26 Best Hotels in Iceland

This sleek, minimalist boutique hotel has put Blönduós on the map as a culinary destination, as its owners are also authors of the fabulous Icelandic cookbook Into the North. The hotel also hosts workshops on Iceland’s food history and intimate dinners by a supersize window that frames epic sunsets during the summer and regular displays of northern lights in the darker months. Each of the rooms has a distinctive character presenting a refreshing mix of both new and old.

The loudest noise you'll hear at this beautiful 1890 house is birdsong, and although luxury amenities are not the focus, there's no substitute for the coziness of staying at this family's home. You can reserve a double room or a larger room if traveling as a family.

For a little rural respite in a remote location—with sea views—head to this guesthouse, where you can combine the thrill of the great outdoors with a stylish, boutique design and all the creature comforts you need.

It's the only accommodation on the entire island, but luckily Hotel Flatey is a beautiful property with a lot of charm. The hotel staff will offer to transport your luggage from the ferry to the house, but you can also handle it the local way: in a wheelbarrow. Your days here will be filled with birdsong from the arctic tern and scenes from the surrounding ocean. The hotel has teamed up with Seatours Iceland to offer a discounted room rate with the purchase of a round-trip ferry ticket.

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.

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.

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.

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.

One of the very few options for lodging in Hólmavík, the Finna Hotel has basic amenities; if you're not looking for luxury, you'll find it perfectly suitable. The hotel itself is pretty basic, but breakfast is included in room rates, which are already very reasonable. The walls are a bit thin, making it easy to hear other guests, but you can't argue with the value for the location.

You have three options at Fossatún Country Hotel: booking a room in the main hotel, staying in the communal guesthouse, or renting a camping pod. The latter is a tiny home of sorts—a primitive (but solid) structure; it resembles camping but takes you a step out of the unpredictable Icelandic weather. The owner of this property is a writer, whose stories tell about trolls and the hotel's setting. A number of self-guided walks reveal the local inspiration behind his tales.

At this unique and artistic guesthouse on a quiet street, each room is special and made out of driftwood and volcanic stone. The hosts go out of their way to make guests feel welcome and offer airport pickup with advance notice.

Located in the beautiful Flóahrepp countryside, right along Route 1 near Selfoss and Hveragerði, this guesthouse with views over the mountain Hekla was initially built as a women's prison (though those plans were never realized).

The “Golden Sun” guesthouse is conveniently located right next to the harbor with fresh, modest rooms and a shared guest kitchen. There’s a coffee shop downstairs and a gallery selling local handicrafts, hand-knitted sweaters, hats, mittens, and souvenirs.

This beyond-charming guesthouse has five rooms, two communal sitting areas, a library, and a big garden with views of the nearby fjord. This is the place to go if you want to feel like family far away from home.

A small, family-run hotel located between the two greatest waterfalls of the South, this romantic, old-fashioned spot serves excellent meals made from local ingredients in their restaurant.

The family-run Hotel Breiðafjördur, which was the first schoolhouse in the village in 1897 and later a bakery, offers both private rooms and hostel-style accommodations. There is private parking included with your room or bed rate, and each guest gets a complimentary hot beverage—ideally taken on the balcony while reflecting on your day's highlights.

The striking views are the main attraction here, but the simply decorated guest rooms are a comfortable place to lay your head after a day of hiking the nearby mountain or fishing at the harbor. There are options for shared or private bathrooms, and the hotel staff can help set up activities for your stay.

You've got options at Hotel Laxarbakki: there are single, double, twin, and family rooms as well as a charming cottage. With a children's playground, hot tub, and sauna on-site, there's something for everyone.

Drive 10 minutes from the center of Borgarnes and you'll find yourself at the cozy Kria Cottages, three accommodations owned by a local family. The cabins are simple, and the location can't be beaten: you're close enough to town to take advantage of shops and bus stops, yet Iceland's renowned natural beauty is just a quick walk away.

In a modern yet cozy guesthouse in Stokkseyri are two bright apartments—one that sleeps up to five people and the other seven. Of course, beautiful mountain views and access to a hot tub are also included. 

This rustic Norwegian wood house has 11 bedrooms with a handful that share bathrooms. Built in 1894, it was renovated in 2004 and currently gives travelers a place to rest after spending the day exploring nearby sights like Hraunfossar, hiking, golfing at Hamarsvöllur, and horseback riding.

Located at the foot of Akrafjall Mountain, there are no bad views at this guesthouse. Moar offers up rooms or cabins for guests passing through the area. There's also a local swimming pool nearby as well as plenty of hiking trails.

These modest yet beautiful country-inspired cottages are located just a few steps from the North Atlantic Ocean. Expect a romantic and quiet stay that is very close to everything you need in this charming small town.

Located smack-dab in the center of town, Sýsló Guesthouse has great hilltop views of nearby Breiðafjörður Bay. With close access to the town's museums, restaurants, bars, and historic homes, you can't go wrong embarking on a stroll through the winding streets. Sýsló Guesthouse is owned by the same people who run the nearby Hótel Egilsen, which is where you have to go to check-in.