Iceland is well known as being one of the best places in the world to spot the Northern Lights, which light up the dark skies of the region each winter. The country is also renowned for its volcanic activity, plunging waterfalls, towering mountain peaks, and erupting geysers. Safe to say, it’s a year-round destination that tops many bucket lists. And with a thriving tourism industry, Iceland has led to a rise in the number of quality hotel options for travelers.
From quaint boutique hotel offerings in rural locations to modern luxury escapes in Reykjavik and beyond, our editors have selected the best sustainably-minded hotels in Iceland to help you plan your trip to the Land of Fire and Ice.
Travel note: Please stay informed of the current travel conditions.
Best Hotels In Reykjavik
Perfectly situated to explore the vibrant heart of downtown Reykjavik and conveniently located near the Reykjavik Keflavik Airport, these accommodations are well-situated no matter what brings you to Iceland.
Eyja Guldsmeden Hotel
Family-owned Eyja Guldsmeden, a boutique eco-hotel in downtown Reykjavik, focuses on sustainability in all aspects of its property. This is especially apparent in its Signature breakfast, which features organic and local produce served alongside the hotel’s homemade Icelandic skyr and muesli. Expect personalized service, panoramic city views, and Nordic hospitality in the heart of the capital.
Sustainability Story: Eyja Guldsmeded Sustainable Management Plan 2023
Address: Brautarholt 10, 105 Reykjavík, Iceland
Rooms: From $185 per night
Book With: Expedia | Tripadvisor | Official Hotel Site
Exeter Hotel
The award-winning Exeter Hotel is located steps away from Reykjavik harbor and combines tasteful Icelandic tradition and modernity. Each room and suite offers a unique personality, with garment stands used instead of closets for a contemporary and space-saving effect. Artwork from a local artist adorns the walls and all guests enjoy included access to a traditional Icelandic sauna.
Sustainability Story: Exeter Hotel Sustainability Policy
Address: Tryggvagata 12, 101 Reykjavík, Iceland
Rooms: From $200 per night
Book With: Expedia | Tripadvisor | Official Hotel Site
Reykjavik Konsúlat Hotel, Hilton Curio Collection
The boutique Reykjavik Konsúlat Hotel, in the heart of the oldest section of Iceland’s capital, was once a 1900s department store and is now frequently recognized as one of Iceland’s best hotels. It’s close to the iconic Harpa Concert Hall and is adjacent to the Konsúlat Wine Room, one of the city’s finest bars. As a member of the Hilton family, Reykjavik Konsúlat Hotel endeavors to reduce waste and drive towards a circular economy as part of its Travel with a Purpose program.
Sustainability Story: Hilton Travel With Purpose Report
Address: Hafnarstraeti 17-19, Reykjavik 101, Iceland
Rooms: From $329 per night
Book With: Expedia | Tripadvisor | Official Hotel Site
Hotel Borg by Keahotels
Sustainability is at the heart of all things at Hotel Borg, which runs on renewable energy, uses local suppliers, and supports community development projects. This Art Deco landmark overlooks Reykjavik’s Parliament Square and has played host to heads of state and celebrities. Dine at the newly opened Borg Restaurant, which uses classic and traditional Icelandic cooking methods, after a relaxing afternoon at the Borg Spa (also open to guests of the boutique Apotek Hotel, another city-center Keahotels property.)
Sustainability Story: Keahotels Sustainability Policy
Address: Pósthússtræti 11, 101 Reykjavík, Iceland
Rooms: From $248 per night
Book With: Expedia | Tripadvisor | Official Hotel Site
Sand Hotel by Keahotels
The simple but modern and cozy Sand Hotel promises a comfortable stay in Reykjavik, just a short distance from Hallgrímskirkja. Rooms are equipped with contemporary Nespresso machines, Bluetooth speaker, and flat-screen TV, and queen-sized beds are dressed with soft Duxiana pillows to ensure a restful night’s sleep.
Sustainability Story: Keahotels Sustainability Policy
Address: Laugavegur 34, Reykjavik 101, Iceland
Rooms: From $296 per night
Book With: Expedia | Tripadvisor | Official Hotel Site
The Reykjavik EDITION
Introducing a new level of luxury hotel to Reykjavik’s hotel scene, the 5-star Reykjavik EDITION is adjacent to the Harpa concert venue and within walking distance of other city attractions. The Northern Lights can be enjoyed when visiting during winter from the seventh-floor wrap-around bar. You can opt to let your hair down at the onsite nightclub and visit the unique spa bar, offering treatments and smoothies by day, and pick-me-ups ahead of a night on the town after dark.
Sustainability Initiative: Artisan In-Room Water Carafe Sets
Address: Austurbakki 2, 101 Reykjavík, Iceland
Rooms: From $563 per night
Book With: Expedia | Tripadvisor | Official Hotel Site
Additionally, you may just wish to stay like a local at Center Hotels, a boutique hotel with commendable efforts to work toward a Green Key. Read more about their journey to become green.
Hotels Near Reykjavik
Whether you’re drawn to the Blue Lagoon’s famous geothermal waters on the Reykjanes Peninsula or seek a home base for exploring the Golden Circle, these accommodations are just a short drive from Reykjavik.
ION Adventure Hotel
Twinned with the ION City Hotel in Reykjavik and a Design Hotel member, the rural and advantageous location of the ION Adventure Hotel means that it is one of the best places in Iceland to see the Northern Lights. A winner in the sustainability category at the Boutique Hotel Awards, there’s a focus on fresh, local produce and renewable energy.
Sustainability Story: The Hotel
Address: Nesjavellir vid Thingvallavatn, 801 Selfoss, Iceland
Rooms: From $364 per night
Book With: Expedia | Tripadvisor | Official Hotel Site
Hotel Grímsborgir by Kea Hotels
Guests at the riverside Hotel Grímsborgir can enjoy access to a private or communal hot tub, the perfect place for soaking up the views of the Golden Circle. Tastefully appointed chalets feature their own cozy firesides, and there’s an intimate feel to the accommodation, with just ten apartments spaced out generously amongst the countryside.
Sustainability Story: Keahotels Sustainability Policy
Address: Ásborgir 48, 805 Selfoss, Iceland
Rooms: From $275 per night
Book With: Expedia | Tripadvisor | Official Hotel Site
Hótel Geysir
A family-run establishment, the Hótel Geysir opened in 2019 and was constructed with the aim of blending into its surroundings in the Haukadalur geothermal area. On arrival, travelers will notice that the timber façade blends seamlessly into the environment, and large windows in each room allow you to marvel at the surrounding scenery. BioStay-certified, each booking at Hótel Geysir protects 2 acres of tropical rainforest.
Sustainability at Hótel Geysir
Address: Geysir, Haukadalur 806, Iceland
Rooms: From $136 per night
Book With: Expedia | Tripadvisor | Official Hotel Site
360 Hotel & Spa
There are just 13 rooms and suites at the luxury boutique 360 Hotel & Thermal Baths, with panoramic views so spectacular that the hotel was named for them. The rooms are made to enjoy the expansive landscape, designed with floor-to-ceiling windows and a rustic finish, plus concrete walls, blackout curtains, soundproofing, and private balconies. All guests have access to the private thermal baths, comprising an outdoor and indoor pool, cold water pool, and sauna.
Sustainability Story: Environmental and Community Policy
Address: Mosató 3, Selfoss, Iceland
Rooms: From $630 per night
Book With: Expedia | Tripadvisor | Official Hotel Site
The Retreat Hotel, Blue Lagoon
An award-winning 60-suite resort attached to the famous Blue Lagoon, The Retreat boasts amenities such as a Michelin-starred Moss restaurant and its own private lagoon sourced from the same water as the Blue Lagoon itself. Alongside the nearby Silica Hotel, The Retreat offers a comprehensive wellness package to ensure the most rejuvenating stay at the Blue Lagoon. Treatments at the Retreat Spa are included for all guests, and other exclusive inclusions such as morning yoga and traditional Icelandic coffee are available for your pleasure.
Sustainability Story: Sustainability at the Retreat
Address: Norðurljósavegur 9, 240 Grindavík, Iceland
Rooms: From $1597 per night
Book With: Expedia | Tripadvisor | Official Hotel Site
Torfhús Retreat
Icelandic tradition meets modernity meets eco-luxury at Torfhús, inspired by historic Viking settlements. Torfhús residences are chiseled from local stone and topped with reclaimed timber and turf, making for a unique luxury accommodation option in Iceland. Each Torfhús unit is equipped with a kitchen, separate living area, geothermally heated basalt pool, and veranda, whilst the interiors maintain tradition with handcrafted furniture and wooden interior walls.
Sustainability Story: Sustainable Luxury
Address: Dalsholt, 806 Selfoss, Iceland
Rooms: From $845 per night
Book With: Expedia | Tripadvisor | Official Hotel Site
Hótel Eldhestar
The interior at Hótel Eldhestar is inspired by Icelandic nature, with the hotel constructed fully in accordance with environmental and ecological guidelines. It was the first hotel in Iceland to be awarded the Nordic SWAN eco-label. Rooms are fitted with luxurious beds including bedding made from horsehair and wool, continuing the natural theme. Eldhestar means ‘Volcano Horses’, and the hotel is one of the best places in Iceland to ride these sturdy native creatures.
Sustainability Story: Environmental Policy
Address: 816 Sveitarfélagið Ölfus, Iceland
Rooms: From $186 per night
Book With: Expedia | Tripadvisor | Official Hotel Site
North Iceland Hotels
Famed for dramatic landscapes, whale watching (Húsavík is known as the whale-watching capital of Europe), geothermal baths like Mývatn Nature Baths, and powerful waterfalls like Dettifoss, Northern Iceland is home to hotels built for exploring.
Sigló Hótel by Keahotels
The green exterior of the waterfront Sigló Hótel helps it to blend seamlessly into the peaceful surroundings of Siglufjörður, Iceland’s most northernmost town. Visitors can unwind in the sauna with views of the mountains and fjord or sit with a warm drink by the hotel fireplace. Rooms are classically furnished, boasting an old-world charm alongside modern amenities for a comfortable stay. Guests can also enjoy a complimentary round of golf at the unique Siglufjörður golf course.
Sustainability Story: Keahotels Sustainability Policy
Address: Snorragata 3, 580 Siglufjörður, Iceland
Rooms: From $254 per night
Book With: Expedia | Tripadvisor | Official Hotel Site
Hótel Laxá
Easily reached from Iceland’s famous Ring Road, Hótel Laxá is tucked away in the north of Iceland, near Lake Mývatn. Accommodations are comfortable and modern, and the onsite bar offers views of the lake as you sip a refreshment. Eldey restaurant specializes in Icelandic cuisine, with aplomb reserved for its vegetarian and vegan offerings. Hotel Laxá is certified by SWAN, a sustainability label introduced by the Nordic Council of Ministers, in recognition of its high environmental standards.
Address: Olnbogaás, 660 Mývatn, Iceland
Rooms: From $135 per night
Book With: Expedia | Tripadvisor | Official Hotel Site
Hótel Rauðaskriða
Hótel Rauðaskriða is a family-run affair, and guests are likely to bump into the resident cats, Grima and Krummi during their stay. The 37 rooms ensure an intimate and personalized trip, with large windows from which to enjoy the countryside views and a small onsite restaurant serving homemade breakfast and an a la carte menu.
Sustainability Story: Who We Are
Address: Raudaskrida, 641 Húsavík, Iceland
Rooms: From $165 per night
Book With: Tripadvisor | Official Hotel Site
Eleven Deplar Farm
Deplar Farm, one of Eleven’s most notable luxury lodges, is situated on the remote Troll Peninsula. A converted 15th-century sheep farm, this beautifully restored historic building features a traditional turf roof and black timber cladding, which helps the lodge to blend into its surroundings. The peninsula sees some of Iceland’s highest snowfall, making it one of the best snow sport and heli-ski spots in the country. Summer at Deplar Farm is just as sweet, with a wealth of guided adventure offerings like horseback riding and mountain biking. The award-winning property’s amenities include an outdoor ‘Viking’ sauna, a geothermal-heated outdoor pool, and a premium spa boasting Isopod floatation tanks. Chef-prepared meals, alcohol, gear, and guided excursions are included in all stays.
Sustainability Story: Commitment To Sustainable Travel
Address: 570 Fljót, Ólafsfjörður, Iceland
Rooms: From $3,924 per night
Book With: Official Hotel Site
South Iceland Hotels
In South Iceland, accommodations range from modest guesthouses to luxurious retreats strategically located near some of the region’s most iconic natural landmarks. Visitors can find lodgings near the geological marvel of Silfra Fissure, the majestic Seljalandsfoss and Skogafoss waterfalls, the stark beauty of Reynisfjara Black Sand Beach in Vik, and Jökulsárlón Glacier Lagoon.
Hotel Rangá
It’s the little things that make Hotel Rangá stand out. Rooms are adorned with beautiful artwork by local creatives and a Northern Lights wake-up call to ensure you never miss the best of the Aurora Borealis. Suites are themed on different nations around the world, and sustainability is at the heart of the hotel’s operations. Heated purely by renewable energy, the hotel also makes use of local suppliers where possible.
Sustainability Story: Going Green at Hotel Rangá
Address: Sudurlandsvegur, Hella, 00851, Iceland
Rooms: From $386 per night
Book With: Expedia | Tripadvisor | Official Hotel Site
Fosshotel Glacier Lagoon
Large windows in rooms at the Fosshotel Glacier Lagoon hotel offer panoramic views of mountains or ocean. Free use of the spa and gym is included for the duration of your stay at the hotel. And guests can dine under the stars at the onsite restaurant, which offers a delectable experimental fusion menu.
Sustainability Story: Íslandshótel Environmental Policy
Address: Hnappavellir, 785 Öræfi, Iceland
Rooms: From $230 per night
Book With: Expedia | Tripadvisor | Official Hotel Site
The Greenhouse Hotel
The Greenhouse Hotel is part of a complex made up of a food hall, designer stores, ice cream parlor, and more. With seven restaurants to choose from, it is possible for travelers to savor a range of local and international dishes. The hotel itself has a contemporary aesthetic, housed in a warehouse and retrofitted with greenery, flowers, wooden furnishings, and plenty of light.
Sustainability Story: The Greenhouse Sustainability
Address: Austurmörk 6, 810 Hveragerði, Iceland
Rooms: From $240 per night
Book With: Expedia | Tripadvisor | Official Hotel Site
Umi Hotel
Featuring just 28 cozy rooms, the intimate UMI Hotel on the country’s south coast offers captivating views of the Westman Islands. Its tastefully simple design complements one of the country’s most beautiful mountain ranges, and the rooms are outfitted with modern bathrooms and sustainably sourced toiletries. The seasonal restaurant uses only local ingredients to creatively combine Icelandic, Nordic, and Japanese cuisines.
Address: Leirnavegur road nr. 243, 861 Hvolsvöllur, Iceland
Rooms: From $352 per night
Book With: Expedia | Tripadvisor | Official Hotel Site
Magma Hotel
Magma Hotel is comprised of a series of individual cabins, featuring ensuite bathrooms, high-speed Wi-Fi, hardwood floors, and heating. Floor-to-ceiling windows allow guests to soak up the panoramic scenery of rural Kirkjubæjarklaustur, including a wildlife-rich lake, a glacial river, and the ancient Vatnajökull glacier. Shaped by a 1783 volcanic eruption, it’s one of Iceland’s most picturesque corners.
Address: 880 Kirkjubaejarklaustur, Iceland
Rooms: From $254 per night
Book With: Expedia | Tripadvisord | Official Hotel Site
West Iceland and East Iceland Hotels
East Iceland is less frequented by tourists compared to more popular areas like Reykjavik, the Golden Circle, and the South Coast. However, it’s gaining popularity among those looking for an experience away from the crowds and among the fjords.
In the West, hotels often boast views of the iconic Snæfellsjökull Glacier and are perfect for exploring historical sites, basalt cliffs, black sand beaches, and the glaciers and volcanoes of Snæfellsjökull National Park.
Hótel Búðir
Away from the lights of the big city, the wonderfully isolated Hótel Búðir is an excellent spot for capturing the Northern Lights. Tucked away on a silent beach along the Snæfellsnes Peninsula, this newly expanded hotel has also undergone significant renovation. The new-look restaurant stocks produce from West Iceland only, and rooms face the nearby glacier, mountains, or the sea. After a busy day of exploring, you can relax with a drink in the timeless bar, complete with rustic wood flooring.
Sustainability Story: Regional Sustainability
Address: Búðir, 356 Snæfellsbær, Iceland
Rooms: From $240 per night
Book With: Expedia | Tripadvisor | Official Hotel Site
Hótel Húsafell
With three Northern Lights sightings per week on average during the winter months, Hótel Húsafell is another excellent option for spotting the Aurora Borealis in Iceland. A seasonal menu ensures dishes at the onsite restaurant are always prepared using local ingredients, and rooms offer chic wood flooring, local artwork, and large windows from which to soak up views of the Icelandic Highlands. Recognized by National Geographic as a Unique Lodge of the World, Hótel Húsafell is committed to sustainability and authentic travel experiences.
Sustainability Story: Sustainable Practices at Húsafell
Address: Stórarjóður, 320, Iceland
Rooms: From $330 per night
Book With: Expedia | Tripadvisor | Official Hotel Site
Additional standout experiential stays include Hotel Flatey, in the old village on Flatey Island in the Westfjords (accessed by ferry) and the Fjallsárlón Aurora Huts, a glass-walled and -ceilinged hut-boat that floats directly on the waters of this eastern lagoon.
