Capella Lodge - Volcanic Peaks Meet Barefoot Luxury on Australia's Last Unspoiled Island

There are places that make you question why you ever settled for ordinary vacations, and Capella Lodge on Lord Howe Island is one of them. This nine-suite retreat sits at the foot of two volcanic peaks that tower over the world's southernmost coral reef, on an island so pristine that only 400 visitors are allowed at any one time. No traffic lights, no crowds, just you, the Pacific Ocean, and a landscape that looks like it was designed by someone with an overactive imagination and excellent taste.

The lodge itself channels the laid-back sophistication of an Australian beach house, if that beach house happened to have floor-to-ceiling windows framing views that would make a landscape photographer weep. Since opening in 2003 as the first property in what would become the Baillie Lodges collection, Capella has been quietly pioneering a style of luxury that prioritizes connection with place over pointless formality.

The Island That Time Preserved

Lord Howe Island rises from the Tasman Sea 780 kilometers northeast of Sydney, a crescent-shaped remnant of a shield volcano that erupted seven million years ago. At just 11 kilometers long and 2.8 kilometers at its widest point, it's small enough to cycle end to end in 25 minutes, though you'll probably stop frequently because the scenery demands it.

More than 70% of the island is permanent protected parkland, and it earned UNESCO World Heritage status in 1982 for good reason. The island harbors 241 indigenous plant species, 113 of which exist nowhere else on Earth. Fourteen species of seabirds breed here in their hundreds of thousands. The flightless Lord Howe Island woodhen, saved from extinction through conservation efforts, now scurries through the undergrowth with the confidence of something that knows it's precious.

A 1950s decision to cap visitor numbers at 400 has kept Lord Howe refreshingly free of the overdevelopment that plagues other island paradises. The resident population of about 360 people has embraced environmental stewardship as a way of life, not a marketing slogan.

A $15 million rodent eradication program completed in 2019 has triggered what biologist Ian Hutton calls an ecological renaissance, with more than 30 threatened species bouncing back with startling speed.

The Capella Story

James and Hayley Baillie founded Capella Lodge in 2003, drawn to an island that had been a childhood favorite for them both. Their vision was to create a property that felt less like a hotel and more like your own impossibly stylish holiday house, assuming you have impeccable taste and a prime piece of Pacific real estate.

The concepts they pioneered here, including "first name service" and "barefoot luxury," became foundational to the growing Baillie Lodges collection, which now includes properties from Kangaroo Island to the Canadian wilderness. Capella celebrated its 20th anniversary in 2024, with original managers Libby Grant and Mark McKillop having led the team for nearly the entire run before retiring in 2025.

A three-month closure in 2025 brought significant updates to the outdoor spaces, with Gowers Terrace receiving a complete refresh including new drink ledges, expansive blackbutt decking with elegant banquettes, and stylish outdoor furnishings that complement the property's beach house aesthetic.

Kentia Lounge

The Kentia Lounge offers a quieter alternative to the main gathering spaces, with generous seating and views that take in both the reef break and the mountains. An open fire provides warmth during cooler months, creating the kind of cozy atmosphere that encourages lingering over a book or a particularly good conversation. The lounge closes for the winter period each year from June through August.

Capella Bar

The Capella Bar serves what's billed as the island's best espresso coffee, along with a selection of cocktails and boutique wines carefully chosen to represent premium Australian labels, with particular emphasis on New South Wales regions.

The bar is included in your rate from 6pm onward, which takes the sting out of ordering that second cocktail. Sunset drinks and canapés are served here daily, providing a convivial opportunity to swap stories with other travelers and staff who genuinely seem to enjoy their jobs.

Capella Restaurant

The restaurant sits at the heart of the lodge, its bright, open design framing spectacular views of Mount Gower, Mount Lidgbird, and the lagoon beyond. Floor-to-ceiling glass and naturally weathered teak create a contemporary coastal aesthetic that never tries too hard. Hand-printed fabrics by designer Julie Paterson and lino-cut prints by artist Bruce Goold provide local character without veering into theme park territory.

The daily-changing menu celebrates what comes from the surrounding waters and the island's surprisingly productive soil. Fresh line-caught kingfish, tuna, and squid feature regularly, alongside island-grown greens and foraged coastal herbs.

The kitchen also works with mainland producers for boutique meats and specialty items, creating dishes that are sophisticated without being fussy. Vegetarian options lean on organic island vegetables and house-made pastas. The bread is baked daily, the ice cream churned in-house.

From your table, the view shifts throughout the day. Morning light illuminates the mountains' volcanic contours. By evening, the setting sun turns the lagoon into liquid gold. Three-course dinners are included in your rate, as are full gourmet breakfasts, which is either very generous or a clever way to ensure you never want to leave.

Gowers Terrace

This outdoor lounging area has become even more appealing following the 2025 refresh. The wet-edge plunge pool seems to spill into the Pacific, while new banquettes and furnishings by Tribu and Robert Plumb create multiple spots for relaxing with a view. A new Capella light installation pays tribute to the property's namesake constellation, adding a touch of celestial drama after dark.

The terrace is where you'll likely find yourself for sunset drinks, watching the light change on the mountains while contemplating whether a third cocktail is strictly necessary. The answer is usually yes.

Capella Suite

Two of these single-level suites offer 45 square meters of space with high ceilings and a definite beach house vibe. The flowing layout provides cameo views of the ocean and mountains, while floor-to-ceiling windows frame the waving kentia palms beyond. You'll find either king or twin bed configurations, a spacious ensuite bathroom with dual-head rain shower, a lounge area, and a private deck.

The basalt-dressed ensuite features natural skylighting and generous proportions that make it clear this isn't your average hotel bathroom. Timber floors, marine ply joinery, and custom furniture pieces create a sophisticated but relaxed atmosphere. Danish Primetime chairs and Artemide Tolomeo lamps add designer touches without feeling stuffy.

Lagoon Loft

This 65-square-meter mezzanine suite puts the king bedroom upstairs, with a spacious living area, ensuite, and dual-head shower below. The basalt-dressed ensuite includes an oversized rain shower, and custom Capella Spa amenities incorporate island botanicals and marine elements.

Both levels have private decks, with the outdoor space on the lower level featuring a daybed and hot tub that face the reef-fringed lagoon. Maximum capacity is two, making this ideal for couples seeking a bit more space and privacy.

Catalina Suite

Designed for families or friends traveling together, this 100-square-meter suite spans two levels. Upstairs, a light-filled master king bedroom captures mountain and ocean views. The upper ground floor offers flexible bedding with king and twin options. Two luxurious bathrooms provide privacy and convenience, both stocked with custom Capella Spa amenities using island botanicals.

A generous outdoor deck includes daybeds, occasional furniture, and a hot tub. A fireplace in the separate lounge area adds warmth during cooler months. The suite accommodates up to four people comfortably.

Makambo Loft

This 160-square-meter premium mezzanine suite delivers mesmerizing views of Mounts Gower and Lidgbird through its clever positioning. A striking red spiral staircase leads to an upper sleeping area, while the generous lounge downstairs features a fireplace.

The contemporary basalt-clad bathroom occupies the lower level, and outdoor amenities include a heated plunge pool, rain shower, and a cabana-style daybed that captures the suite's relaxed sophistication. While configured for two in existing bedding, it can accommodate up to four with the daybeds.

Lidgbird Pavilion

At 125 square meters, this is Capella's showstopper. Wrap-around verandahs capture panoramic views from every angle, while extensive decks offer multiple outdoor spaces including a plunge pool and a freestanding bathtub positioned beneath a frangipani tree for outdoor bathing that redefines indulgent.

Upstairs, the master king bedroom suite opens to more wrap-around verandahs. The living area features a fireplace, Bang & Olufsen television and sound system, and the option of an additional daybed. The basalt-clad bathroom includes dual stone slab vanities, rain shower, and extensive timber benches.

Private sunset drinks and canapés can be delivered to your deck, and the Capella electric buggy is reserved for your exclusive use. It's the kind of accommodation that makes leaving the suite feel like a mistake, except the island beyond is too good to miss.

Trekking the Mount Gower Cloud Forest

The guided climb to Mount Gower's 875-meter summit ranks among Australia's best adventure hikes, though "best" might be generous when you're hauling yourself up with ropes on steep sections with dramatic drop-offs. The reward is access to one of the world's rarest ecosystems: the Gnarled Mossy Cloud Forest, a critically endangered ecological community that exists above 750 meters where warm ocean winds hit the mountain and create perpetual cloud cover.

Giant mosses carpet the summit, some the largest species in the world. Tree orchids cluster in the humid air. Twisted trees wear veils of lichens. About 85% of the plants here exist nowhere else on Earth, having evolved over millions of years specifically for these conditions. Living on those plants are beetles and snails equally specialized and equally rare.

Providence petrels circle overhead, their calls echoing through the mist. Lord Howe Island woodhens, flightless and fearless, scurry through the ground cover. The critically endangered little mountain palm, found only in this cloud forest's four-square-kilometer range, is experiencing a renaissance since the island's rodent eradication program. Where rats once devoured every palm seed, seedlings now carpet the forest floor in numbers that longtime guides call unbelievable.

Local guide Jack Shick has scaled Mount Gower roughly 2,400 times, following in the footsteps of his father and grandfather who were also mountain guides. He'll stop regularly to point out the changes, marveling at the ecological recovery happening in real time. The trek takes most of a day and requires reasonable fitness, but the secret fairytale world at the top makes the effort worthwhile.

Ned's Beach

This sandy stretch on the island's northern end has achieved minor fame for its fish feeding opportunities. Wade into the shallows with some fish food and you'll be mobbed by mullet, wrasse, garfish, silver drummer, spangled emperor, and kingfish in a frenzy that's both slightly alarming and utterly delightful. The fish are shameless and persistent, having learned that humans equal food.

The beach's appeal extends beyond the feeding spectacle. The sand is genuinely white, the water genuinely clear, and the setting genuinely peaceful. It's the kind of beach where doing nothing feels like a reasonable plan. Capella provides backpacks and beach towels for excursions, and the lodge staff can arrange gourmet picnic packs if you want to make a day of it.

Snorkeling the Reef

Lord Howe is home to the world's most southerly coral reef, warmed by currents flowing from the Coral Sea. The island's waters are blessedly free of dangerous sharks, crocodiles, and other marine hazards that make snorkeling elsewhere a calculated risk. With coral reefs close to shore, you can grab a mask and fins (Capella provides complimentary snorkeling equipment) and swim straight from the beach into kaleidoscopic underwater gardens.

The reef's unique position means it's influenced by tropical, subtropical, and temperate ocean currents, creating an unusual mix of species. Double-header wrasse swim alongside a local variety of clownfish. More than 500 species of fish inhabit these waters, along with green sea turtles and hawksbill turtles that cruise past with admirable nonchalance.