Our Favorite 17 Hotels in Iceland

Northern lights, glaciers & hot springs: The mystical Iceland is a land of contrasts. Those who book a hotel in Iceland are spoiled for choice. Where in Reykjavik the life rages, along the coast one natural wonder alternates with another. On a road trip along the Golden Circle, national parks are fascinating. Gigantic ice cubes float in the Jökulsárlón glacier lagoon, while elsewhere the impressive Goðafoss waterfall plunges into the depths. The very daring explore the Arctic Coast Way of Iceland.

Hotels in Iceland

Hotels in Iceland © Hótel Jökulsárlón - Glacier Lagoon Hotel

Iceland appears in the middle of the ocean as if from another world: volcanic landscapes, un-believable scenes of natural beauty, and a largely unpopulated countryside enchant even the most traveled. Nothing can prepare one for the dynamism and particularity of the landscapes encountered on a trip to Iceland. A perfect hotel is one that serves as an accompaniment to the immaculate surroundings, warm hospitality, and aura of tradition that every Icelandic holiday promises to contain.

Understanding Iceland and finding your dream hotel

The Golden Circle: Iceland’s favorite road trip

The Golden Circle is Iceland’s most popular road-trip route, covering about 300 kilometers of Iceland’s southern coast. Beginning in Reykjavik, set off for an unforgettable journey through some of Iceland’s most outstanding natural wonders. The major stops on the route include Thingvellir, Gullfoss, and Haukadalur. Not just a site to behold, Thingvellir National Park is significant for its straddling the tectonic boundary between North America and Europe. Gullfoss, or the Golden Falls, is a true manifestation of grandeur, with a total height of 32 meters and a three-stepped staircase rushed over by rainbow-tinged water. The third major stop on the route is Haukadalur Valley, home to the famous Geysir from which all geysers are named and other geothermal sites. Mentioned in literature as early as 1294, these geysers put on an amazing show; Strokkur erupts up to 70 meters of boiling water in the air every four to ten minutes. The entire journey covers only around 230 kilometers and as is the case with much of Iceland, most of the land is undeveloped, so setting up a home base with a hotel in Reykjavik is what most visitors do.

Reykjavik: Architecture and city fun

Reykjavik is a city for lovers of the unreal: architecture from the seldom-seen Nordic Modernism, coastal views into the windy infinity of the Atlantic, and the iconic Hallgrímskirkja church. Purportedly a reflection of the Icelandic landscape, Hallgrímskirkja is built as if shooting into space and shines a basalt white in every skyline view. Opt for a climb to the top for otherworldly views over the city and the edge of the island. In the northernmost capital in the world, find a surprisingly cool contemporary art and music scene and a lively tradition of festivals. In the summer, check out the suite of swimming pools located within the city—which act more like luxury spas, offering indoor and outdoor pools, saunas, and hot tubs at a public-pool price. The nightlife is bustling; you’ll find everything from drag shows and happy hours, to jazz nights and standup comedy. All that said, most time in Reykjavik is spent walking, exploring this new kind of world and soaking up the local energy. A short drive from Reykjavik you’ll find the Northern Lights as never experienced. Settle into to a centrally-located hotel with only the finest amenities and well-equipped spa centers to ensure you get the most of your downtime between sightseeing and road-tripping.

The Southern Coast: Waterfalls, glaciers, and vikings

Iceland’s southern coast is where you’ll see some of the mostly vastly-differing landscapes in close proximity to one another. On one thirty-minute drive, you’ll pass by seas of volcanic rock, evocative of the moon, followed quickly by green terrain overlooked by glaciers. From Reykjavik, the drive to the end of the south coast route is about four and a half hours one-way without stops; it is recommended to find a hotel on the other side of the coast, as the round-trip journey is a little much for one day. Begin with magical Seljalandsfoss waterfall, where you can even walk behind the rushing water as it falls. Continue to the famous black-sand beach which spans from Dyrhóleay to Reynisfjara and Vík and features a suite of ethereal rock formations. Vík has a viking-rich history and is worth a pit stop for its charming, seaside village feel, while surrounded by natural beauty including beaches and interesting terrain. Stopping along the way, probably quite constantly, for alien views of glacier geysers, lava fields, and elegant, understated waterfalls, rushing out of the sides of passed mountains. The not-so-understated waterfall, Skógá, is worth a visit for its sheer grandeur and the ever presence of a rainbow around the basin. Last on the south coast is perhaps the highlight of any trip to Iceland, Jökulsárlón Glacier lagoon and the Diamond Beach.

North and Inland Iceland: Off-the-beaten-path Iceland

North Iceland is where you leave the more oft-trod paths behind and experience the Arctic Circle. More waterfalls, like the Waterfall of the Gods, Goðafoss, more volcanos like the im-posing Hverfell, and more unbelievable displays of nature await. Much of the land up north will require a 4X4 to navigate, but certified vehicles for this kind of driving are also available to rent at the Keflavik airport. Lonely Planet has recently placed the Arctic Coast Way of Ice-land on its list of the world’s top ten destinations—a place you really have to see to believe. Also in North Iceland is Akureyri, the “Capital of the North” and the largest town outside of Reykjavik, boasting a nice list of luxurious hotels and some must-see landmarks. Iceland’s interior is completely uninhabited, making for a stark, unbothered beauty not seen anywhere else. To discover the most dramatic of the landscapes, try Sprengisandur Route F26, or Kjölur Route 35. With no accommodation along the way, in addition to really no chance for stops for food or shopping, these routes promise ultimate immersion into the other world that is Ice-land. Make sure to stock up on food, drinks, and petrol, and check safety tips before venturing inward.

Good to know

Getting there: Fly into Leifur Eiríksson International Airport in Keflavik. If you are rent-ing a car (which is highly recommended), you can pick it up there. 50-minute transfers are available to Reykjavik by bus for around 20 euro or by private vehicle for around 140 euro. If you don’t rent a car, plan to stay put in Reykjavik or to join a sightseeing tour to get to any of the island’s destinations.

Cost and currency: Iceland is notoriously expensive, the third-most in the world. Eating and drinking out are what really adds up; a half-liter beer at a bar in Reykjavik will set you back almost 9 euro. That said, since much of your time in Iceland is spent on the road, stock-ing up on food and drinks at grocery stores and packing lunches and snacks makes a trip much easier on a budget. The Icelandic currency is called Króna and one euro equals about 125 Króna. Tip: buy booze at the duty free in the airport to avoid cataclysmic alcohol prices in Reykjavik. Debit and credit cards are accepted almost everywhere.

The most popular hotel types in Iceland

Cities & towns in Iceland

Hotel tips: Extraordinary hotels in Iceland

Around Iceland: Neighboring countries for your next trip