The 9 Best Iceland Hotels of 2023

Reykjavik Cityscape, Iceland, Europe — Chris Hepburn/ Getty Images

The Rundown

Best Overall: Reykjavik Residence Hotel, Reykjavik – See Rates at TripAdvisor "The capital’s top-rated choice on TripAdvisor."
Best Budget: Hotel Djupavik, Djupavik – See Rates at TripAdvisor "For accommodation that’s as affordable as it is authentic."
Best for Families: Frost and Fire Hotel, Hveragerdi – See Rates at TripAdvisor "Kids will love the novelty of bathing in the swimming pool and hot tubs beneath the midnight sun."
Best for Romance: Hotel Ranga, Hella – See Rates at TripAdvisor "Its rural setting is known for excellent Northern Lights sightings in season."
Best Luxury: The Retreat at Blue Lagoon Iceland, Grindavik – See Rates at TripAdvisor "A luxury accommodation option for visitors who want to spend the night at Blue Lagoon."
Best Business: Hilton Reykjavik Nordica, Reykjavik – See Rates at TripAdvisor "Its business district location is ideal for corporate travelers."
Best B&B: Guesthouse Heba, Stokkseyri – See Rates at TripAdvisor "Gives you the chance to experience local life in Stokkseyri, a picturesque fishing village."
Best Hostel: Midgard Base Camp, Hvolsvollur – See Rates at TripAdvisor "A unique hostel experience located just outside the southern town of Hvolsvollur."
Most Unique: The 5 Million Star Hotel – See Rates at TripAdvisor "Each room is a fully transparent bubble, allowing you to sleep out under the stars or beneath the midnight sun."

Best Overall: Reykjavik Residence Hotel, Reykjavik

Junior suite at the Reykjavik Residence Hotel — Courtesy of Reykjavik Residence Hotel

Reykjavik Residence Hotel is the capital’s top-rated choice on TripAdvisor – even if its apartment-style accommodations feel more like a home away from home than a conventional hotel. The apartments are located in the heart of downtown Reykjavik, in heritage buildings that exude historic charm from the outside but are furnished in an impeccable contemporary style on the inside. All apartments come with satellite TV, high-speed Wi-Fi, and a kitchen. The ability to self-cater is a major bonus in Iceland, where dining out is notoriously expensive.

Choose from a list of floor plans to suit every taste and budget. Economy Studios provide a simple yet comfortable place to rest your head, with basic kitchen facilities and one king-sized or two single beds. Family Suites have space for six and come with a Playstation, while the luxurious royal suites are named for one-time guests Christian X and Alexandrine, the King and Queen of Denmark. Breakfast baskets can be ordered for delivery each morning, while the 24-hour reception offers airport transfers and a laundry service.

Best Budget: Hotel Djupavik, Djupavik

For accommodation that’s as affordable as it is authentic, head to Hotel Djupavik in the remote Westfjords region. Set on the edge of a deep blue fjord and backed by sheer mountains, Djupavik village is breathtakingly beautiful. It appeared in Justice League, and at the heart of the region is the hotel, which was once the women’s quarters for the village’s defunct herring factory. There are eight rooms in the main building, all doubles with rustic decor, free Wi-Fi, and a washbasin. You’ll have access to shared bathrooms with male and female toilets.

Every morning, a buffet breakfast is served in the cozy dining room. Expect simple yet delicious Icelandic fare – and the same for dinner. Coffee and tea are free throughout the day, along with snacks. Spend time mingling with your fellow travelers on the terrace, or take a tour of the herring factory to discover Djupavik’s fascinating fishing past. The hotel also offers rental kayaks and guided hikes up a nearby mountain.

Best for Families: Frost and Fire Hotel, Hveragerdi

Thirty minutes drive southeast of Reykjavik takes you to Frost and Fire Hotel in Hveragerdi. The town is famous for its hot springs, which the hotel uses to heat its swimming pool and hot tubs. Kids will love the novelty of bathing beneath the midnight sun, while adults will appreciate the hotel’s boutique Nordic design and breathtaking river and mountain views. If you’re lucky, you may even get a moment to yourselves in the black stone sauna.

Family Rooms come with a double bed and sleeper couch, and provide plenty of space with an inside seating area and a balcony or patio. All rooms are en-suite and include satellite TV and free Wi-Fi. Breakfast is also complimentary. Much of the food at Frost and Fire Hotel is cooked in geothermal ovens, and children will love being able to cook their breakfast eggs in the hot springs. The restaurant also serves gourmet Icelandic cuisine for lunch and dinner. There is a children’s menu, though pickier kids may prefer the pizza restaurant in the village.

Best for Romance: Hotel Ranga, Hella

Four-star Hotel Ranga is the ultimate choice for a romantic getaway in southern Iceland. It overlooks one of the finest salmon rivers in the country, and its rural setting is known for excellent Northern Lights sightings in season. There are 52 rooms and suites to choose from, all with free Wi-Fi, a TV, a mini-bar, and 24-hour room service. Choose a Deluxe Room for its king-sized bed and Jacuzzi bathtub, or celebrate a special anniversary in a themed suite inspired by one of the seven continents.

During the day, the concierge can arrange romantic activities that range from swimming in a local hot spring to horse riding and helicopter tours. Alternatively, stay at the hotel and indulge in a couples’ massage before soaking in one of the outdoor hot tubs. The Ranga Restaurant is acclaimed for its gourmet Icelandic cuisine, which is prepared using the finest seasonal ingredients and complemented by an impressive wine list. The hotel also has an observatory for stargazing and a choice of four different wedding packages.

See the Aurora Borealis with the help of the best Iceland Northern Lights tours.

Best Luxury: The Retreat at Blue Lagoon Iceland, Grindavik

All-suite hotel The Retreat is a luxury accommodation option for visitors who want to spend the night at Blue Lagoon, the world-famous geothermal pools near Grindavik. The most decadent option is a Lagoon Suite, with its own private terrace and a secluded lagoon. Floor-to-ceiling windows mean that the ice-blue waters are always visible, whether from your master bedroom with its en-suite bathroom and deep-soaking tub or from the elegant living area. All suites include a delicious breakfast.

You can take part in complimentary yoga classes and guided group hikes, or spend leisurely afternoons relaxing in the Retreat Lagoon (a more exclusive alternative to the public Blue Lagoon). The Retreat Spa is a particular highlight, with its dreamy menu of massages and beauty treatments. Don’t miss the sauna or the Blue Lagoon Ritual, which harnesses the springs’ natural silica, algae, and minerals to create a totally unique wellbeing experience. The hotel also has a choice of three fine dining restaurants with a focus on seasonal Icelandic ingredients.

Best Business: Hilton Reykjavik Nordica, Reykjavik

Though outside the historic center of the city, Hilton Reykjavik Nordica's business district location is ideal for corporate travelers, while still being within an easily manageable distance to attractions. You can host an event in one of 15 meeting rooms, all of which are equipped with the latest audiovisual equipment. The largest can host up to almost 650 attendees, while professional event planners are on hand to ensure that everything runs smoothly. The hotel also has a business center for all your printing, faxing, and emailing needs in addition to complimentary Wi-Fi throughout.

All rooms and suites come with a generous work area, a coffeemaker, and an LCD TV. Upgrade to an Executive Room or Suite for access to the Executive Lounge, where you’ll enjoy complimentary breakfast and refreshments as well as beautiful bay views and quiet seating areas. When you’re not working, recharge with a visit to the spa with its sauna and hot tubs. VOX restaurant serves contemporary Icelandic and Scandinavian cuisine. Meanwhile, the Lobby Bar is the ideal place for networking with your colleagues over cocktails.

Looking for more options? Check out our selection of the best Reykjavik hotels.

Best B&B: Guesthouse Heba, Stokkseyri

An hour from Reykjavik on Iceland’s beautiful south coast, Guesthouse Heba gives you the chance to experience local life in Stokkseyri, a picturesque fishing village. It’s steps from the sea, with a traditional wooden façade, blissfully cozy farm-style interiors, and four uniquely decorated guest rooms. Two have a balcony and jaw-dropping ocean views, while the other two look out over the mountains. All rooms charm with sloped ceilings and antique furniture, and free Wi-Fi provides modern comforts.

Each day starts with a complimentary homemade breakfast, consisting of traditional and abundant Icelandic fare served on the family china. Take the time to chat with the owners, an incredibly welcoming couple who treat guests like treasured friends and are happy to talk about the region’s history or recommend places to explore nearby. Reminisce about your adventures with the other guests in the communal lounge, where the walls are lined with Icelandic books, paintings, and curios. Parking is provided free of charge.

Best Hostel: Midgard Base Camp, Hvolsvollur

Backpackers in search of a unique hostel experience should head to Midgard Base Camp, located just outside the southern town of Hvolsvollur. You can choose to stay in a dormitory with bunk beds, privacy curtains, lockable draws, and high-speed Wi-Fi, or you can opt for a private double or family room. All dorms have shared bathrooms, while some private rooms are en-suite. Whichever room you choose, you’ll have access to a social area with hammocks and a foosball table. There's even a rooftop sauna and a hot tub.

Enjoy tasty, affordable meals at the on-site restaurant, then get to know your fellow travelers at the daily happy hour. It’s impossible to be bored at Midgard Base Camp, with a packed roster of events that includes live music, yoga classes, music nights, and cultural workshops. The hostel is also affiliated with Midgard Adventure travel agency, with tours leaving from the camp every day. Explore the surrounding countryside on a hiking, biking, or snowmobile day tour, or sign up for a multi-day adventure instead.

Most Unique: The 5 Million Star Hotel

For something completely different, consider staying at The 5 Million Star Hotel. Each room is a fully transparent bubble, allowing you to sleep out under the stars in winter or beneath the midnight sun in summer. In winter, you may even be treated to spectacular views of the Northern Lights – an experience that previous guests say is completely unforgettable. All bubbles are built on a wooden platform in a secluded patch of forest for complete privacy. A heater and electric blankets guard against the cold.

Amenities are basic (don’t expect Wi-Fi or cell reception), but there are bathroom and kitchen facilities in a nearby Service House. There are actually two separate camps. To stay at either, you have to book an overnight tour with the Buubble adventure company. Choose the Golden Circle itinerary to visit Thingvellir National Park, a geyser hot spring, and a secret thermal lagoon, or choose the South Coast itinerary for black sand beaches and breathtaking waterfalls. Both tours depart from and return to Reykjavik.