29 of the Coolest Hotels In Iceland (By Region)

I have personally handpicked the coolest hotels in Iceland! 

Picking a place to stay in Iceland while driving around the Ring Road has been a challenge for me, and that’s why I want to share with you the most unique and coolest hotels in Iceland that I personally researched. 

If you’re never been to Iceland before, you have no idea what’s going to happen. 

So, let me spill the tea before you get too panicked about the hotel situation. 

The truth is that most hotels in Iceland are built for functionality but don’t necessarily appeal to those looking for photogenic architecture or authentic Icelandic spirit. 

In this extensive list of the coolest hotels in Iceland, I only added hotels with a story, personality, and breathtaking views. All of these unique hotels in Iceland promise a once-in-a-lifetime experience and will make you addicted to Iceland. 

Most of these hotels are in remote locations in Iceland, which makes them also some of the best hotels in Iceland to see the Northern Lights, aka Aurora (from September to April). 

Tips for booking the coolest hotels in Iceland

Iceland is a marvellous destination, and it’s like nothing you’ve seen before. 

Considering how beautiful all corners of this country and the large crowds it may attract, there are some tips I want to share with you to increase your chances of booking one of these unique hotels: 

• Book your stay well in advance (some hotels should be booked 6 months in advance)
• Some hotels have a mandatory 2-night stay or longer
• Take notice if the hotel has its own restaurant, a kitchen you can use or if you need to bring food for the evening
• Check the hotel’s policy for breakfast
• Check if the hotel is open all year round (some more secluded hotels may close during winter, given their remote location)

I have an exhaustive list of Iceland travel tip, and I recommend that you check that out too. 

For more help for your next trip to Iceland, check out my guide about planning a trip to Iceland. 

Now, let’s dig into this massive list of the top unique and cool hotels in Iceland. To help you better plan your trip, I have already categorised them based on their location.  

Check out other helpful Iceland blogs:

• Iceland 5-day road trip itinerary
• One week road trip itinerary in Iceland
• Iceland 2023 volcano eruption hiking trail
• Travelling in Iceland without a car
• Most popular hiking trails in Iceland

Reykjavik area

Apotek Hotel

Address: Austurstræti 16, 101 Reykjavík

This famous hotel is set in one of Reykjavík’s oldest structures, designed by the celebrated Icelandic architect Guðjón Samúelsson. He’s the same genius behind landmarks like the National Theater and the Akureyrarkirkja church. 

The building used to be a pharmacy, which explains the hotel’s name, and it’s perfectly situated in the heart of the city, right across from the Icelandic parliament in Austurvöllur Square. 

While you’re there, don’t miss the top-notch Apotek restaurant and the cosy hotel bar on the first floor. After that, head back to your stylish room or suite for some rest and relaxation.

Kvosin Downtown Hotel

Address: Kirkjutorg, 101 Reykjavík

Kvosin Downtown Hotel is right in the middle of Reykjavik’s most iconic spots like the Icelandic Parliament, Dómkirkja Church, and City Hall. Located in a building from the early 1900s, the hotel blends modern, simple design with its historic charm. 

Start your day with a delicious breakfast at the nearby restaurant, Bergsson Mathús, before you head out to explore Reykjavik. When you’re back from your adventures, unwind with unique cocktails at the hotel’s ground-floor Aldamót bar.

Hotel Borg

Address: Pósthússtræti 11, 101 Reykjavík

Hotel Borg is a gem in Reykjavik that will captivate you with its unique art-deco style, both inside and out. Established in 1930, it’s Iceland’s oldest luxury hotel, promising top-notch service throughout your stay in the capital city.

With 99 rooms, the hotel perfectly blends modern amenities with its historic art-deco charm, a look it has lovingly maintained for over nine decades. Here, you’ll find stylish art-deco furniture, sleek wooden flooring, and luxurious fixtures by Philippe Starck.

Located right in the heart of Reykjavik, Hotel Borg has prime views of the Icelandic parliament and cathedral, situated in Austurvollur Square. So, after a busy day exploring the city, you can easily return to the comfort of your chic room at Hotel Borg. Want to kick back even more? Spend the evening unwinding with saunas, steam baths, and hot tubs at the Borg Spa.

This might not be the boutique hotel in Iceland that you were expecting, but you can’t deny that it is one of the coolest hotels in Iceland. 

Golden Circle area

Hotel Geysir

Address: Haukadalur 806, Geysir

Hotel Geysir stands out as one of Iceland’s coolest boutique hotels, and it’s easy to see why. Situated right in the middle of the famous Golden Circle, it boasts views of the Haukadalur Geothermal area and is just a stone’s throw away from the Great Geysir, one of Iceland’s must-see attractions.

Blending modern design with the natural beauty of the Golden Circle, the hotel’s exterior is strikingly elegant. Inside, you’ll find 77 rooms and six suites, all featuring panoramic glass windows that showcase the scenic countryside. The rooms are decked out in calming, earthy hues and furnished for maximum comfort, making them the perfect place to unwind after a day of adventure.

For dining, the Geysir Restaurant offers a taste of authentic Icelandic cuisine. From slow-cooked lamb and hearty stews to fresh seafood, the seasonal menu has it all. But the real showstopper is the geothermally baked bread, a unique treat you won’t find anywhere else.

Though you’re a quick drive from Reykjavik, Hotel Geysir transports you deep into Iceland’s untouched wilderness. Besides being within walking distance of the erupting geysers, you’re also close to other natural wonders like Gullfoss Waterfall, Thingvellir National Park, and endless landscapes of volcanoes and glaciers.

Hotel Grimsborgir

Address: Ásborgir 30, 805 Selfoss

Looking for a five-star escape in the middle of nowhere? Hotel Grimsborgir is your perfect hideaway, where every guest gets access to a personal or communal outdoor geothermal hot tub. With a total of 29 hot tubs, you’re set for a luxurious soak, ideally situated for viewing the Northern Lights in the night sky above.

But you won’t be spending all your time in the hot tub. Each boutique room, suite, and apartment comes with its own private terrace or balcony. And the views are bound to take your breath away as the hotel sits in the heart of Iceland’s Golden Circle. 

You’re just a quick hike or drive from must-see spots like Kerid Crater, Gullfoss, the Great Geysir, and Thingvellir National Park. Yet despite its proximity to these popular attractions, Hotel Grimsborgir maintains a sense of seclusion, offering a peaceful retreat far from the hustle and bustle.

Kick off each day with a buffet breakfast featuring cured meats, cheeses, and a bowl of skyr, the local Icelandic yoghurt packed with protein that you’ll quickly grow fond of.

As for dining, the hotel restaurant offers a rotating lunch and dinner menu made from seasonal, local ingredients. They even offer takeaway packed lunches for your day trips. Some of the menu favourites include Icelandic meat soup, the fully loaded “Grimsburger,” and the vegan Wellington.

ION Adventure Hotel

Address: 805 Nesjavellier

Just an hour’s drive from Reykjavik, ION Adventure Hotel is a chic haven nestled in the heart of Thingvellir National Park. This modern retreat is surrounded by a landscape that seems to come straight out of a fairy tale, featuring moss-covered lava fields, mesmerising waterfalls, and unique attractions like the Silfra diving spot and Kerid, a lake-filled volcanic crater. 

The hotel is the perfect starting point for a Golden Circle tour, leading you to the wonders of Geysir hot springs and Gullfoss waterfall. The nearest town, Selfoss, is only a 40-minute drive away, offering a variety of cafés, restaurants, an art gallery, and even a swimming pool.

The whole building is set on pillars and appears to jut out of the mountain itself, making a bold architectural statement. Inside, the design continues to captivate, featuring driftwood sculptures and wooden floors that echo the natural world outside. The hotel also has water-saving showers and furnishings crafted from recycled materials, blending luxury with sustainability.

Snæfellsnes peninsula and West Iceland

Hótel Búðir

Address: Búðir 356, 356 Búðir (Snæfellsnes peninsula)

Located on the Snæfellsnes peninsula in western Iceland, about a two-hour drive from Reykjavik, this secluded high-end hotel is a haven of laid-back sophistication set against an awe-inspiring backdrop. 

Every room offers a different, breathtaking view. You might wake up to sweeping sights of the ocean, the Snaefellsjokull glacier, nearby mountains, a lava field, or even a famous black church in a nearby field. 

Plus, the isolated setting means minimal light pollution, giving you a prime seat for an incredible Northern Lights show. As for dining, the hotel boasts one of Iceland’s top restaurants, featuring locally sourced ingredients from nearby farms and fishing communities.

Hotel Egilsen

Address: Aðalgata, 340 Stykkishólmur

Located right by the harbour in the quaint fishing town of Stykkishólmur, on Iceland’s Snæfellsnes peninsula, you’ll find this eye-catching red building dating back to 1867. 

Situated close to three little museums as well as various restaurants and art galleries, this unique hotel is the perfect starting point for exploring the stunning nearby islands in the bay. 

Inside, the hotel features a cosy lounge with a small library, where you’re invited to pen tales for future visitors to enjoy.

Hotel Flatey

Address: 345 Flatey (Flatey Island)

This charming hotel is located on Flatey Island, off Iceland’s western coast, and is the island’s sole accommodation. It’s only open for a few summer months, roughly from June to August. 

The rooms are elegantly simple, showcasing the finest in Nordic design. 

The hotel’s restaurant offers scrumptious seafood caught fresh from the local waters. 

To reach Flatey Island, which is nestled in Breiðafjörður Bay, you can catch a ferry from the town of Stykkishólmur.

Hotel Husafell

Address: Stórarjóður, 320, Husefell

Nestled in the Icelandic Highlands, Hotel Husafell is a secluded boutique hotel that perfectly blends luxury and natural beauty. With just 48 boutique rooms, each offers tranquil views of the stunning landscape, complemented by a minimalist decor, natural colour palette, and unique art pieces by Icelandic artist Páll Guðmundsson.

In the winter, the hotel’s remote location provides an ideal setting for catching the mesmerising Northern Lights. Come summer, the Midnight Sun will captivate you. You’ll also be conveniently close to natural hot springs, awe-inspiring glaciers, and powerful Icelandic waterfalls.

Although Hotel Husafell feels worlds away, it has all the amenities you’ll need for an outdoor adventure. 

You can pick up hiking essentials at the on-site mini-market and refuel after a day of exploration at the casual Bistro. For a more elegant dining experience, reserve a table at Husafell Restaurant. There, you’ll savour gourmet Icelandic dishes while taking in panoramic views of the Highlands.

The Westfjords

Hvammur Bjarg

Address: Drangsnesvegur, 511, Hvammur

Hvammur 1

or Hvammur 2 Bjarg

or Hvammur 4 with private hot tub (Fagurgali)

Hvammur 5 with private hot tub

Benedikt and Signý manage a collection of cosy cabins in Hvammur, which are located alongside the Bjarnafjarðará River in the Strandir region. The family purchased the property in 2017, which initially had just one house. They quickly expanded, building four more houses, each complete with its own hot tub. In addition, they offer a roomy apartment in Hólmavík that can sleep up to six people.

The property boasts three wells, two offering hot water and one providing cold water. You can drink directly from the tap, as both hot and cold water are safe. 

Located just north of Steingrímsfjörður, the Bjarnarfjörður area is a scenic haven lush with natural beauty. It’s an ideal spot for both short and long walks. For instance, there’s the Goðafoss waterfall (not to be confused with the one in the northeast), which originates from the Hallardalsá River. Although you can’t see this waterfall from the road, it’s situated north of Laugarhóll and well worth a visit.

The area is popular for a range of outdoor activities like horseback riding, fishing, and general sightseeing. Don’t miss a trip to the driftwood beaches at Nesströnd. 

Bjarnarfjörður also has various attractions, like the thermal spring Gvendarlaug and the charming Kotbýli Kuklarans. 

Drangsnes is a short drive away, featuring boat trips to Grímsey, a stunning puffin island, as well as restaurants, beachside hot tubs, and the legendary giant troll, Kerling. 

For those interested in a little more action, Hólmavík is about a 30-minute drive away and offers a golf course, a Museum of Sorcery and Witchcraft, whale-watching opportunities, and dining options.

The Old Bookstore

Address: 3 Hafnarstræti, 425 Flateyri

The Old Bookstore in Flateyri is a piece of living history. This is the oldest family-run store in Iceland since 1914. Situated in a charming house built in 1898, this quirky apartment was once the home of the bookstore’s founder for seven decades. 

If you’re tired of staying in generic rooms with white, soulless walls, this place offers a unique and authentic experience you won’t forget. From your window, you’ll enjoy breathtaking views of the ocean and the mountains framing the fjord.

The guesthouse at the Old Bookstore is cosy, featuring just three double bedrooms. Guests share two bathrooms: one retro-style bathroom from 1956 with a bathtub and another modern one built in 2022 with a refreshing shower. You’ll also have access to a fully-equipped kitchen, dining area, and living room, creating a home-away-from-home atmosphere.

Flateyri itself is a little gem of a village, home to just 200 people. It boasts not only the oldest original store in Iceland but also one of the country’s oldest and most iconic pubs and concert venues, Vagninn. 

Nowadays, the village attracts a vibrant community of artists and hosts an arts-focused Folk high school. The main street in Flateyri is a beautifully preserved slice of history, featuring buildings mostly constructed around 1880. Here, you’ll find cafes, bars, restaurants, and shops that welcome visitors, especially during the summer months.

Mýrartunga Guesthouse

Address: 60, 381 Króksfjarðarnes

These are a collection of cosy cabins located on a stunning farm in Reykhólahreppur, situated at the gateway to the Westfjords. You’ll be surrounded by breathtaking views of both the sea and mountains.

Here, you’ll get a taste of authentic Icelandic farm life, and the owners are always ready to show you around.

The kitchen is quaint but fully functional, equipped with a stove, coffee machine, kettle, toaster, microwave, and fridge. The dining room and lounge are shared spaces, creating a communal atmosphere.

For some fresh air and even better views, you can head to the balconies on the upper floor, accessible to all guests. So, if you’re looking for an authentic Icelandic experience, you’ve found the right place!

North Iceland

Iceland Yurt

Address: MX3J+3WR, 605 Iceland

If staying in an Icelandic yurt (inspired by the Mongolian yurts isn’t one of the coolest hotels in Iceland, then I don’t know what it is.

Thora Solveig and Erwin built their own Mongolian yurt in 2008 and have enjoyed living in it for the past seven years with their children in Iceland.

And now look at this wool-insulated and wood-heated Mongolian yurt (Yurt/Ger) on the land of Leifsstaðir. From this place, you can admire the spectacular mountain views overlooking Akureyri and Eyjafjörður. 

Wake up to the songs of birds, the flap of raven wings flying by, or relax in the grass or snow in the sunshine while absorbing the peaceful Icelandic landscape. Or, if it’s raining, enjoy the sound of raindrops hitting the tent as you cosy up next to the wood stove with a good book. From the yurts, you can go skiing or hiking straight into the hills and mountains.

During the winter season, there are two yurts available, each comfortably furnished for five people. These yurts are perfect for families or small groups seeking a unique natural experience or couples looking for a special moment together.

You can also book special sessions with Thora Solveig in a specially hand-carved Yurt, known as the Gaia God/dess Temple Gaia. She offers private healing sessions with crystal tuning forks and pure essential oils or group sound healing with Gong, crystal bowls, and other sacred instruments. In addition, the experience also includes dance, deep relaxation, meditation, and sound healing. Follow their Facebook page (Icelandic Yurt) to see their next upcoming event. 

Sigló Hotel

Address: Snorragata 3, 580 Siglufjörður

The tiny fishing town of Siglufjörður, known as the world’s herring capital, used to be a remote spot you could only get to by boat. Nowadays, it’s easier to reach thanks to a mountain road built in 1967, but it still has that old-school, cosy fishing village feel. 

For a true escape from everyday life, check out Sigló Hotel, located right next to the boat docks. The hotel rooms are a mix of modern comfort and homey charm, featuring window seats where you can gaze at the nearby mountains and harbour. 

If you’re at the hotel’s Sunna restaurant at just the right moment, you might even catch the chef picking out the freshest fish for the day’s meals.

Eleven Deplar Farm

Address: 570 Fljót, Ólafsfjörður

Nestled amidst the dramatic landscapes of Iceland’s Troll Peninsula, Deplar Farm is a luxury retreat where rustic heritage meets modern indulgence. 

Once a humble sheep farm, this now lavish hideaway is topped with a turf roof that blends seamlessly into the icy mountain slopes and sprawling wilderness beyond. Every corner of this secluded sanctuary, from its cosy suites to its elegant spa, offers breathtaking vistas of the surrounding natural beauty.

Dining at Deplar Farm is a feast for both the palate and the eyes. Your stay includes sumptuous meals featuring local delicacies like freshly caught trout and Icelandic char, allowing you to savour the flavours of the land without even having to ask for the bill.

When you’re not indulging in culinary delights, a myriad of complimentary adventures awaits you. Whether you’re into hiking, skiing, or horseback riding, this retreat equips you for a day in the great outdoors. 

Upon your return, shake off the day’s escapades and settle in by the inviting fireplace. Alternatively, experience the luxury of the open-air pool, kept invitingly warm by geothermal energy. Soak in the awe-inspiring surroundings under the midnight sun or, if fortune favours you, under the mystical hues of the Northern Lights.

Deplar Farm seamlessly combines natural wonder, adventure, and sumptuous living into a truly unique Icelandic experience.

Nordic Natura

Address: Dettifossvegur, 671 Kópasker

Nordic Natura is definitely one of the coolest hotels in Iceland. It only offers three  25-square-meter studio houses designed for both comfort and functionality. Each home is perfect for a family of four, with a plush two-seater sleeper sofa available for kids.

Each home has its own private porch, complete with a gas grill and outdoor furniture for your leisure.

If you’re bringing young ones, children 12 and under stay at no extra cost. 

Set against the towering cliff walls of Ásbyrgi National Park in the north, Nordic Natura houses offer sweeping views that captivate the soul. Whether you’re here to bask in the midnight sun, witness the Northern Lights, venture outdoors, or simply unwind amidst nature, you’ve chosen the ideal sanctuary.

Nordic Natura is a stellar base for day trips with endless options for adventure in every direction in North Iceland. 

Laxá Hótel

Address: Olnbogaás, 660 Mývatn

Tucked away in a tranquil spot just 2 km away from Mytvan, Hotel Laxá is a haven of contemporary comfort. 

The hotel is just 30-minute drive to natural wonders like Goðafoss and the Krafla geothermal area. 

Each room at Hotel Laxá comes well-equipped with a flat-screen TV featuring satellite channels, a kettle for your morning brew, and a comfortable seating area. The en-suite bathrooms include complimentary toiletries.

Their on-site Eldey restaurant serves delicious meals crafted from local Icelandic ingredients. For a more relaxed setting, the hotel’s intimate bar area offers stunning views of Laxá and Mývatn, making it the perfect spot to unwind.

For those looking to explore more of Iceland’s natural beauty, the nature baths are just 20 minutes away, and Húsavík—the whale-watching capital—is a 45-minute drive from the hotel. 

East Iceland

Við Lónið guesthouse

Address: Norðurgata 8, Ísland, Seyðisfjörður

Perched on the edge of a charming Seydisfjordur in East Iceland, Við Lónið Guesthouse offers more than just a place to sleep. This boutique hotel presents an arresting backdrop of majestic mountains, the vibrant ‘Rainbow Street,’ and timeless old houses, all just steps away from local shops, eateries, and the iconic Blue Church.

Built in 1907 by Tryggvi Gudmundsson, the house itself is a slice of Icelandic history. It’s one of the elegant kit homes imported from Norway in the early 19th century. Tryggvi not only lived here with his family but also operated a quaint shop on the first floor. 

This very house saw the birth of Nina Tryggvadottir, who went on to become one of Iceland’s most celebrated artists.

Over the years, the building has been used as a clothing shop, convenience store, art studio, home decor hub, and even the town’s first diner to serve burgers and fries. The second floor has predominantly been a residence, although it once underwent a transformation into office spaces. 

Blábjörg Resort

Address: Gamla Frystihusid, 720 Bakkagerði

Nestled in the quaint fishing village of Bakkagerði in Borgarfjörður Eystri, Blábjörg Resort is your gateway to Iceland’s natural wonders. Encircled by striking mountains and untouched landscapes, this resort is a haven for outdoor enthusiasts year-round, offering a plethora of hiking trails and activities in both summer and winter.

When it comes to accommodations, Blábjörg provides a wealth of options to cater to your comfort and needs. You can choose from a cosy guesthouse with communal amenities, hotel rooms boasting private facilities, or even indulge in one of our luxury apartments. For your culinary pleasure, the on-site restaurant serves up delicious fare, and our spa offers a sanctuary for relaxation and rejuvenation.

But what sets Blábjörg apart is its incredible location. 

Borgarfjörður Eystri is a hidden gem waiting to be explored. The village is home to the ethereal Elf City, Álfaborg, where local folklore suggests that elves keep a watchful eye over both the town and its visitors. 

For birdwatchers and nature enthusiasts, the Hafnarhólmi puffin colony comes alive with avian activity from early April to mid-August, offering an unforgettable experience. 

South Iceland

Hrafnavellir Guest House

Address: 93RH+X8J, 781 Höfn í Hornafirði

I discovered this remote boutique hotel while doing the Ring Road itinerary in Iceland. 

This is where I’ll be staying next time.

Situated in the most scenic spot, the Hrafnavellir Guest House offers much more than just a place to stay; it’s a complete experience. This bed and breakfast features not only complimentary WiFi and private parking but also offers you the freedom to start your day with either a continental or a lavish buffet breakfast. 

Want to stretch your legs? The property is ideally located for hiking and even offers a terrace for a bit of outdoor relaxation. It’s far away from any other constructions, which makes it a perfect location for observing the Northern Lights. 

Adding to its allure are a well-stocked bar and another terrace, perfect for winding down after a day of exploring. Some rooms offer the bonus of sea views, but all come fully equipped with modern private bathrooms and a work desk. 

Torfhús Retreat

Address: Dalsholt, 801 Selfoss

Nestled in Selfoss, just about 9 miles (14 km) from the iconic Geysir, Torfhús Retreat offers a blend of luxury and nature. Built in 2018, this relatively new property is also a short distance away from the famous Gullfoss Waterfall, making it a fantastic base for exploring the area’s natural wonders.

Looking for relaxation? You’ll be thrilled to find a hot tub and hot spring bath on-site.

Each room is designed for comfort and convenience. Expect a cosy seating area, flat-screen TV with satellite channels, and a safe for your valuables. The private bathrooms come fully stocked with complimentary toiletries and a hairdryer. 

As for that all-important morning coffee? All rooms feature a coffee machine, and some even come with a fully equipped kitchen featuring a dishwasher, microwave, and stovetop. 

360° Boutique Hotel

Address: Mosató, 803

Experience the epitome of luxury and personal service at the 360° Boutique Hotel, a family-run haven set against the breathtaking backdrop of Iceland’s South Coast. 

This 4-star is one of the coolest hotels in Iceland as it is perched atop a hill, offering panoramic views of awe-inspiring mountains and volcanoes. With just 13 rooms, you’ll find a unique blend of spaciousness and intimacy that often has guests feeling like they’re at a home away from home.

Each suite and deluxe room boasts high ceilings and expansive windows that frame incredible natural vistas, elevating your stay to something truly special. Ready to unwind? Make your way to the on-site spa, where a pool filled with warm geothermal water awaits. Don’t miss the sauna and cosy lounge with a fireplace. The mineral-rich water offers not just relaxation but also potential therapeutic benefits.

What sets this hotel apart is its communal dining experience. Each evening, guests gather around two long tables to enjoy a sumptuous three-course dinner made from local produce. It’s not just a meal—it’s an occasion. You’ll share stories, make new friends, and perhaps even form lasting bonds with fellow travellers.

The hotel strikes the perfect balance between the past and present, offering modern amenities while capturing the enchantment of Iceland. Its design style embodies minimalistic elegance—clean, functional, and inviting, without unnecessary frills. 

Skalakot Manor Hotel

Address: Skálakot, 861 Hvolsvöllur

Run by the same family for four generations, Skalakot Manor Hotel is a haven for lovers of Icelandic horses, known for their small stature and long, flowing manes. 

A horseback ride through the stunning scenery is pretty much a given when you stay here. The hotel offers beautiful, luxurious rooms featuring wooden beams on the ceilings, and some even come with a claw-foot bathtub right in the room. 

Feeling hungry? The hotel’s own restaurant serves up exquisite meals for you to enjoy.

UMI Hotel

Address: Leirnavegur road nr. 243, 861 Hvolsvöllur

UMI Hotel offers a boutique experience in the shadow of the world-famous Eyjafjallajokull volcano—the one that erupted in 2010 and disrupted air travel across Europe for weeks. 

Located just a mile off the well-traveled Route 1 on Iceland’s south coast, this hotel gives you dramatic views of the volcano right from its stylish and well-stocked bar.

The hotel’s exterior is as awe-inspiring as the natural landscapes that surround it, blending dark and moody tones with sleek, modern design. UMI Hotel is a family affair, and if you’re lucky, you’ll be greeted by their friendly dog, Breki, as you arrive.

This boutique hotel in Iceland has only 28 boutique rooms, and each offers an intimate atmosphere. 

Each room is styled to reflect the dark, atmospheric colours of Iceland’s volcanic terrain and provides breathtaking views of either the mountains or the ocean. 

When it comes to dining, the hotel’s restaurant is a showstopper, serving up a unique blend of Nordic, Icelandic, and Japanese flavours all year round.

Hotel Magma

Address: 880 Kirkjubaejarklaustur

Hotel Magma is a standout boutique hotel that gives you front-row seats to nature’s dramatic show, with views of lava fields, black sand beaches, and volcanic peaks. Located in southeastern Iceland just off the Ring Road, it’s a perfect stopover that captures the essence of Icelandic scenery.

The hotel features eco-friendly cabins topped with moss-covered roofs. Inside, you’ll experience the ultimate in Nordic comfort, designed for both luxury and practicality. The best cabins even have outdoor terraces that lead straight down to a nearby lake. Wherever you are on the hotel property, you won’t miss the grandeur of Vatnajokull, Iceland’s largest ice cap, in the background.

When it comes to dining, Bistro 1783 offers magnificent views of Vatnajokull along with its home-cooked meals. The restaurant gets its name from the year Lakagigar Volcano erupted, creating the expansive lava field upon which the hotel now sits. 

For breakfast, you can indulge in local Icelandic skyr, eggs, bacon, and fresh fruit. Dinner menus change with the seasons, always featuring fresh, local produce.

Fosshotel Glacier Lagoon

Address: Hnappavellir, 785 Öræfi

Tucked away in a prime location, Fosshotel Glacier Lagoon is a four-star superior hotel that serves as a gateway to some of Iceland’s natural wonders. You’re just a short drive away from the mesmerising Jokulsarlon glacier lagoon and the stunning Diamond Beach, as well as prime glacier hiking spots in Vatnajokull National Park at Skaftafell. Looking to book an excursion? The reception desk has you covered.

Come evening, the hotel’s restaurant offers a dining experience to match its star rating, with seating for up to 180 guests. Locally sourced, fresh ingredients are the stars of the menu, which also caters to vegetarian, vegan, and gluten-free diets. The restaurant opens its doors from 6 to 10 p.m., setting the stage for a memorable meal. If you’re in the mood for a drink, the bar is a popular hangout for both guests and travellers, open every day from 4 to 10 p.m., with a happy hour that runs from 4 to 6 p.m.

Looking for some extra perks? Enjoy complimentary access to the hotel’s sauna, hot tubs, and gym, open from 10 a.m. to 10 p.m. daily. Plus, there’s a laundry service for added convenience. Fosshotel Glacier Lagoon truly offers a well-rounded experience, balancing outdoor adventures with indoor luxuries.

Reykjanes peninsula

The Retreat at Blue Lagoon Iceland

Address: Norðurljósavegur, 241

As you can guess from its name, the Retreat is centred around the famous hot springs in Iceland’s southwest region. 

You can choose from suites with views of either the Blue Lagoon or the stunning local terrain. Not only does the hotel give you access to a secluded part of the Blue Lagoon, but it also features a spa carved into an ancient lava flow that’s 800 years old. 

For a truly unique spa experience, try the Ritual treatment, which uses natural elements like algae, silica, and mineral salt, all harvested from the nearby waters, to refresh your skin.

Silica Hotel

Address: Norðurljósavegur 7, 240 Grindavík

Nestled in a rugged landscape of lava rocks, Silica Hotel is a tranquil retreat just a short distance from the famous Blue Lagoon resort. 

It’s not just about the hotel’s own amenities like lagoons, bars, and eateries; you’re also perfectly positioned to explore the natural wonders of the surrounding Reykjanes Peninsula, a Unesco Global Geopark teeming with geological marvels. 

From craters and mud pools to steam vents and mossy lava fields, the area is a paradise for nature lovers. Looking for a trek with a view? The Thorbjörn mountain, a 24,000-year-old dormant volcano, offers an easy hike with stunning panoramas. If golf is your game, a high-quality 18-hole course is just five miles away.

Designed by Basalt Architects, the hotel itself is a masterclass in modern minimalism that doesn’t skimp on warmth. Quality furnishings and textiles adorn the space, all set against a backdrop free of bold colours or art—creating a Zen-like ambience. 

Generous windows fill rooms with natural daylight and frame views of the otherworldly landscapes beyond. Whether you’re looking for an adventurous outing or a serene sanctuary, Silica Hotel offers the best of both worlds.

What are the best hotels in Iceland?

It all comes down to your personal preference and travelling style.

Iceland is a place where nature is the centrepiece of any kind of experience. Many travel to Iceland to indulge in their photography, witness the Northern Lights or witness the unique collection of natural wonders. 

Booking any of these unique hotels will guarantee you that you will have an amazing experience. 

Make sure to book your stay in advance, as some of these boutique hotels only have a few rooms available and are run by local families. 

Remember to plan your trip to Iceland from September to April if you want to increase your chance of seeing the Northern Lights. Also, booking a more secluded hotel outside cities will increase your chances of seeing the Aurora dancing in the sky.