Few places in the world capture the unique magic of Iceland. At roughly the same size as Ohio, it’s a compact island nation that combines rugged and ever-changing terrain (you might have heard about the active volcano that keeps disrupting travel), a dramatic and Viking-filled history, a design scene as vibrant as its Nordic peers, and a long-standing push toward sustainability.
The hotel scene lives beautifully at these crossroads as well. A five-star spa resort like The Retreat at Blue Lagoon, for instance, may feel urban and sophisticated on the inside, but outside, you’ll find expanses of nature where trolls and elves reportedly roam and where the trademark geothermal baths are heated by magma-deep underground. And a place like Ion Adventure Hotel might look postindustrial, but its interiors hide thoughtful eco-friendly touches and charming nods to local craftsmanship.
No matter the style of property—bubble dome, luxury hotel, or far-flung retreat—the one thing that unifies Icelandic lodging options is that they’re gateways for exploration. In fact, you often don’t even have to leave the property to find tranquility in nature, whether that means soaking in a geothermal bath, riding on the country’s unique breed of horses, or taking in the otherworldly aurora borealis. These 10 spectacular hotels across Iceland, part of our Hotels We Love series, complement the natural wonders that surround them.
The Bubble Hotel
There’s a good chance you’ll see the northern lights from your bed at Buubble.
Courtesy of Buubble
- Location: South Coast & Golden Circle
- Why we love it: Northern lights views from the comfort of your own bed
- Book now
For many who come to Iceland outside of the peak summer season, catching a glimpse of the ethereal aurora borealis is top of mind—and this may be the ultimate place to do so. Nicknamed the Five Million Star Hotel, The Bubble Hotel is split between two secluded evergreen forests on private farms near Selfoss on the south coast and Reykholt in the Golden Circle. The transparent, spherical units offer a prime spot for catching the show right from the comfort of your bed, piled high with duvets, blankets, and a sheepskin throw.
If you’re lucky enough to be staying in one of these domes during a winter snowfall, you’ll be treated to a surreal snow-globe-like aesthetic (albeit with the snowflakes on the outside of the bubble). The retreat goes to great lengths to lower its footprint, too, with just one electric floor lamp and a heating system powered by renewable hydropower. Keep in mind that toilets, showers, and a kitchen area are all shared use and located in an adjacent service house. From $400
Eleven Deplar Farm
Eleven Deplar Farm is ideal for those hoping to truly get lost out in the Icelandic wilderness.
Courtesy of Eleven
- Location: Ólafsfjörður, North Iceland
- Why we love it: Four-seasons adventure in a remote valley
- Book now
Eleven Deplar Farm delivers the ultimate in exclusivity for those willing to travel to a remote corner of Iceland’s far north to seek it out. With just 13 guest suites designed in a contemporary Nordic aesthetic, this 15th-century sheep farm–turned–high-end lodge offers an idyllic setting away from it all in the verdant Fljót Valley, on the mountainous Tröllaskagi Peninsula. Here, a gamut of nearby adventures await: hiking, horseback riding, mountain biking, kayaking, fly-fishing, and skiing.
Guests staying in the black-timber-clad, turf-roofed retreat can unwind in the sprawling spa, geothermal-heated indoor/outdoor pool, hot tubs, or sauna. Or they can simply gaze at the rolling hills and dramatic mountain peaks from floor-to-ceiling windows in the dining room, lounge, spa, and gym. With its off-the-grid location and lower-impact, small-group capacity, Deplar Farm is largely self-sustaining, and in turn, sustainable, bolstered by its renewable geothermal energy and the locally sourced meats served at its guest-exclusive Icelandic dining room. From $4,436, all-inclusive
Eyja Guldsmeden
Rooms feature simple but elegant rooms you’d expect from a Danish-owned hotel chain.
Courtesy of Guldsmeden Hotels
- Location: Reykjavík
- Why we love it: A central location in the heart of the capital with understated Scandi decor
- Book now
With its boho-chic aesthetic, laid-back vibe, and convenient downtown location, the 65-room Eyja Guldsmeden is centrally located near Laugavegur, the city’s main shopping strip. Set within a reimagined former office building, the property offers lots of welcome extras, including a locavore-driven restaurant and bar and a rare Reykjavík hotel gym. Guest rooms feature earth tones with handsome four-poster beds, hardwood floors, and natural fabrics and materials like sheepskin throws. Part of the Denmark-based Guldsmeden Hotels chain, the eco-certified property emphasizes sustainable, local, fair-trade, and cruelty-free products across the board, like down-free bedding and organic and refillable bath amenities. From $173
Highland Base Kerlingarfjöll
After a day outside, cozy up in front of a large picture window in the lounge with a hot chocolate and a book.
Courtesy of Highland Base Kerlingarfjöll
- Location: Kerlingarfjöll
- Why we love it: Epic scenery far off the tourist trail with options for all budgets
- Book now
Iceland’s remote central highlands have long been off the radar for visitors and even most locals, which makes Highland Base Kerlingarfjöll, from the team behind the Retreat at Blue Lagoon, such a game changer. Opened in 2023, the hotel comprises historic buildings from a decades-old ski school plus new-build structures made from sustainable, cross-laminated larch timber. Upscale offerings include 46 hotel rooms, two suites, and six luxurious lodges, all decorated in a Nordic style with blond wood, textured linen sheets, and reading nooks set inside large picture windows. To keep the region accessible to people of all budgets, the complex also includes a campground, original A-frame cabins and hiking huts, and 20 slightly more basic hostel rooms off the main building.
Befitting its connection to the Blue Lagoon, the hotel recently opened a complex of geothermal baths, a sauna, and a cold plunge. After a morning of hiking, e-mountain biking, backcountry skiing, or snowmobiling, stop by the cozy and comforting waffle bar; for an extra fee, guests can order unlimited waffles fresh off the iron with whipped cream and jam—an homage to the destination’s ski school days when kids were drawn off the slopes with the smell of freshly made Icelandic heart-shaped waffles each afternoon. Read Afar’s full review of Highland Base Kerlingarfjöll. From $430
Hótel Búðir
Hótel Búðir boasts one of the most stunning pieces of real estate in Iceland.
Photo by Nick Fox/Shutterstock
- Location: Snaefellsnes Peninsula (near Ólafsvík), West Iceland
- Why we love it: Simple and cozy rooms with stunning views
- Book now
Set on the scenic Snaefellsnes Peninsula—a region in western Iceland recognized as one of the world’s most sustainable tourism destinations—Hótel Búðir beckons with not just rustic elegance but also worth-the-trek cuisine. The hotel restaurant’s seasonal Icelandic menu is driven by fresh fare sourced from area farms and fishers, highlighting perfectly cooked fish (don’t miss the arctic char tartare) and lamb dishes, while the adjacent bar touts one of largest selections of whiskey in Iceland. Recently expanded with a new wing, the hotel now features 52 haute-country-cottage rooms, which face the surrounding raw wilderness (glaciers, lava fields, mountains, and coastline). When it’s time to venture outside, the team will organize myriad outings, including hiking, glacier- and cave-exploring, horseback riding, and whale-watching. From $268
Hotel Húsafell
Guests of Hotel Húsafell can join a guided hike to the picturesque Húsafell Canyon Baths.
Photo by Freysteinn G. Jonsson/Unsplash
- Location: Húsafell, Highlands of West Iceland
- Why we love it: Nordic cuisine with an Asian twist
- Book now
Set in the rugged inner Highlands of West Iceland, Húsafell is a Scandinavian-inspired property offering endless opportunities for nature-based activities in the region—there’s glacier hiking, fishing, cycling, caving, and horseback riding, to name a few. But active-minded guests needn’t leave the hotel grounds to find something fun to do, thanks to the geothermal pools, numerous hiking trails, and even an eco-certified nine-hole golf course on site. (Book a tee time during the midnight sun for an extra-surreal experience.)
There’s also a fine-dining restaurant serving up seasonal Nordic- and Japanese-influenced cuisine for which chefs forage ingredients. Popular dishes include hand-dived Westfjords scallops and grilled free-range horse meat served on birch skewers with Iceland-grown wasabi leaves, rye bread miso, and honey. The 48 bright and modern rooms come with heated floors, original coal portraits from revered Icelandic artist Páll Guðmundsson, and organic Icelandic toiletries made with local birch. Fully self-sustainable, the resort meets all its energy needs with on-site hydroelectric power plants, which guests can tour. From $368
Ion Adventure Hotel
The high-design Ion Adventure Hotel started life as the humble workers’ inn for a power plant.
Photo by Roan Lavery/Unsplash
- Location: Nesjavellir
- Why we love it: Sustainable design features in an industrial-chic setting
- Loyalty program: Marriott Bonvoy
- Book now
The eco-conscious Ion Adventure Hotel, a member of Design Hotels located just south of Þingvellir National Park, was once a workers’ inn for the neighboring geothermal power plant. Today, it stands out with its distinctive Nordic-modern design that emphasizes sustainability. The concrete, glass, and black lava exterior blends seamlessly with the surrounding volcanic landscapes, while inside, furnishings and materials are locally sourced or reused. There’s a sauna made of lava rocks, sinks fashioned from old rubber tires, and lamps created out of found wood. The hotel’s energy and heating—and its mineral-rich plunge pool—are powered by the renewable geothermal energy plant next door. Expect organic and fair-trade products in the 45 industrial-chic guest rooms, as well as in the Nordic restaurant kitchen and glass-enclosed Northern Lights bar. Ion lives up to its adventure name: It’s an easy jumping-off point to the adjacent national park for glacier trekking, fly-fishing, horseback riding, and more. From $334
The Retreat at Blue Lagoon
The Retreat at Blue Lagoon puts guests within reach of the dramatic volcanic landscape.
Courtesy of Blue Lagoon Iceland
- Location: Reykjanes Peninsula
- Why we love it: Michelin-starred dining and a one-of-a-kind wellness experience
- Book now
The sprawling geothermal waters of Iceland’s Blue Lagoon are one of the country’s most popular attractions for good reason. Here, soothing rejuvenation beckons in an otherworldly setting of impossibly blue, mineral-rich springs that plunge into 800-year-old lava fields. Guests of the 60-suite The Retreat at Blue Lagoon are granted near-unfettered access, including to a private section of the steamy lagoon. The hotel’s minimalist architectural and design elements merge with the surrounding volcanic landscapes (think lava-brick fireplaces and expansive picture windows), while the spa offers signature treatments, such as an in-water massage.
The on-site restaurant, Moss, is one of only three in Iceland to hold a Michelin star, and its seven-course set menu includes dishes like cod-skin crisps, bread with skyr-whipped butter, and hand-dived scallops with sea urchin and caviar—plus desserts that look like lava rocks or mossy forest floors. You can also book a tasting in the wine cellar, an underground chamber of naturally occurring lava rock that dates back to an eruption in 1266. From $1,602
The Reykjavík Edition
Enjoy views of the Harpa concert hall and the harbor beyond at the EDITION’s rooftop bar.
Photo by Nikolas Koenig
- Location: Reykjavík
- Why we love it: High-design retreat with unique cocktails that speak to Icelandic culture
- Loyalty program: Marriott Bonvoy
- Book now
This outpost of Ian Schrager’s hip lifestyle chain opened in 2021, in the wake of the waterfront Harpa concert hall. Volcanic basalt rock (like the kind you’ll find around the island) brings a chic, sexy darkness to the lobby, including an imposing totem inspired by wayfinding cairns, which is surrounded by a bench lined with sheepskins and cushions. The 253 guest rooms and suites, on the other hand, showcase a softer side of Nordic minimalism. The palette is decidedly lighter, with ash and gray oak wood, plus locally made touches such as colorful wool throws from Ístex, ceramics by Guðbjörg Káradóttir, and landscape photographs by Pall Stefansson and Ragnar Axelsson.
Edition hotels have a reputation for excellent food and beverage options, and that’s no exception here. The Michelin-recommended Tides serves sophisticated dishes like lobster and langoustine croquettes and a salad made with 1,000-day dry-aged feykir cheese, and there’s an eight-person chef’s counter if you want an even more immersive culinary experience. The coolest seat in the house, however, is at Tölt, a bar named for the Icelandic horse’s unique fourth gait. Here, cocktails include unique ingredients like skyr-clarified Aperol, oak-aged brennivín (a potent aquavit nicknamed “Black Death”), and even vermouth infused with hákarl, or shockingly pungent fermented shark. From $506
Torfhús Retreat
You’ll feel like an ancient Viking as you approach the turf-roofed buildings at Torfhús Retreat.
Photo by Vladimir Potapeknko/Shutterstock
- Location: Dalsholt
- Why we love it: Architecture inspired by the Vikings, plus a herd of friendly Icelandic horses
- Book now
Step back in time at this serene retreat, which seems like it’s in the middle of nowhere but is a very quick drive from the tourist-friendly natural wonders of the Golden Circle. The turf-roofed architecture here is inspired by nearby Stöng, the ruins of an ancient Viking farm that dates to about the 11th century. Accommodations come with their own heated basalt-stone hot pools and are divided between the namesake two-bedroom Torfhús cottages, one-bedroom Torfbær Suites, and a four-bedroom villa that sleeps eight and has its own cold-plunge pool and sauna.
Throughout, you’ll find local design touches like salmon-skin leather, a fishing boat turned sofa, and even an old horse cart that’s now used as the breakfast counter. Most of the food comes from within a 10-mile radius, including mountain-grazed lamb, local salmon and char, and vegetables, fruits, and herbs grown in geothermally heated greenhouses. The retreat is also home to Icelandic horses, which you can meet, learn about, and ride through the surrounding countryside. From $860
Additional reporting by Lyndsey Matthews.
