of the UNESCO-recognized Reykjanes Peninsula from a tourist attraction into an intimate hideaway, perfect for those who want to experience the mineral-rich waters in a cell phone–free private lagoon away from the selfie stick–wielding crowds next door.

It’s easy to spend the entire day here floating in the three newly created geothermal pools located within 800-year-old lava rock (don’t miss the unusual—yet deeply relaxing—underwater massage), but when you eventually have to go indoors, floor-to-ceiling windows allow the bright blue waters and the surrounding volcanic landscape to take center stage. Minimalistic-yet-cozy communal spaces, designed by Basalt Architects and Milan-based Design Group Italia (DGI), are equally pleasing to the eye, especially the living room–like lobby, which is decorated with oversized leather chairs and a 1,600-piece collection of ceramics from the Icelandic Museum of Design & Applied Art. Sixty-two guest rooms—all with deep stand-alone tubs and rain showers—look onto the lagoon or the surrounding lava fields (though don’t try swimming in this part, as it’s been intentionally left unheated so that you can enjoy the view with complete privacy). Before you check out, follow our lead and swipe the toiletries made with geothermal seawater sourced from the on-site volcanic aquifers.

When hunger strikes, guests can enjoy casual, healthy meals at the spa restaurant, or head upstairs to Moss for a seven-course meal at the chef’s table, hewn from lava rock quarried on site. It’ll likely still be light outside when dinner is over, so change into your swimsuit for a dip in the lagoon, which stays open until midnight for hotel guests (in winter, you might even catch the northern lights). After a breakfast of Icelandic skyr and house-made gravlax, venture farther afield to the nearby town of Grindavik to ride an ATV through the volcanic landscape. Retreat hosts can also take guests on guided hikes up the dormant volcano behind the property.
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