Craft Your Icelandic Adventure Around These 10 Enchanting Hotels

Few destinations in the world possess the enchanting allure of Iceland. Roughly the size of Ohio, this compact island nation blends rugged, ever-changing landscapes—home to an active volcano that often disrupts travel—with a rich Viking history, a vibrant design culture on par with its Nordic neighbors, and a strong commitment to sustainability.

The hotel experience thrives at these unique intersections as well. For example, a five-star spa resort like The Retreat at Blue Lagoon offers urban sophistication inside while outside lies vast natural expanses where trolls and elves are said to wander, alongside geothermal baths heated by magma deep below. Similarly, the Ion Adventure Hotel features a postindustrial exterior, yet its interiors showcase thoughtful eco-friendly design and charming local craftsmanship.

Regardless of the type of accommodation—be it a bubble dome, luxury hotel, or remote retreat—the common thread among Icelandic lodgings is that they serve as gateways to adventure. Often, you need not leave the premises to find peace in nature, whether it’s through soaking in geothermal baths, riding the country’s unique horses, or marveling at the stunning aurora borealis. These 10 extraordinary hotels, featured in our Hotels We Love series, beautifully complement the natural wonders that surround them.

The Bubble Hotel

For many visitors to Iceland outside the peak summer months, spotting the mesmerizing aurora borealis is a primary goal—and this might be the perfect place to do it. Dubbed the Five Million Star Hotel, The Bubble Hotel is nestled between two private evergreen forests near Selfoss on the south coast and Reykholt in the Golden Circle. These transparent, spherical accommodations provide an ideal setting for enjoying the light display right from your cozy bed, complete with duvets, blankets, and a sheepskin throw.

If you happen to stay in one of these domes during a winter snowfall, you'll experience a magical snow-globe effect (with the snowflakes on the outside of the bubble). The retreat is also committed to sustainability, featuring only one electric floor lamp and a heating system powered by renewable hydropower. Do note that toilets, showers, and kitchen facilities are shared and located in a nearby service house. Starting at $400

Eleven Deplar Farm

Eleven Deplar Farm offers unparalleled exclusivity for travelers venturing to a remote area in Iceland’s far north. With only 13 guest suites crafted in a modern Nordic style, this former 15th-century sheep farm turned luxury lodge presents a serene escape in the lush Fljót Valley on the Tröllaskagi Peninsula. Here, a wide array of adventures awaits, including hiking, horseback riding, mountain biking, kayaking, fly-fishing, and skiing.

Guests at the black-timber, turf-roofed retreat can relax in the expansive spa, geothermal-heated indoor/outdoor pool, hot tubs, or sauna. Alternatively, they can simply enjoy the breathtaking views of rolling hills and striking mountain peaks from the floor-to-ceiling windows in the dining area, lounge, spa, and gym. Thanks to its off-the-grid location and small-group capacity, Deplar Farm is largely self-sufficient and sustainable, utilizing renewable geothermal energy and offering locally sourced meats in its exclusive Icelandic dining room. Starting at $4,436, all-inclusive

Eyja Guldsmeden

Embodying a boho-chic aesthetic and relaxed atmosphere, the 65-room Eyja Guldsmeden is ideally situated near Laugavegur, Reykjavík's main shopping street. Housed in a creatively transformed former office building, this hotel offers numerous amenities, including a restaurant and bar focused on local ingredients, as well as a rare hotel gym in Reykjavík. Guest rooms are decorated in earthy tones and feature elegant four-poster beds, hardwood flooring, and natural textiles like sheepskin throws. As part of the Denmark-based Guldsmeden Hotels chain, this eco-certified establishment prioritizes sustainable, locally sourced, fair-trade, and cruelty-free products, including down-free bedding and organic refillable bath amenities. Starting at $173

Highland Base Kerlingarfjöll

Iceland’s remote central highlands have largely remained undiscovered by visitors and even many locals, making Highland Base Kerlingarfjöll, from the creators of the Retreat at Blue Lagoon, a true game changer. Opened in 2023, the hotel features historic buildings from a long-established ski school alongside newly constructed structures made from sustainable, cross-laminated larch wood. Upscale amenities include 46 hotel rooms, two suites, and six luxurious lodges, all styled in a Nordic aesthetic with light wood, textured linen bedding, and cozy reading corners next to expansive picture windows. To ensure accessibility for travelers of all budgets, the complex also offers a campground, original A-frame cabins, hiking huts, and 20 more basic hostel rooms adjacent to the main building.

In keeping with its association with the Blue Lagoon, the hotel has recently unveiled a complex featuring geothermal baths, a sauna, and a cold plunge. After a morning filled with hiking, e-mountain biking, backcountry skiing, or snowmobiling, guests can visit the inviting waffle bar; for an additional fee, they can enjoy unlimited freshly made waffles served with whipped cream and jam—an homage to the ski school days when the aroma of heart-shaped Icelandic waffles would lure kids off the slopes each afternoon. Read Dinogo’s full review of Highland Base Kerlingarfjöll. Starting at $430

Hótel Búðir

Nestled on the picturesque Snaefellsnes Peninsula—a region in western Iceland celebrated as one of the globe’s most sustainable tourism spots—Hótel Búðir offers not only rustic charm but also exceptional culinary experiences. The hotel’s restaurant boasts a seasonal Icelandic menu, crafted from fresh local produce and seafood, showcasing expertly prepared dishes like the arctic char tartare and succulent lamb. Additionally, the nearby bar features one of the largest whiskey selections in Iceland. Recently expanded with a new wing, the hotel now offers 52 upscale country-cottage rooms, all with views of the untamed wilderness (glaciers, lava fields, mountains, and coastline). When you're ready to explore, the team can arrange a variety of activities, including hiking, glacier and cave exploration, horseback riding, and whale watching. Starting at $268

Hotel Húsafell

Located in the rugged inner Highlands of West Iceland, Húsafell is a Scandinavian-inspired retreat that offers a wealth of nature-based activities in the area—think glacier hiking, fishing, cycling, caving, and horseback riding, to name just a few. However, those eager for adventure don’t need to venture far from the hotel, as there are geothermal pools, numerous hiking trails, and even an eco-certified nine-hole golf course on-site. (Reserve a tee time during the midnight sun for an especially surreal experience.)

The property also features a fine-dining restaurant that serves seasonal Nordic- and Japanese-inspired dishes, with chefs foraging for fresh ingredients. Notable offerings include hand-dived Westfjords scallops and grilled free-range horse meat served on birch skewers with Icelandic wasabi leaves, rye bread miso, and honey. The 48 bright and contemporary rooms are equipped with heated floors, original coal portraits from esteemed Icelandic artist Páll Guðmundsson, and organic Icelandic toiletries made from local birch. Fully self-sustainable, the resort meets all its energy requirements through on-site hydroelectric power plants, which guests are welcome to tour. Starting at $368

Ion Adventure Hotel

The eco-friendly Ion Adventure Hotel, part of Design Hotels and located just south of Þingvellir National Park, was originally a workers’ inn for the nearby geothermal power plant. Today, it features a striking Nordic-modern design that prioritizes sustainability. The exterior, made of concrete, glass, and black lava, harmonizes with the surrounding volcanic terrain, while the interior showcases locally sourced and repurposed furnishings and materials. Highlights include a sauna constructed from lava rocks, sinks crafted from recycled rubber tires, and lamps made from reclaimed wood. The hotel’s energy and heating, along with its mineral-rich plunge pool, are supplied by the adjacent renewable geothermal energy plant. Expect organic and fair-trade products throughout the 45 industrial-chic guest rooms, the Nordic restaurant kitchen, and the glass-enclosed Northern Lights bar. Ion truly lives up to its adventurous name, serving as an excellent base for exploring the nearby national park, which offers glacier trekking, fly-fishing, horseback riding, and more. Starting at $334

The Retreat at Blue Lagoon

The expansive geothermal waters of Iceland’s Blue Lagoon are among the country's top attractions for good reason. Here, soothing rejuvenation awaits in a surreal setting of impossibly blue, mineral-rich springs that flow over 800-year-old lava fields. Guests of the 60-suite The Retreat at Blue Lagoon enjoy near-exclusive access, including to a private section of the warm lagoon. The hotel's minimalist architecture and design elements blend seamlessly with the volcanic landscape, featuring lava-brick fireplaces and large picture windows, while the spa provides signature treatments like in-water massages.

The on-site restaurant, Moss, is one of only three Michelin-starred establishments in Iceland, featuring a seven-course tasting menu that includes creations like cod-skin crisps, bread served with skyr-whipped butter, and hand-dived scallops accompanied by sea urchin and caviar—along with desserts that resemble lava rocks or moss-covered forest floors. Guests can also reserve a tasting in the wine cellar, an underground space formed from naturally occurring lava rock dating back to an eruption in 1266. Starting at $1,602

The Reykjavík Edition

This branch of Ian Schrager’s trendy lifestyle brand opened in 2021, adjacent to the waterfront Harpa concert hall. The lobby is adorned with volcanic basalt rock, echoing the island’s natural landscape, featuring an impressive totem inspired by wayfinding cairns, surrounded by a bench draped in sheepskins and cushions. In contrast, the 253 guest rooms and suites embody a softer side of Nordic minimalism, with a light color palette that includes ash and gray oak wood, along with locally crafted details such as vibrant wool throws from Ístex, ceramics by Guðbjörg Káradóttir, and landscape photography by Pall Stefansson and Ragnar Axelsson.

Edition hotels are known for their outstanding food and beverage selections, and this one is no exception. The Michelin-recommended Tides offers refined dishes such as lobster and langoustine croquettes, alongside a salad featuring 1,000-day dry-aged feykir cheese. For a more interactive dining experience, there’s an eight-person chef’s counter. However, the most exciting spot in the venue is at Tölt, a bar named after the unique fourth gait of the Icelandic horse. Here, cocktails incorporate unique ingredients like skyr-clarified Aperol, oak-aged brennivín (a strong aquavit known as “Black Death”), and even vermouth infused with hákarl, or notably pungent fermented shark. From $506

Torfhús Retreat

Experience a step back in time at this tranquil retreat, which may seem remote but is just a short drive from the popular natural attractions of the Golden Circle. The turf-roofed design draws inspiration from nearby Stöng, the remnants of an ancient Viking farm dating back to the 11th century. Accommodations feature heated basalt-stone hot pools and are divided into the two-bedroom Torfhús cottages, one-bedroom Torfbær Suites, and a spacious four-bedroom villa that can accommodate eight guests, complete with a cold-plunge pool and sauna.

You'll discover local design elements throughout, such as salmon-skin leather, a sofa crafted from a fishing boat, and an old horse cart repurposed as the breakfast counter. Most of the ingredients are sourced from within a 10-mile radius, featuring mountain-grazed lamb, local salmon and char, as well as vegetables, fruits, and herbs cultivated in geothermally heated greenhouses. The retreat also houses Icelandic horses that you can meet, learn about, and ride through the picturesque countryside. From $860

Additional reporting by Lyndsey Matthews.