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11 Top-Rated Resorts in Iceland

Written by Freddy Sherman
Sep 12, 2019

Iceland is a spectacularly beautiful island nation, with a landscape filled with the evidence of nature's power. It's a country of glaciers, volcanoes, mountains, and lava fields, some of which are surprisingly accessible to visitors.

Less than a six-hour flight from most U.S. East Coast cities, Iceland has a wide range of resort options. The main city is Reykjavik, and there are many hotels and resorts in and near the capital. The Ring Road, also known as Route 1, goes all around the island nation (which is about the size of New York State) and connects most populated areas.

Recent visits from celebrities like Beyonce and Gwyneth Paltrow (and their social media posts while visiting) have further increased the country's popularity as a tourist destination with incredible natural beauty. Iceland is also an excellent place to view and witness the light show in the sky, the Northern Lights. Formally known as Aurora Borealis, it can be viewed from Reykjavik from September through April, with the best views from countryside resorts.

Find the best place to stay in this wildly beautiful nation with our list of the top resorts in Iceland.

1. The Retreat at Blue Lagoon Iceland

Photo Source: The Retreat at Blue Lagoon Iceland

Located just outside the capital city of Reykjavik, the Blue Lagoon is rightfully one of Iceland's top tourist attractions. It's a giant, man-made, mineral hot springs spa and pool, heated by the country's geothermal energy from a local geothermal power plant. The water in the swimming area is about 100 degrees Fahrenheit (38 degrees Celsius) and contains a lot of minerals and salts. The popular tourist site lacked an on-site hotel, but now there's a luxurious 5-star spa resort right at the lagoon.

The Retreat at Blue Lagoon Iceland is a 62-suite spa resort located in an ancient lava field at the Blue Lagoon. Spa treatments at this Blue Lagoon resort make use of the local silica-rich mud and mineral-rich water from the lagoon. When you get hungry, enjoy a meal overlooking lava fields at Moss, the resort's restaurant, inspired by local lichen.

Address: Nordurljosavegi, Nordurljosavegur 11, Grindavik 240, Iceland

Accommodation: The Retreat at Blue Lagoon Iceland

2. Fosshotel Myvatn

Photo Source: Fosshotel Myvatn

Fosshotels is an Icelandic hotel chain with 12 locations around the country. Myvatn refers to the large volcanic lake and the surrounding area in northern Iceland, home to the Fosshotel Myvatn. Aside from the lake, the area has a large, man-made mineral-rich hot springs lagoon, like the Blue Lagoon, called the Myvatn Nature Baths. It's about 20 minutes from the resort and well worth a visit.

The Fosshotel is across the Ring Road from Lake Myvatn, with most of the rooms and suites offering beautiful views of the lake and surrounding mountains (avoid the rooms with parking lot views). There's a lot of green space, and local sheep sometimes graze right outside your window.

The hotel's restaurant looks out onto the lake and has a menu with something for every palate. There's a small fitness center and a sauna, perfect for relaxing after a long day of hiking. The high-speed Wi-Fi is free, as is the extensive breakfast buffet.

Address: Grimsstadir, 660, Skutustadahreppur, Lake Myvatn 0660, Iceland

Accommodation: Fosshotel Myvatn

3. Tower Suites Reykjavik

Photo Source: Tower Suites Reykjavik

This urban boutique resort in downtown Reykjavik is worth considering as it's located atop the city's tallest building. The height (you are at the highest point in the city) gives the eight stylish suites some truly incredible views across the city skyline, the bay, and the raw natural landscape beyond. The midnight sun allows guests to enjoy the views 24 hours a day.

The Tower Suites gained a lot of popularity lately after a visit by Gwyneth Paltrow and her family, followed by a feature in her online magazine. The suites, each individually named and styled, all have floor-to-ceiling windows and are more like luxury apartments.

Guests can opt for Full Concierge Service or Invisible Service for their stay. Full Concierge Service means you're greeted by a staff member, breakfast is served in your suite each day, and arrangements are made at a nearby gym should you want to work out. With Invisible Service, it's all automated, with your smartphone serving as the elevator pass, room key, and tour booking pass. In both cases, rooms are all-inclusive in that they come with a stocked refrigerator and pantry.

Address: Katrinartuni 2, Hofdatorg Tower, Top floor, Reykjavik 105, Iceland

Accommodation: Tower Suites Reykjavik

4. Icelandair Hotel Hamar

Photo Source: Icelandair Hotel Hamar

This boutique golf resort (Iceland's only golf resort) is about an hour from Reykjavik, just outside the town of Borgarnes. It sits on an 18-hole golf course, and most of the rooms have fairway views (make sure yours doesn't overlook the parking lot). As indicated by its name, the hotel is owned by Icelandair, one of nine hotels the airline operates throughout the country. All have excellent service, and all provide clean, modern accommodations.

All the rooms and suites at Hotel Hamar have their own patios, and all have underfloor geothermal heating. The patios connect to pathways that allow you to explore the property and its beautiful setting. Geothermal energy is also used to heat the two, large outdoor hot tubs, which offer great views of the Northern Lights and the surrounding mountain range.

Address: Hamravik 2, Golfvollurinn Hamri i Borgarnesi, Borgarnes, Borgarbyggd 310, Iceland

Accommodation: Icelandair Hotel Hamar

5. Hotel Ranga

Photo Source: Hotel Ranga

Outside, it may look like a giant log cabin, but Hotel Ranga is probably the country's most luxurious resort that's not a hotel in the city of Reykjavik. It's a popular destination for Icelandic honeymooners and also for celebrities. Hotel Ranga was another place visited (and blogged about) by Gwyneth and family.

The resort is about an hour's drive from the capital, on the more secluded south side of the island. It's isolated; next to a river; and surrounded by Iceland's raw, natural landscape, about 10 minutes from the town of Hella. The resort is considered one of the best places to view the Northern Lights, as it's quite far away from any other development or light sources.

There are 52 rooms and suites with some extremely over-the-top, continent-themed signature suites. Outside, there are three large mineral spas, heated by geothermal energy. There's also a popular restaurant, which sometimes draws diners from Reykjavik who make the drive just to eat here. Luxurious touches like a limited room service menu and available in-room massages add to the experience.

Address: Sudurlandsvegur, Hella 851, Iceland

Accommodation: Hotel Ranga

6. Hotel Grimsborgir

Photo Source: Hotel Grimsborgir

This luxury resort hotel is in the heart of the area known as the Golden Circle, next to a swiftly flowing river. The Golden Circle is a popular tourist route in the south of the country, starting and ending in Reykjavik. The 320-kilometer-long route includes many of Iceland's natural wonders and must-see tourist sites.

The Hotel Grimsborgir is about an hour east of Reykjavik, not far from the town of Selfoss. There are 68 rooms, including some suites, some studio apartments (for four people), and some big apartments (for eight people). All the accommodations come with balconies, and the property has a large outdoor deck and terrace. A highlight here are the 29 geothermal hot tubs, some of which are part of the private suite and apartment accommodation amenities.

When you get hungry, the hotel is home to a popular restaurant, which focuses on Icelandic cuisine and uses fresh, locally sourced ingredients. Each night, there is live musical entertainment in the restaurant. Each morning, it's the site of a lavish breakfast buffet. On request, they will prepare a picnic lunch for you to take on your adventures.

Address: Asborgir 30, Selfoss 801, Iceland

Accommodation: Hotel Grimsborgir

7. The Five Million Star Hotel

Photo Source: The Five Million Star Hotel

With the natural landscape of Iceland being so beautiful, why not skip the traditional hotel room and spend the night under the stars in a giant plastic bubble. A stay at The Five Million Star Hotel includes tour experiences and an overnight stay in a bubble.

The hotel has two sites: South Coast and Golden Circle, where they have groups of large, clear, plastic bubbles, set up as luxurious tents for two. The bubble allows you to have breathtaking views of the stars, falling snow (in winter), and the Northern Lights. Heated with geothermal energy, they don't fog up, and a full restroom and shower facilities are a few steps away. The bubbles are like giant tents with double beds.

During the winter, the bubbles are only rented as part of a two-day tour experience. Different itineraries are offered in the winter and summer, and they stop at all the popular natural wonders and sites. In the summer, the hotel offers a self-drive option, which allows you to just stay in the bubble without doing a tour.

Address: Hrosshagi 2, Skalholt 801, Iceland

Accommodation: The Five Million Star Hotel

8. Milk Factory

Photo Source: Milk Factory

As its name implies, this guesthouse resort really was a former milk processing plant. The Milk Factory is in the coastal town of Hofn, located in the southeast part of the country. The big attractions here are the mountains and the Vatnajökull Glacier, the biggest glacier in Europe. All the rooms have views of both. Six of the hotel's seventeen rooms are family rooms for four people, with two bedrooms on two levels. Breakfast, served in the hotel's small dining room, is included.

The area is filled with outdoor activity possibilities, and the hotel can help arrange any of them for you. Hiking, ice-cave exploring, horseback riding, snowmobiling, and more. You're also close to the Jökulsárlón Glacial Lagoon, one of the country's must-visited natural wonders, as well as several national parks.

If you want to swim or enjoy a Jacuzzi, guests can access the Hofn community pool center, about a mile away. There's a large pool, several Jacuzzis, a steam room, and even an ice bath. The Milk Factory's rural location makes it a great place to view the Northern Lights.

Address: Dalbraut 2, Hofn 780, Iceland

Accommodation: Milk Factory

9. Icelandair Hotel Herad

Photo Source: Icelandair Hotel Herad

If you want to experience a stay in eastern Iceland's reindeer country, the Icelandair Hotel Herad is an excellent choice. Located close to a lagoon near the town of Egilsstadir, it's a quick, hour-long flight from Reykjavik or could be part of a road trip visit exploring the whole country. The rural setting puts some amazing hiking, bird-watching, and fishing just outside your newly renovated, contemporary, Scandinavian-style accommodations.

The hotel is surrounded by hiking trails, and they can make arrangements for you to access the local swimming pool complex. Better yet, drive or get a ride to the natural hot springs mineral pool at Laugarfell, about 40 minutes away.

Dining at the restaurant here is an Icelandic foodie adventure, as they use only fresh, local ingredients. These include rather interesting things like reindeer, wild game, and goose (try the reindeer burgers). The homemade jams and syrups are very popular (they make great souvenir gifts); they're made from fresh-picked berries. If your visit falls on a Sunday, don't miss the lavish Sunday Brunch (spring and summer only).

The Hotel Herad has a large terrace, which is a popular spot to view the Northern Lights.

Address: Midvangur 5-7, Egilsstadir 700, Iceland

Accommodation: Icelandair Hotel Herad

10. Fosshotel Glacier Lagoon

Photo Source: Fosshotel Glacier Lagoon

This starkly beautiful resort, another Fosshotel property, is located adjacent to the Jökulsárlón glacier lagoon, the nearby Diamond Beach, and the hikeable glaciers of Vatnajökull National Park.

It's another remote design hotel, set into the base of a mountain, a part of the natural landscape. The minimalist design of the rooms and suites allows guests to focus on the beauty that is just outside their window.

The restaurant at the Fosshotel Glacier Lagoon is also very popular, as they use fresh local produce and products. The menu is also known for its wide selection of vegan and vegetarian selections.

Address: Hnappavellir, Vatnajokull National Park 785, Iceland

Accommodation: Fosshotel Glacier Lagoon

11. Siglo Hotel

Photo Source: Siglo Hotel

This quaint, contemporary yet rustic waterfront resort is on what's known as the Troll Peninsula (Tröllaskagi), in northern Iceland. It's near Akureyri, the capital of the north. The Siglo Hotel is built right into the little marina village of the harbor in the fishing town of Siglufjörður. The scenery is spectacular, as you have harbor views on one side and mountain views on the other. The village is at the mouth of a fjord, where it empties into the sea.

If you want to ski, local ski resorts are a short drive away, and you are right next to the herring museum. Seriously, it's a museum dedicated to the town's biggest catch: herring.

There's a small café in the lobby of the Siglo and an excellent seafood-centric restaurant called Sunna. It's all about the fresh fish and seafood, which is secured by the chef each day from the local fishermen.

Address: Snorragata 3, Siglufjordur 580, Iceland

Accommodation: Siglo Hotel

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