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Top 3 Hotels in Iceland for 2023

by Flynn Owen
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Green by definition – its energy provided by more than 200 volcanoes and a huge number of hot springs – Iceland is a must-visit for anyone who loves nature in its rawest, wildest incarnation. And the best hotels in Iceland are the perfect place to start if you’re planning an adventure to the Land of Fire and Ice.

In Iceland, glaciers loom roadside, waterfalls thunder down within arm’s reach, geothermically toasty rivers invite you to strip off and plunge right in, and whales leap out of the sea beside you – it’s a place like nowhere else.

While this country is all about the great outdoors, the best hotels in Iceland respond to the landscape in very special ways, providing alfresco amenities such as hot tubs but also warmly welcoming interiors that emulate rather than try to rival the landscape.

Local stone, wood, grasses and other materials are used in their construction – as seen most dramatically in the Torfhús Retreat with its green-roofed turfhouses – and earthy, sombre palettes echo the colours of the local moss, heather, berries and black-sand beaches.

A world away from this are the cosmopolitan temptations of Reykjavík, one of Europe’s smallest capitals but one that punches above its weight in terms of art, history, shopping and dining. And tucked in among these treasures are some of the best hotels in Iceland – chic but welcoming urban boltholes such as the Sandhotel, where you can hole up in the bar-bistro with cinnamon-spiced buns still warm from the adjoining bakery.

Check out the best hotels in Iceland for 2023:

1. Torfhus Retreat, Golden Circle

East of Reykjavik, this charming, cosseting collection of traditional grass-roofed stone turfhouses is proof that the area containing Geysir, Gullfoss waterfall and Thingvellir National Park is worth more than a day’s coach tour from the capital. Check into the remote Torfhus Retreat far from light pollution and you’ll enjoy glorious night-sky views from your private geothermally heated basalt hot tub – and, in winter, a high chance of spotting the Aurora Borealis.

There also a few Torfbaer – individual suites, with a geothermally heated plunge pool shared between three. Staff will arrange local outings ranging from snorkelling between tectonic plates to horse-riding and Super-Jeep expeditions through the Highlands.

2. The Retreat at Blue Lagoon, South-west Iceland

Spa hotels don’t come any more atmospheric than this luxury property at the world-famous thermal pools in their otherworldly setting of lava fields. Tucked away in the island’s south-west corner but closer to the airport than Reykjavík (and hence great for a pre- or post city-break stop-off), The Retreat at Blue Lagoon blends designer furniture with low-key references to the surrounding landscape such as fireplaces made of lava bricks.

But the spa’s the star, of course – vast, state-of-the-art, and with access to its own tranquil section of the Blue Lagoon, far from the madding Instagrammer crowds. Complimentary yoga sessions and hikes add to the feel of a blissed-out escape.

3. Umi Hotel, Hvolsvollur

With its own deserted stretch of black-sand beach, friendly resident pooch Breki and fresh modern decor, this tiny gem of a family-run hotel on the road out to Vik is an alluring stop-off for those making their way along the south coast.

Just a few minutes from the mighty Skógafoss waterfall, Umi Hotel also has views of the Westman Islands from its restaurant, and the subglacial volcano Eyjafjallajokull (the one that caused all the ash-cloud dramas of 2010) from its lounge-bar. Nearby activities include ice-cave exploring, glacier hikes and snowmobiling sorties.


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