171 Best Hotels in Iceland

Although there's hardly any lodging in Dragsnes, Malarhorn really hits a home run when it comes to variety, as guests have a choice between three houses: House 1, with 10 double rooms that have private patios and bathrooms; House 2, with four double rooms that share a living room and kitchen; and House 3, with a family-size room, a two-bedroom apartment, four double rooms, and a superior double room with private entrance. Breakfast will cost you extra.

Evidence that Icelanders will renovate almost any building to turn it into a guesthouse, the Milk Factory was once—you guessed it—a milk factory, and the stylish redesign has resulted in modern, minimalist rooms, including family rooms that sleep four (with beds on a mezzanine level). It's a friendly place with thoughtful touches, and it's open year-round.

The photogenic cluster of small red cottages by the shore on the east side of the fjord belongs to Mjóeyri—a local family-run travel service offering accommodations and activities. Apart from the cottage accommodations, you can also stay in the main guesthouse (cheaper rooms with shared bathroom). Views from the property are sensational, especially from the small boat that's been converted into a hot tub.

The interior of this hotel would look right at home in a Wes Anderson movie; there's a wide range of room styles to fit groups of different sizes—family suites even include private kitchenettes. If a cute, design-forward hotel is what you're after, check out Oddsson.

Upstairs from a historic bookstore, you'll find this small, family-owned guesthouse that offers a unique insight into life in an Icelandic fishing village in the 1960s, with its carefully sourced period-appropriate furnishings and knickknacks. You can help yourself to breakfast in the fridge in the well-stocked kitchen. A variety of board games, books, and comics are available (although much of it is in Icelandic). 

One of the most luxurious accommodations in the entire county, the Blue Lagoon's Retreat Hotel offers true serenity set among understated luxury. Carved directly into a centuries-old lava flow, the high-end abode offers a subterranean spa and Michelin-starred dining right on-site. Guests have unlimited access to the spa's private lagoon as well as additional access to the public Blue Lagoon. Rooms overlook either the lagoon or stunning volcanic rock formations; some even have their own private hot pools. They also come equipped with luxe linens, a complimentary minibar, walk-in rainfall showers, and high-end Blue Lagoon toiletries. A delicious breakfast is available daily as are yoga classes and an afternoon Icelandic coffee service. 

From the moment you step into this hotel, you'll know you're somewhere special: the staff is friendly and alert, the on-site spa is worth a visit, and the rooms showcase the best of Scandinavian design. Rates may surpass those of nearby hotels, but this is Reykjavík's sole five-star hotel, and it shows in the level of service and quality of amenities. Its location near the harbor welcomes after-dinner strolls or early morning meanders.

Located right in the center of Reykjavík, the Sand is one of the more luxurious hotels in the city. Art deco details set the scene, and supersoft beds seal the deal. This modern boutique hotel offers a complimentary breakfast buffet, as well as a gym and a bar. Next door you'll find Sandholt, known as one of the best bakeries in the country.

There’s a touch of class, but not a trace of pretension at Sigló Hótel, which is named after the endearing title given to the town by its locals. Beautifully decorated with a timeless, traditional design, the hotel is warm and welcoming and staffed with genuinely lovely people. Rooms are immaculate with luxury linens, but to tempt you there’s a cozy lounge and an excellent restaurant, plus a bar serving tasty cocktails.

Right by the root of a mountain lies this horse farm that has been in the same family for seven generations and their meticulously built, incredibly cozy yet luxurious manor. Romantic rooms have country-French decor. They also offer personal and group horse riding trips to the nearby waterfalls and black beaches.

Located within the old village school, Sólbrekka Guesthouse offers basic accommodations (mainly bunk beds) for a limited period during the summer. Apart from the few rudimentary rooms, amenities include Wi-Fi and cooking and laundry facilities. If you're looking for something roomier, two cozy wooden cottages (each sleeping four people) are found further up the hill. The cottages are perfect for seclusion and spectacular views, especially from their private hot tubs. Want even more seclusion? Winter packages (with boat trip and cottage hire) are also possible. 

Despite being in a simple turf house, the Torfhús Retreat is one of the most luxurious hotels in all of Iceland. Mixing heritage Icelandic style with modern amenities and true high-end service, a night in one of their delightfully rugged guesthouses will be one you won't forget. Their basalt stone hot pool is also a nice touch. 

A gem of a guesthouse, Við Lónið has gorgeous rooms featuring either beautiful views over the fjord or the charming scene over Rainbow Road. The cozy tungsten lighting and oil paintings add warmth and a touch of vibrancy to the classy, minimalist Scandinavian design. Rooms facing toward the fjord have private balconies.

This 19th-century historically restored old farmstead offers the unique opportunity to \"sleep in a museum\" with the option of staying in the Landowner’s Suite, rooms in the old farmhouse, or in \"bed closets\" aka unique dorm-style beds with an authentic, yesteryear feel. There's also an additional building featuring rooms with private facilities, still decorated in keeping with the farm's vintage vibes. Stays at the Wilderness Center include free admission to their lovely bathhouse, with a hot spring spa built from stone. Home-cooked meals are available for an extra price. 

At this five-story hotel designed by owner Ingibjörg Pálmadóttir, contemporary works by renowned local artists adorn the walls (the hotel also hosts exhibitions), and large, open-plan rooms are well appointed, with big, comfortable beds, American oak floors, and (in some) freestanding baths. The restaurant--bar serves killer cocktails beneath a dramatic glass ceiling. The cozy lounge and library area boasts leather sofas and an open fireplace. Massages can be arranged in your room, and in the basement you'll find a sauna, Jacuzzi, and small plunge pool.

As the name implies, this hotel caters mostly to adventure tourists and outdoorsy types, and tours---both private and large groups---can be booked through them. They serve breakfast and dinner and offer rudimentary but good quality rooms as a pit stop to your next adventure. 

At this lovely hotel along Laugavegur, guest rooms are decorated in a typical Scandinavian-chic style, with a combination of rich, earthy tones contrasted with fresh, crisp whites and the occasional splash of vibrant color. There’s a tidy collection of amenities, including a hot tub and a gym. The atmosphere is thoroughly social in the comfortable lobby area, where a confectionery sells exquisite Icelandic chocolates and the aptly named Barber Bar serves cold beer with your haircut.

The art deco architecture that lends this hotel's exterior its curb appeal carries into the guest rooms. Though small, the rooms here are comfortable and keep you within close proximity to everything Reykjavík has to offer.

An excellent place to stay by the Svartá river, this mountain hut operated by Íslandshestar has beds for 30 people and stable facilities for those traveling by horse. There is also a cozy café called Kaffi Kjölur selling food, beer, and wine. If you're staying the night, you'll need to bring a sleeping bag or you can rent one here.

This cozy bed-and-breakfast offers a tranquil retreat in the countryside. With just four guest rooms and two shared bathrooms, the atmosphere is intimate and welcoming. The homemade breakfast is a particular highlight.

Located in a lovely old house next to the airport, Básar is a clean and comfortable no-frills guesthouse with helpful and friendly hosts. There are shared guest kitchen facilities and complimentary tea and coffee.

The area's leading hotel is where the cast and crew of Game of Thrones stayed when they filmed in this region; it's still on the fancy end of the spectrum, with a signature design of modern Nordic-chic, combined with upcycled vintage wares and local art. Be sure to visit the on-site eatery, Mylla Restaurant, a destination in its own right. 

Attention to service, detail, and atmosphere define this harborside hotel, which—thanks to its cocktail bar and bistro—also serves as a popular dining and nightlife spot for locals. Seeking to engage its guests at every opportunity, the hotel presents a curious collection of vintage knickknacks throughout the lobby, the lounge, and beyond. Guest rooms are crisp, clean, and efficiently designed. Each has its own little quirks, but homage to the fishing industry is a recurring theme. Views from the even-numbered rooms are impressive and stretch right across the bay.

Accommodations at this hotel nestled between the verdant Öskjuhlíð hill and Reykjavík's domestic airport, a stone's throw from Reykjavík's geothermal beach, are comfortable and modern. With all its great amenities—including a library, a gift shop, a spa, the solid Satt restaurant, and countless conference rooms and halls—this hotel generates a compelling microculture. 

On the outskirts of Borgarnes, you'll find this guesthouse, which manages to give you the convenience of being near town yet the quiet of being in the middle of nowhere at the same time. There are different-size rooms in the main house, but you can also rent a private house behind the farm if you're traveling with a larger group. Way back when, the rooms in this guesthouse served as stables, barns, and poultry houses. There is a private wing that includes a double room and two family rooms with shared bathrooms and a separate kitchen.

For a more authentic local experience, you can do a homestay at Blómasetrið, which also has a café and gift shop on-site; or, for a little more privacy, you can stay in one of the apartments. No matter where you're sleeping, though, you can count on incredible views of Mt. Hafnarfjall. At the family's home, you can choose between three rooms: Caring & Friendship (twin room), Love (double room), or Peace (the family room). There is one two-room apartment available to book as well as two studio apartments, Traustastofa and Freyjubrunnur.

Hidden in the trees in Reykholt is this charming wooden cottage with cozy rooms. The owners are very attentive and warm, and they serve a great breakfast buffet.

Set amid big, bucolic landscapes about 13 km (8 miles) south of Djúpivogur, Bragðavellir is a family-run farm with a collection of cozy timber cottages, with one or two bedrooms. Each has a small kitchen, though the farm has a Barn Restaurant open in the summer that showcases local ingredients. 

For a once-in-a-lifetime experience, sleep under the northern lights or the midnight sun in a luxurious bubble, with unforgettable nighttime vistas. Nicknamed the “five million star hotel,” this hotel provides a unique experience you won't soon forget.

If being centrally located is your main priority, this hotel is a good option. It's also packed full of local art and other creative touches to infuse character around every turn. Just remember this means the area is full of bars and nightclubs, which can get noisy on the weekends.