Iceland's hotels tend to take their cues from what the land was doing before anyone thought to build on it. A geothermal plant's runoff became a spa. An abandoned workers' barracks became a design landmark. A fifteenth-century sheep farm became a heli-skiing base. A high-rise built in the middle of a financial collapse became the city's best view. What follows are ten unusual properties that lean into that instinct rather than smoothing it over, each one shaped by the specific patch of Iceland it sits on.
1. Tower Suites Reykjavík
Tower Suites occupies the 20th floor of Höfðatorg, a 74-meter (243-foot), 19-story tower that's the third-tallest building in Iceland. It was built through 2008 and 2009, the exact years Iceland's economy collapsed, and for a while the half-finished tower stood as a fairly literal symbol of the crash. It's since become the opposite: a private, eight-suite hotel with 360-degree views over the city, the bay, and the mountains beyond. A short walk away is Höfði, the house where Reagan and Gorbachev held their 1986 summit on nuclear disarmament.
Location
Katrínartún 2, 105 Reykjavík - on the 20th floor of the Höfðatorg tower near the waterfront.
Main characteristics
An all‑suite boutique hotel with only eight penthouse suites; floor‑to‑ceiling windows on all sides; designer furniture and Icelandic art; premium in‑room amenities (Nespresso, wine cooler, Apple TV, Sóley Organics toiletries).
What makes it unique
It's one of the very few true high‑rise, 360° panoramic stays in Reykjavík - essentially a private penthouse experience above a low‑slung city, with sweeping views of skyline, bay, and mountains that change with weather and light.
2. The Reykjavik EDITION
The EDITION brand was dreamed up by Ian Schrager, who co-founded Studio 54 in the 1970s before more or less inventing the modern boutique hotel in the 1980s, this time in partnership with Marriott. He'd first been drawn to Iceland by, of all things, Bobby Fischer's 1972 World Chess Championship win in Reykjavík, and came back decades later to open the country's first true luxury-lifestyle hotel in November 2021. It sits directly beside Harpa, the concert hall with the multicolored glass facade designed by artist Ólafur Eliasson.
Location
Austurbakki 2, 101 Reykjavík - harbourfront, opposite Harpa Concert Hall and steps from the Old Harbour.
Main characteristics
253 rooms and 27 suites plus a standout penthouse; Nordic‑modern interiors (ash/oak, copper, local art); large floor‑to‑ceiling windows; full‑service spa (hammam, sauna, hydrotherapy), 24‑hour gym, multiple bars, and the signature Tides restaurant.
What makes it unique
A big‑brand luxury hotel that feels distinctly Icelandic - polished international service paired with local materials, crafts, and a harbour‑front setting that few upscale hotels in the city can match.
3. Hotel Viking
Hotel Viking sits inside Fjörukráin, the Viking Village, where the restaurant's dining hall was built in the style of an old Norwegian church, dragon heads carved into the roofline. Staff dressed as Vikings and Valkyries have been known to "storm" tour buses as they arrive, handing out honorary Viking certificates once the mock kidnapping is over. Hafnarfjörður builds on that theme every year with its own Viking Festival, complete with battle re-enactments and a market.
Location
Víkingastræti 1–4, 220 Hafnarfjörður (just outside Reykjavík).
Main characteristics
42 rooms across two themed floors - Viking style on the first floor, West Nordic on the second; fine arts and crafts from Iceland, Greenland, and the Faroe Islands; geothermal hot tub on site.
What makes it unique
A thematic, culture‑forward property where the restaurant is built like a Viking longhall and the décor leans into Norse heritage - different from typical city hotels by doubling as a small museum‑like experience of North Atlantic traditions.
4. Hótel Jökulsárlón – Glacier Lagoon Hotel
Opened in 2024, this is the newest hotel on the list, and it was built specifically to sit near Jökulsárlón, the glacial lagoon where icebergs calve off Vatnajökull and drift out toward Diamond Beach. Architecture firm bj.snæ Arkitektar gave it an angular roofline that echoes the mountains around it, and built most of the structure from cross-laminated timber to keep its environmental footprint down, a deliberate contrast to the ice and volcanic rock it looks out on.
Location
Efribær, Suðursveit, 781 Reynivellir (Southeast Iceland), a short drive from Jökulsárlón lagoon and Vatnajökull National Park.
Main characteristics
Opened in 2024; modern Nordic design with cross‑laminated timber construction; large rooms with floor‑to‑ceiling windows; glacier‑ or mountain‑facing views; on‑site restaurant/bar; geothermal wellness area (outdoor sauna, infrared sauna, multiple hot tubs).
What makes it unique
Purpose‑built as the contemporary "glacier basecamp" on the South‑East route - new, design‑led, and oriented to the ice cap and lagoon experience, with wellness facilities positioned to frame the glacial landscape.
5. Hotel Rangá
Photo by Ása Steinarsdóttir
Hotel Rangá started calling guests when the northern lights appeared back in 2005, one of the first hotels in Iceland to offer that kind of wake-up service, and in 2014 it went a step further, building a dedicated observatory with astronomer Sævar Helgi Bragason. It remains Iceland's only public observatory offering guided tours of the night sky, fitted with two professional telescopes under a roll-off roof. At reception, a ten-foot stuffed polar bear named Hrammur ("paw" in Icelandic) greets arrivals, and the hotel holds a MICHELIN Key.
Photo by Thomas Heeringa
Location
South Coast of Iceland (about an hour from Reykjavík), in a low‑light‑pollution setting ideal for aurora viewing.
Main characteristics
Boutique hotel with 51–52 rooms and themed suites (continent‑inspired Master/Junior Suites); geothermal outdoor hot tubs; on‑site restaurant; extensive collection of Icelandic art and saga‑inspired murals.
What makes it unique
It pairs luxury with serious stargazing - featuring Iceland's best hotel observatory and resident astronomers, plus Northern Lights wake‑up calls, making it one of the country's top aurora‑focused stays.
6. ION Adventure Hotel
Before it was a hotel, this building housed workers at the neighboring Nesjavellir geothermal plant, and after they moved out it sat abandoned. Sigurlaug Sverrisdóttir, a former flight attendant, bought it in 2011 and spent two years working with California-based studio Minarc to turn it into a brutalist landmark, a new wing cantilevered out over the lava field on concrete pillars. It opened in 2013, and the sulfur smell from the plant next door, guests report, fades within a few minutes.
Location
Nesjavellir, near Þingvellir National Park and Mount Hengill (Golden Circle area), roughly 45–60 minutes from Reykjavík.
Main characteristics
45 rooms in a dramatic cantilevered building; concrete‑and‑driftwood interiors using reclaimed/local materials; geothermal heating/hot water; 10‑metre outdoor geothermal pool and Lava Spa; adventure‑oriented programming.
What makes it unique
Architecturally iconic and sustainability‑driven - converted from a derelict geothermal plant workers' building into a brutalist design landmark that sits in an otherworldly lava field, making it as much a design destination as an adventure base.
7. Panorama Glass Lodge
Panorama Glass Lodge exists because Sabrina Dedler, originally from Switzerland, had a dream about a glass house and convinced her husband Andreas to move with her to Iceland to build one. They opened their first lodges in 2017, the first accommodation in the country to put a glass ceiling over the bed. The four cabins at the Hella site are each named after a Norse god or mythical figure – Freya, Alva, Odin, and Thor.
Location
Two sites - South Iceland (Austurkrókur 1, 851 Hella) and West Iceland (Hafnarland Lísuborgir, 301 Akranes).
Main characteristics
Standalone glass "igloo" cabins with a glass roof over the bed; private hot tubs (and some lodges with private saunas); kitchenettes; designed for Northern Lights/midnight‑sun viewing with minimal light pollution.
What makes it unique
It was the first accommodation in Iceland (2017) to offer sleeping under a glass ceiling - so the core experience is unobstructed sky‑gazing from bed, which few other lodges provide in this form.
8. Eleven Experience Deplar Farm
This was a working sheep farm for roughly 600 years before Eleven Experience converted it into an adventure lodge, reopening it in April 2016. It made Condé Nast's "Best Hotels in the World" Gold List in 2023, and its 13 rooms come with a 1,500-square-meter (5,000-square-foot) spa, two on-site helipads for its heli-skiing program, and a lofted music stage. Guests can also fly out by helicopter to Ghost Farm, a traditional Icelandic mountain home, or the Lake House on Lake Stífluvatn, for lunch.
Location
Fljót valley, Troll Peninsula, northern Iceland (Ólafsfjörður area).
Main characteristics
All‑inclusive luxury adventure lodge in a converted 19th‑century sheep farm; 13 en‑suite rooms; 5,000‑sq‑ft spa (flotation tanks, sound bath), geothermal indoor/outdoor pool with swim‑up bar; guided heli‑skiing in winter and summer activities like kayaking, hiking, and whale watching.
What makes it unique
A remote, high‑end "private adventure" model - helicopter‑access activities, a world‑class spa in the middle of nowhere, and a single‑kitchen, all‑inclusive program that feels more like an exclusive expedition camp than a standard hotel.
9. Silica Hotel at Blue Lagoon Iceland
Silica's origin story starts with an accident. When the Svartsengi geothermal plant began operating in 1976, its runoff formed a pool that was supposed to drain back into the lava, but silica in the water blocked that drainage instead. Locals started bathing in it in the early 1980s and noticed it seemed to ease psoriasis. That observation eventually led to formal medical treatment on-site and, later, a hotel: opened as Clinic Hotel, renamed Silica in 2016, and named Travel + Leisure's Best Resort Hotel in Iceland for 2023.
Location
Grindavík, Reykjanes Peninsula - within the Blue Lagoon geothermal area, surrounded by 800‑year‑old lava fields.
Main characteristics
35‑room boutique hotel; minimalist rooms with private verandas overlooking lava fields; exclusive guest‑only Silica Lagoon (mineral‑rich geothermal bathing); premium access to the main Blue Lagoon; strong wellness focus.
What makes it unique
It originated as a clinic hotel for psoriasis treatments using geothermal seawater and retains that wellness DNA - plus the rare perk of a private lagoon reserved for hotel guests, separating it from the crowded main lagoon experience.
10. Fjalladýrð Guesthouse
Möðrudalur, where Fjalladýrð sits, is the highest inhabited farm in Iceland at 469 meters (1,539 feet) above sea level, and it's been settled since early in the country's history. Its tiny church was built in 1949 by farmer Jón A. Stefánsson as a memorial to his wife, and he painted the altarpiece himself. His son, Stefán "Stórval" Jónsson, went on to become a well-known self-taught painter, famous for his depictions of nearby Mount Herðubreið, known locally as the Queen of Icelandic Mountains.
Location
Möðrudalur (Möðrudalsvegur/road 901), East Iceland - midway between Mývatn and Egilsstaðir, near the Ring Road.
Main characteristics
Guesthouse/campsite/café on an active farm; modest rooms plus traditional turf‑style "baðstofa" sleeping houses; capacity for ~27 indoors with more in summer camping; base for nearby highland sights (Askja, Dettifoss, Ásbyrgi).
What makes it unique
It sits on Möðrudalur, Iceland's highest inhabited farm (~469 m / 1,539 ft), offering a rare highland farmhouse experience and access to remote interior landscapes - very different from typical ring‑road hotels.
