20 Best Places to Stay in Iceland: Comprehensive Accommodation Guide

Accommodations in Iceland range from five-star luxury geothermal resorts and iconic Nordic design hotels to secluded turf-roof cabins, glass aurora igloos, and historic lighthouse guesthouses. Whether staying in downtown Reykjavík or along the quiet shores of the Westfjords, lodging in Iceland offers unique architecture and stunning natural vistas.

What to Expect From Iceland Hotels

Hotels across Iceland blend sleek Nordic minimalism with extreme proximity to natural elements. Key highlights include:

Geothermal Wellness: Many hotels feature outdoor thermal hot tubs, saunas, and direct hot spring access.
Northern Lights Services: Countryside hotels often offer wake-up calls when the Aurora Borealis appears in the night sky.
Nordic Design & Sustainability: Sleek wooden interiors, eco-friendly geothermal heating, and floor-to-ceiling glass windows framing wild landscapes.
Local Breakfast Buffets: Generous breakfast spreads featuring Skyr, freshly baked bread, smoked salmon, and hot coffee.

20 Best Places to Stay in Iceland

1. The Retreat at Blue Lagoon

Style: Ultra-Luxury Geothermal Resort
Location: Grindavík, Reykjanes Peninsula
Best For: Five-Star Spa Luxury & Honeymooners
About the Place: An exclusive sanctuary featuring private access to a subterranean geothermal lagoon, floor-to-ceiling glass suites surrounded by lava fields, a underground spa, and Michelin-recommended dining.
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2. Hotel Rangá

Style: Luxury Countryside Lodge
Location: Hella, South Coast
Best For: Northern Lights Viewing & Astronomy
About the Place: A log-cabin resort featuring geothermal outdoor hot tubs, themed suites, gourmet dining, and its own high-tech astronomical observatory with expert astronomers on site.
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3. Ion Adventure Hotel

Style: Modern Eco-Design Hotel
Location: Near Þingvellir National Park
Best For: Architecture Enthusiasts & Nature Retreats
About the Place: An award-winning design hotel jutting out over lava fields near Lake Þingvallavatn. Features a glass-walled Northern Lights bar, thermal pool, and eco-friendly construction.
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4. The Reykjavik EDITION

Style: Modern 5-Star Luxury City Hotel
Location: Old Harbour, Reykjavík
Best For: Waterfront Luxury, Dining & Nightlife
About the Place: Located next to Harpa Concert Hall, featuring sophisticated contemporary design, custom timber details, a spa, rooftop bars, and fine dining by top Icelandic chefs.
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5. Hotel Búðir

Style: Historic Countryside Boutique Hotel
Location: Búðir, Snæfellsnes Peninsula
Best For: Romance, Coastal Isolation & Fine Dining
About the Place: Set beside a famous black wooden chapel on a remote lava field along the ocean, offering ocean-facing rooms, cozy fireplaces, and an acclaimed seasonal restaurant.
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6. Deplar Farm

Style: Ultra-Exclusive Outdoor Luxury Lodge
Location: Troll Peninsula, North Iceland
Best For: Heli-Skiing, Outdoor Adventure & Luxury
About the Place: A converted sheep farm with a turf roof in a remote mountain valley, offering custom heli-skiing, geothermal indoor/outdoor swimming pools, sauna, and full-inclusive service.
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7. Fosshotel Glacier Lagoon

Style: Contemporary Wilderness Hotel
Location: Hnappavellir, near Jökulsárlón
Best For: Glacier Lagoon Exploration
About the Place: A stylish design hotel situated between Skaftafell and Jökulsárlón glacier lagoon, offering panoramic mountain rooms, sauna, hot tubs, and gourmet restaurant.
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8. Hotel Umi

Style: Minimalist Nordic Boutique Hotel
Location: Eyjafjöll, South Coast
Best For: Quiet Beach & Volcano Views
About the Place: Tucked at the foot of Eyjafjallajökull volcano facing black sand coastal plains, featuring minimalist Scandinavian decor, ocean views, and fine dining.
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9. Siglo Hotel

Style: Historic Harbor Resort Hotel
Location: Siglufjörður, North Iceland
Best For: Fjord Scenery & Relaxation
About the Place: Built directly over the water in a historic fishing town, featuring oceanfront balconies, outdoor geothermal hot tubs right by the fjord, and harbor dining.
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10. Canopy by Hilton Reykjavik City Centre

Style: Chic Urban Lifestyle Hotel
Location: Downtown Reykjavík
Best For: Walking Distance to Shopping & Dining
About the Place: Set across interconnected historic houses near Laugavegur, featuring local vinyl record collections, Nordic design, cozy lounge fires, and bike rentals.
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11. Hotel Lakagígar

Style: Countryside Lake Hotel
Location: Kirkjubæjarklaustur, South Coast
Best For: Rural Peace & Volcanic Excursions
About the Place: A serene countryside hotel set beside a small lake, serving as a base for Super Jeep tours into the remote Laki volcanic craters.
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12. Bubble Hotel (5 Million Star Hotel)

Style: Transparent Glamping Dome
Location: South Iceland & Golden Circle Secret Locations
Best For: Stargazing & Aurora Borealis
About the Place: Transparent, climate-controlled bubble domes situated inside secluded pine forests, offering guests the chance to sleep directly under the stars and Northern Lights.
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13. Krapf (Magma Hotel)

Style: Lakeside Boutique Cabins
Location: Kirkjubæjarklaustur
Best For: Cozy Stays & Volcano Landscapes
About the Place: Cozy private rooms housed in wooden cabins overlooking a quiet lake and moss-covered lava fields, offering tranquil privacy and birdwatching.
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14. Hotel Kraz (Hotel Kálfafell)

Style: Countryside Guesthouse
Location: Near Skaftafell
Best For: Budget Ring Road Travelers
About the Place: A traditional, friendly family-run hotel offering comfortable rooms and warm home-cooked meals right along the southern Ring Road.
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15. Hótel Húsafell

Style: Sustainable Luxury Resort
Location: Húsafell, West Iceland
Best For: Eco-Luxury, Hiking & Thermal Pools
About the Place: A 100% self-sustaining resort powered by on-site hydroelectricity, featuring geometric design, thermal pools, a golf course, and proximity to ice caves.
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16. Eyja Guldsmeden Hotel

Style: Eco-Boutique Hotel
Location: Near Laugavegur, Reykjavík
Best For: Eco-Conscious Travelers
About the Place: A certified eco-friendly boutique hotel featuring Bali-inspired organic wooden canopy beds, organic breakfasts, and warm bohemian atmosphere.
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17. Hotel Kea

Style: Classic City Hotel
Location: Downtown Akureyri
Best For: Northern Exploration & Urban Access
About the Place: A historic hotel located in central Akureyri right next to Akureyrarkirkja church, offering traditional rooms, bar, and easy access to shops.
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18. Seljótel (Hotel Selja)

Style: Boutique Country Hotel
Location: Near Seljalandsfoss
Best For: South Coast Sightseeing
About the Place: A family-run country hotel offering clean modern rooms with mountain views, positioned just minutes from Seljalandsfoss and Skógafoss waterfalls.
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19. Laxá Hótel

Style: Modern Eco-Hotel
Location: Lake Mývatn
Best For: Lake Mývatn Exploration
About the Place: Sleek modern hotel set on a hill overlooking Lake Mývatn and surrounding lava fields, featuring large floor-to-ceiling windows and local dining.
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20. Kex Hostel

Style: Vintage Industrial Social Hostel & Hotel
Location: Old Biscuit Factory, Reykjavík
Best For: Solo Travelers, Backpackers & Social Vibe
About the Place: Housed inside an old biscuit factory along the waterfront, combining vintage school furniture, a lively gastropub, private rooms, and dorms.
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Featured Image

The Retreat at Blue Lagoon