15 best luxury hotels in Iceland for an unforgettable stay

Retreat Hotel Blue Lagoon

Abundant in natural attractions including glaciers, snow-capped mountains, waterfalls, hot springs and windswept black sand beaches, Iceland is one of my all-time favourite travel destinations. Plus, it’s home to some seriously impressive luxury hotels. 

With those super chic Scandi interiors and epic locations, I am always blown away by the standard of luxury hotels in Iceland. It’s really like nothing I’ve experienced elsewhere.

From a city bolthole in downtown Reykjavik to a getaway in a delightfully isolated spot, my guide covers all the finest stays in the Land of Fire and Ice.

Whether you want to see the Northern Lights, soak in a geothermal hot tub, hike the trails or shop till you drop, these are my favourite places in which to turn your Icelandic dreams into reality.  

If you want the best hotels in Iceland, luxury properties don’t come any finer than the following prime picks. Each hotel listed in this guide has been chosen based on either my own personal experience or on recommendations from locals and fellow travellers.

So read on to find the perfect stay for your Icelandic getaway.

Author Bio: Jessie Moore

Jessie Moore is a luxury travel expert with years of experience travelling the world to find the best destinations, hotels and adventures.

15 luxury hotels in Iceland

1. ION Adventure Hotel

Address: 805, Iceland

Best for: Adventure and activities

ION Adventure Hotel

Enjoying an incomparable location on Mount Hengill, ION is widely regarded as one of the best hotels in Iceland. It’s dramatically set among lava fields under an hour’s drive from Reykjavik.

I first became aware of this hotel when it was featured on the BBC’s Amazing Hotels: Life Beyond The Lobby, which highlights some of the most spectacular hotels across the world.

What I love about this hotel is that it’s all about the wider experience, rather than just the hotel itself.

Whether your aim is to experience Nordic cuisine and nightlife, to see a dazzling display of the Northern Lights in all their technicolour glory or to get out there and explore the Icelandic outdoors, the ION Adventure Hotel provides the ideal base. 

ION Hotel Iceland

Get pampered at the Lava Spa, wine and dine at the Silfra Restaurant, and explore the nearby UNESCO World Heritage Site of Thingvellir National Park – one of my own favourite spots in Iceland.

This iconic Icelandic design hotel allows you to get up close and personal with the Land of Fire and Ice.  

2. The Retreat at Blue Lagoon

Address: Norðurljósavegur, 241, Iceland

Best for: Wellness

Retreat Hotel Blue Lagoon

A Scandi-style eatery, impressive wellness centre and views over the surrounding volcanic terrain help to make this Blue Lagoon property stand out among Iceland luxury hotels.

Are you after a deluxe retreat from the chaos of life? The Retreat Hotel will provide you with the perfect place in which to unwind among one of the world’s most stunning and unique natural landscapes. 

Gaze out over the soothing blue waters of the lagoon from the comfort of your stylish room.

Or enjoy breathtaking mountain views as you settle down for the most memorable of meals at Moss restaurant. Discover more of the best Michelin restaurants in Iceland.

I love that The Retreat brings together Michelin-rated dining, use of the Retreat Spa and Blue Lagoon,​ and stylish accommodation with unparalleled views.

It’s a sure-fire recipe for the ultimate in relaxation, incredible natural beauty and sheer enjoyment.

3. Silica Hotel at Blue Lagoon

Address: Norðurljósavegur 7, 240 Grindavík, Iceland

Best for: Spa facilities

Silica Hotel at Blue Lagoon breakfast

Another option for guests wishing to stay close to the Blue Lagoon is the Silica Hotel. It’s only 10 minutes’ walk from the lagoon, and is run by the same company as The Retreat.

Like its sister property, I love that the Silica Hotel is designed to complement its natural surroundings. It’s a utopian environment rich in minerals and soothing blue waters.

Silica Hotel at Blue Lagoon, Iceland

Guests can gaze at rugged peaks from Silica’s Lava restaurant. Or make use of the amenities at The Retreat – including, of course, the Retreat Spa.

Rooms are awash with natural woods, soft neutrals and splashes of pale blue. Plus, floor-to-ceiling windows frame those incomparable vistas.  

4. UMI Hotel

Address: Leirnavegur road nr. 243, 861 Hvolsvöllur, Iceland

Best for: Contemporary design

UMI Hotel

Located in southern Iceland around 100 miles from Reykjavik, UMI is another top pick among 4 star hotels in Iceland.

The grey, low rise geometric structure is ultra contemporary in design and enjoys a peaceful location among the volcanic mountains of the region.

To one side there are rugged granite peaks. To the other, the characteristic black sands of the southern Icelandic coast.

It’s a wintry landscape, featuring tumbling glacial waterfalls, ice-capped mountains and the delightful local puffin population.

The fact that there’s just 28 rooms at this family-run property helps to create a feeling of intimacy, which I think is one of its greatest appeals.

All the rooms are decorated in a sleek, minimalist style softened by hygge touches such as natural woods and tactile textiles.

UMI Hotel also serves up Icelandic specialities in the restaurant. I’d recommend following with post-dinner drinks at the bar while gazing out at the starriest of night skies.

5. Edition Hotel Reykjavik

Address: Austurbakki 2, 101 Reykjavík, Iceland

Best for: Central city location

The Reykjavik EDITION hotel

If being at the centre of it all is more your thing, I’d recommend booking a stay at the Edition in downtown Reykjavik.

This upmarket property proves that top hotels in Iceland can also be found within the city limits.

The Edition is big on size as well as style, with over 250 rooms plus 27 sprawling suites. Its contemporary decor and plush facilities are the brainchild of acclaimed designer Ian Schrager.

Reykjavik EDITION hotel

Tides restaurant is seamlessly overseen by Gunnar Karl Gíslason, the first Michelin starred chef of Iceland.

Flanked by mountains and situated on the harbour, Edition Hotel offers guests a wealth of amenities, as well as easy access to all the excitement of the Icelandic capital. 

Facilities include a selection of restaurants and bars, a sumptuous spa and a 24 hour fitness centre.

While accommodation ranges from Guest, Superior and Deluxe rooms to Ocean View, Harbour and Penthouse suites. 

6. Hotel Borg

Address: Pósthússtræti 11, 101 Reykjavík, Iceland

Best for: Art deco design

Hotel Borg bedroom

For a more classic take on Scandinavian style, I’d recommend art deco icon Hotel Borg as your perfect pick from the luxury hotels in Iceland.

Reykjavik is again on the doorstep, with the Icelandic Parliament just across photogenic Austurvöllur square.

Hotel Borg is a landmark Reykjavik property offering authentic art deco detailing and the Borg Spa with steam bath, sauna, hot tub and fitness centre.

Hotel Borg

It’s run by Keahotels, who oversee half a dozen hotels across the city and therefore know the area incredibly well. 

Borg has 99 rooms, ranging from standard singles, doubles and twins to the top-of-the-range Tower Suite.

All feature polished, pale wood parquet flooring offset by dramatic splashes of black, curved armchairs and generous drapes made from soft fabrics.

7. Fosshotel Glacier Lagoon

Address: Hnappavellir, 785 Öræfi, Iceland

Best for: Sweeping views

Fosshotel Glacier Lagoon Executive Suite

In an idyllic Hnappavellir location between the mountains and the sea is Fosshotel Glacier Lagoon. It’s one of the ultra spacious and contemporary properties that Iceland seems to do so very well.

This is one of the best hotels to stay at in Iceland if, like me, you’re a fan of soaring peaks as much as sweeping views over the land and ocean.

Fosshotel Glacier Lagoon Restaurant

It’s also ideal for nature lovers and hikers, being situated close to the Jökulsárlón Glacier Lagoon and Skaftafell National Park.

There are 125 rooms at Fosshotel Glacier Lagoon. Plus, there’s a sizeable restaurant with seating for up to 180 covers. Other amenities include hot tubs, a bar, a sauna and a gym. 

8. Hotel Grimsborgir

Address: Ásborgir 30, 805 Selfoss, Iceland

Best for: Luxury spa

Hotel Grimsborgir room

In the heart of the famed Icelandic Golden Circle is Grimsborgir, one of the finest examples of a luxury spa hotel in Iceland.

This is not least because the property has 29 private and shared geothermal hot tubs, as well as accommodation for up to 240 guests.

Decor is fresh and modern throughout the light-filled spaces. The restaurant has an outdoor terrace for al fresco dining during summer. Both international and Icelandic dishes are a feature of the extensive menu.

Whether you want to indulge in active or more relaxing pursuits, or seek to fulfil a lifelong dream of witnessing the spectacular natural phenomenon of the Northern Lights.

I don’t think you can beat a luxury spa surrounded by epic scenery – and that’s just what you’ll find at Hotel Grimsborgir. 

9. Hotel Rangá

Address: Hótel Rangá, 851 Hella, Iceland

Best for: Cosy and relaxed feel

Hotel Rangá

Not all of the best luxury hotels in Iceland are five star rated. If the more relaxed welcome and attractive price tag of a four star place appeals to you, then I’d recommend checking out Hotel Rangá in the Hella area.

Around an hour by car from Reykjavik, Hotel Rangá is a resort-style property that even boasts its own on-site observatory.

Hotel Rangá Royal Master Suite

It’s rather like a very plush – and large – log cabin. It makes the perfect base for all kinds of Icelandic adventures and activities.

Highlights include the restaurant’s wraparound windows, geothermal hot tubs with views over the volcanic landscape, and of course the Rangá observatory for the ultimate in night sky gazing.

The hotel also has a lounge, games room and bar for daytime and evening downtime.

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10. Skalakot Manor Hotel

Address: Skálakot, 861 Hvolsvöllur, Iceland

Best for: Rural retreat

Skalakot Manor Hotel Iceland

Located on the south coast of Iceland, Skalalot Manor is a family-run boutique property; I love that it bears far more resemblance to an Alpine chalet than a modern block.  

The hotel offers a range of luxurious accommodation, an appealing restaurant and a bar.

Skalakot Manor Hotel Room

It is located on the family farm, along the undulating green pastures at the foot of the Eyjafjallajökull volcano. 

Inside, rustic meets art deco to create a natural, rural retreat offering a warm and authentically Scandinavian welcome.

All rooms come with sweeping ocean or mountain views and some have private balconies, which I’d definitely recommend to make the most of the surrounding scenery.

Horse riding tuition can be booked locally and the majestic Skógafoss waterfall is just over 10 miles from the hotel.

11. Hotel Geysir

Address: 806, Iceland

Best for: Golden Circle location

Hotel Geysir Bedroom

Hotel Geysir is about 90 minutes’ drive from the Icelandic capital. As the name suggests, it is located directly opposite the famous Geysir.

In my opinion, this hotel is a particularly pleasant place to be in summer, thanks to the fact that there is a pretty, furnished garden complete with BBQ facilities.

The property has a strong focus on environmental responsibility. It takes great care to preserve natural resources like water, building materials and energy.

All while delivering superb service and impressive amenities. Plus, a wealth of activities in the area mean guests will never be bored.

Hotel Geysir Room

Most never tire of watching the spectacular natural displays offered by both the Great Geyser and Strokkur, as they shoot a spume of water many metres into the air. 

The region’s other attractions include the Geysir complex with shops and restaurants.

There are also hiking trails, the Haukadalur woods, fishing, Langjökull glacier tours, river rafting and Blesi – a hot spring with clear, deep turquoise waters, which I’d definitely recommend stopping by.

12. Deplar Farm

Address: 570 Fljót, Ólafsfjörður, Iceland

Best for: Off the beaten track location

Deplar Bar

A grassy living roof, full-length windows and black timber cladding ensure that Deplar Farm is every bit as memorable as it is luxurious.

The property is located on a former sheep farm on the Troll Peninsula in northern Iceland.

Among all the top luxury hotels in Iceland, I think the position of Deplar Farm is one of the most unique, being somewhat off the beaten track in the north of the country.

Gently rolling green hills and snow-capped peaks dominate the landscape, in a region as famous for salmon fishing as it is for heli-skiing (sign me up!).

Deplar Spa

The feel is fresh, modern and natural. While the more notable facilities include games consoles, a media room and saltwater flotation tanks.

An expert staff team, meanwhile, includes local guides, sommeliers and highly skilled chefs. 

13. Canopy by Hilton Reykjavik City Centre

Address: Smiðjustígur 4, 101 Reykjavík, Iceland

Best for: City chic

The Canopy by Hilton in central Reykjavik offers accommodation and amenities spread across six interconnected buildings, all of which have a unique history.

The property has a pleasing outlook over Faxa Bay, and some rooms offer sweeping views over the water.

Located in a neighbourhood awash with character and history, The Canopy’s chic, modern look is complemented by quirky touches in keeping with its eclectic past.

The hotel was used in a past life as music and arts venues, and was also the site of a furniture factory. 

I love that guests can borrow a portable record player plus some vinyl to play on it during their stay. Gym bunnies can work out in the fitness centre and foodies can dine at the restaurant (you’ll find me in the restaurant, not the gym!).

Or simply wander over to lively Laugavegur Street nearby, a well-known entertainment and shopping hub in central Reykjavik.

14. 360 Hotel

Address: Mosató, 803, Iceland

Best for: Panoramic views

360 Hotel Bedroom

Modern, minimalist and magical all at the same time, 360 Hotel in southern Iceland enjoys a fabulous hilltop location.

While there isn’t a spa on site, the sauna and thermal baths provide guests with ample opportunity to soak their cares away.

360 Hotel Dinner

A three course daily dinner is centred on the catch of the day. Guests can mingle while dining at the long shared table.

From here it’s possible to witness what goes on in the kitchen – or to look in the other direction and enjoy superlative views of the snow, the midnight sun or even the Northern Lights.

With only 13 rooms, I think this intimate property is truly unique, ensuring you can enjoy making the kind of memories that will last a lifetime. 

15. Siglo Hotel

Address: Snorragata 3, 580 Siglufjörður, Iceland

Best for: Nautical retreat

Unlike other contenders for the title of Iceland’s most luxurious hotel, Siglo is located in neither the capital nor the countryside.

Rather, it’s nestled into the harbour at Siglufjörður, a small town located on a narrow fjord in northern Iceland.

Forming a key part of the marina, Siglo Hotel is nautical in style and offers guests the chance to watch the local fishermen as they haul in what might later be transformed into a delicious dinner.

The hotel in fact runs three eateries, with one restaurant inside as well as two on the harbour. So I’d recommend this hotel as a great option for foodies!

Some rooms come with balconies or window seats, while all have views over either the marina or the mountains.

Hotel amenities include a sauna, a bar, a spa with steam room and hot tub, and a guest lounge with fireplace and games.  

Iceland offers some truly unique luxury hotels, where minimalist design is complemented by dramatic landscapes. Let me know any of your personal favourites or recommendations in the comments!

If you’re planning a trip to Iceland, you may also like:

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Jessie Moore
Jessie Moore

Jessie is a luxury travel expert with years of experience travelling the world to find the best destinations, hotels and adventures.

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