The 8 Best Luxury Hotels
in Iceland

Orsolya Kako

Iceland Travel Expert

At Butterfield & Robinson, our hotels aren’t prosaic—they’re pure poetry.

From castles and riads to ryokans and monasteries, we source lodgings that aren’t just places to crash, but one-of-a-kind spots as intimate, authentic and sublime as the rest of your journey—and packed with personal touches from our hotelier friends.

Below we’ve rounded up a few of the best luxury hotels in Iceland, where you can do so much more than simply rest your head.

But be warned: there may be tears when it’s time to say goodbye!


Hotel Ranga, Hella

With a noticeable lack of timber in the country, Rangá was entirely constructed from imported Canadian lumber, from the walls to the furniture to the remarkable bar stools (watch out for them).

Best Luxury Hotels in Iceland, Hotel Ranga Hella

The location sits at the mouth of the highlands with spectacular access to Hekla, one of the country’s most impressive volcanoes.


Hotel Borg, Reykjavik

Hotel Borg combines old time elegance with modern style and overlooks the beautiful square of Austurvöllur. All rooms have custom-made furniture with modern amenities and Art Deco style throughout.

Best Luxury Hotels in Iceland, Hotel Borg Reykjavik

The Borg, which has become one of Reykjavik’s landmarks, also features the Silfur restaurant, offering exquisite Icelandic cuisine served in beautiful surroundings.

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Hotel Ion, Selfoss

Beautifully located on the slopes of Mt. Hengill, the Ion features incredible views over Lake Pingvallavatn and the surrounding mountains.

Best Luxury Hotels in Iceland, Hotel Ion Selfoss

Their focus is on simple Icelandic country hospitality; hot springs, steam, the Northern Lights—here, you’re surrounded by natural beauty.


UMI Hotel, Hvolsvöllur

Backdropped by a mountain chain and with views of the subglacial Eyjafjallajökull volcano, this countryside retreat on the South Coast is Icelandic minimalist elegance at its finest. 

Best Luxury Hotels in Iceland, UMI Hotel Hvolsvöllur

A collection of 28 sophisticated, light-filled rooms boast either mountain or ocean views, complimentary Wi-Fi and locally sourced and organic toiletries.


Silica Hotel, Grindavík

Nestled within the volcanic landscape, the Silica Hotel is a paradise of well-being. Take advantage of Iceland’s famous Blue Lagoon, or indulge in the waters of Silica’s private, mineral-rich waterscape. 

Best Luxury Hotels in Iceland, Silica Hotel Grindavík

Fresh and light-filled guestrooms give way to other-worldly views across the blanket of moss, which you can revel in from your personal veranda.


Hilton Canopy Hotel, Reykjavik

Situated in the Reykjavík 101 district in Reykjavík, the new Canopy by Hilton Reykjavik City Centre is centrally located for exploration and also boasts a restaurant, bar and free WiFi throughout the property.

Best Luxury Hotels in Iceland, Hilton Canopy Hotel Reykjavik


Hotel 101, Reykjavik

101 Hotel is a boutique hotel, situated in the heart of Reykjavik. It offers an onsite spa and art gallery as well as rooms designed with clean lines and simple palates.

Hotel 101 Reykjavik, Best Luxury Hotels in Iceland

Its restaurant and bar, incorporating with high walls and a glass ceiling, offers a casual setting where modern Icelandic meets international cuisine.


Hotel Flatey, Flatey

Hotel Flatey is situated in the center of the old village in the very heart of Breiðafjörður. The houses are timber structures dating from the island’s former times of prosperity, and most have been restored in their original style.

Hotel Flatey, Best Luxury Hotels in Iceland

The hotel’s dining room and guest rooms are in converted warehouses and guests can savoir the unique ambiance of the island in cozy accommodation, enjoying choice food with a view over the village and coastline.

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