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Best Hotels in Iceland (2026)

Places to stay, from budget guesthouses and boutique hotels to large international properties, grouped by area and style.

8 places · Updated October 27, 2026

Our top 3 hotels in Iceland

  1. The Reykjavik EDITION Luxury harbourfront hotel, Old Harbour / AusturbakkiFive-star harbourfront hotel beside Harpa with 253 rooms and suites, the TIDES seafood restaurant, a rooftop bar and a social spa looking out over the bay.
  2. Hotel Borg Historic Art Deco hotel, Austurvöllur / MiðborgHistoric Art Deco hotel on Austurvöllur square, opened in 1930 as Iceland's first luxury hotel, with 99 rooms, a Tower Suite and the Borg Spa.
  3. Hotel Holt Classic art-filled boutique hotel, ÞingholtClassic four-star hotel in the quiet Þingholt district, established in 1965 and home to what it describes as Iceland's largest private art collection.

Hotel

2. Hotel Borg

Historic Art Deco hotel$$$$Austurvöllur / Miðborg

Historic Art Deco hotel on Austurvöllur square, opened in 1930 as Iceland's first luxury hotel, with 99 rooms, a Tower Suite and the Borg Spa.

View details — Hotel Borg

Hotel

3. Hotel Holt

Classic art-filled boutique hotel$$$Þingholt

Classic four-star hotel in the quiet Þingholt district, established in 1965 and home to what it describes as Iceland's largest private art collection.

View details — Hotel Holt

Hotel

4. Sand Hotel

Boutique hotel on Laugavegur$$$Laugavegur

Boutique hotel with 78 rooms on Laugavegur, Reykjavik's main shopping street, with contemporary artwork, a gym and a complimentary breakfast buffet of fresh bread and pastries.

View details — Sand Hotel

Hotel

7. KEX Hostel

Social hostel and hotel$Skúlagata / Miðborg

Social hostel and hotel in a former biscuit factory on Skúlagata, with dorms and private rooms, breakfast at BAXTUR and a bar serving local beers.

View details — KEX Hostel

Hotel

8. Loft HI Hostel

Eco-labelled hostel with rooftop terrace$Bankastræti / Miðborg

Central Hostelling International hostel on Bankastræti with dorms, private and family rooms, a guest kitchen, a bar and café and a rooftop terrace over the old town.

View details — Loft HI Hostel