Best hotels in Iceland

Iceland’s awe-inspiring landscapes and adventure activities make this frozen land one of Europe's hottest travel destinations. And with summer hotel accomodation in seriously short supply, winter is a great time to head to this rugged, spellbinding island.
Hotel Rangá, Iceland. Photo: Lodgingeo
Hotel Rangá, Iceland. Photo: Lodgingeo

The off-season in Iceland is winter, when there are fewer visitors travelling to the island. Accommodation is more readily available and hotels are less expensive, including guest rooms in the most sought after establishments in Reykjavík and the popular south west. Here is our guide to the best hotels in Iceland.

Hotel Borg by Keahotels

In a landmark 1930s building overlooking leafy Austurvöllur square in the heart of Reykjavík, Hotel Borg is within walking distance of the Cathedral of Christ the King and the bars and restaurants of Laugavegur shopping street. Refined, spacious rooms with parquet floors blend art deco style with designer furnishings and premium contemporary amenities. Suites add lounge areas and views over Austurvöllur square. A Jamie’s Italian restaurant occupies a grand ground floor dining room with a ceiling mural, and there's a stylish spa complete with a hot tub, steam bath, sauna and fitness room. 

Hotel Borg by Keahotels.Hotel Borg by Keahotels, Reykjavík. Photo: Lodgingeo

Canopy by Hilton Reykjavík City Centre 

Steps away from shopping and dining options on Laugavegur street, Canopy by Hilton Reykjavik City Centre hotel occupies six connected modern houses a short walk away from eye-catching Hallgrimskirkja cathedral. Contemporary guest rooms in organic tones feature chic furnishings and memory foam beds to aid a restful night’s sleep. Many also offer sweeping mountain or sea views. Stylish Geiri Smart restaurant serves delicious local cuisine and is complemented by a bistro bar and a café with industrial details. The hotel offers bikes so you can explore the city on two wheels, while the on-site fitness centre means you can stay in shape during your visit.

Hotel Ranga

Overlooking the Ytri-Rangá River, the log cabin-style Ranga Hotel sits surrounded by the pristine windswept countryside of South Iceland, a 90-minute drive from Reykjavík. Homely guest rooms with wooden floors and walls feature comfortable furnishings and sumptuous double beds – some also have whirlpool baths. The light-filled restaurant serves a gourmet menu of modern Nordic cuisine prepared from seasonal local produce. Guests can relax in a spacious, rustic-chic lounge bar with river views and a games room with a pool table. And there’s a first-floor balcony – perfect for viewing the starry night sky, or if you’re lucky the Northern Lights. To view the stars and planets in detail, there's even an on-site observatory with two telescopes. To unwind, Icelandic style, enjoy a soothing soak in one of three outdoor hot tubs, each set on its own wooden deck overlooking the river.

Hotel Rangá, Iceland.Hotel Rangá, Iceland. Photo: Lodgingeo


Amid the boutiques and restaurants lining Reykjavik’s main street Laugavegur, the understated Sandhotel occupies an historic townhouse that was the birthplace of the much-loved, late Icelandic author Halldór Laxness. Paintings and photographs by contemporary local artists hang in the elegantly furnished lobby. Exquisitely designed guest rooms feature hardwood floors, stylish desks, and premium quality fabrics and bed linens, as well as bluetooth speakers and Nespresso coffee machines. Suites add sitting areas with comfortable sofas, coffee tables and tasteful lighting. The compact hotel bistro is supplemented by the neighbouring Sandholt bakery and a host of nearby restaurants.  

Fosshotel Glacier Lagoon

An easy drive from the breathtaking natural beauty of Jökulsárlón Glacier Lagoon and Skaftafell National Park, the Fosshotel Glacier Lagoon is set in a striking, modern wood-panelled building, surrounded by stunning untamed scenery just off the Route 1 ring road. Spacious, minimalist rooms with countryside or mountain views through large windows, come with smart TVs and free Wi-fi, while suites add lounge areas and even bigger windows. The airy, high-ceilinged restaurant, featuring designer furnishings and pendant lights, serves enticing Nordic cuisine prepared from local produce, complemented by an impressive wine list.

Fosshotel Glacier Lagoon.Fosshotel Glacier Lagoon, Iceland. Photo: Shutterstock

101 Hotel

Moments away from a choice of Reykjavik restaurants and museums including the National Gallery of Iceland, the boutique 101 Hotel occupies a low-key city centre building. The hotel’s lobby and public spaces, however, are a celebration of cutting-edge contemporary design in monochrome, showcasing striking one-off pieces of furniture and artworks by Icelandic artists. Meticulously furnished rooms feature hardwood floors and comfortable beds with premium quality linens, as well as satellite TVs, Bang and Olufsen Beoplay speakers, and complimentary high-speed Wi-fi. Some have balconies and/or waterfront views. The chic Kitchen & Wine restaurant serves gourmet small plates and modern Icelandic cuisine, in an airy space with skylight windows and a long bar. The hotel's luxurious offering is completed by a basement gym and spa, where guests can fully relax in a steam bath and Jacuzzi.

Ion Adventure Hotel

Set amid the dramatic volcanic scenery of Thingvellir National Park, the remote ION Adventure Hotel occupies a renovated former inn for workers from the nearby Nesjavellir Geothermal Power Station. The remarkable structure protrudes from the mountainside, supported by huge pillars. Chic, minimalist guest rooms with hardwood floors and concrete walls feature sweeping views of the surrounding countryside or power plant, and come with luxury beds, designer desks and organic toiletries, as well as large TVs, ipod docks and free Wi-fi. A lounge bar with floor-to-ceiling windows offers creative cocktails and craft beers, while the spacious light-filled restaurant serves a menu of modern Icelandic cuisine emphasising sustainable, local produce. A fitness room and spa are complemented by a covered, geothermally heated outdoor pool.

Ready to take a trip to Iceland?

Our local experts can plan incredible trips to Iceland for you, from start to finish. To get started, simply get in touch letting us know when you'd like to go and your ideas for the trip. We will then create a tailor-made itinerary especially for you, which you can amend until you are completely happy with every detail before you book. You can browse our existing itineraries for inspiration. And keep in mind that all of our pre-planned itineraries can be personalised to suit your needs.