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Iceland — 10 Hotels Reviewed

Best Hotels in
Reykjavik

Reykjavik is the world's most northerly capital and one of its most extraordinary — a compact city of coloured corrugated-iron houses, geothermal steam rising from the streets, the Hallgrímskirkja church spiking the skyline, and the Northern Lights sometimes visible from the harbour on a clear winter night. The hotel scene has transformed dramatically in the past decade, with world-class design and luxury properties now matching the city's singular natural setting.

Reykjavik, Iceland

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Top Hotels in Reykjavik — 2026

Reykjavik is the world's most northerly capital and one of its most extraordinary — a compact city of coloured corrugated-iron houses, geothermal steam rising from the streets, the Hallgrímskirkja church spiking the skyline, and the Northern Lights sometimes visible from the harbour on a clear winter night. The hotel scene has transformed dramatically in the past decade, with world-class design and luxury properties now matching the city's singular natural setting.

  1. 1
    The Retreat at Blue Lagoon Laugavegur · $$$$ · ★ 9.8
  2. 2
    Hotel Borg Laugavegur · $$$$ · ★ 9.3
  3. 3
    Canopy by Hilton Reykjavik Hlemmur · $$$ · ★ 9.2
  4. 4
    Ion Adventure Hotel Laugavegur · $$$$ · ★ 9.5
  5. 5
    Kex Hostel Old Harbour · $ · ★ 9

10 hotels reviewed · 35 in-depth guides · Last updated March 2026

Our top 10 picks

Ranked by overall score. Updated February 2026.

The Retreat at Blue Lagoon — Laugavegur
$$$$ Ultra-luxury
★ 9.8

One of the world's great hotel experiences, The Retreat is literally built into the lava field around the Blue Lagoon geothermal spa, with private lagoon access from many suites and an extraordinary volcanic landscape setting. The 62-room property delivers an otherworldly experience that is uniquely Icelandic — nowhere else on Earth can match it.

  • Luxury
  • Wellness
  • Romance
  • Views
  • Laugavegur
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Hotel Borg — Laugavegur
$$$$ Ultra-luxury
★ 9.3

Laugavegur

Hotel Borg

Reykjavik's most celebrated city hotel, Hotel Borg has anchored Austurvöllur square — directly opposite the Althing parliament — since 1930 with Art Deco elegance and genuine historic grandeur. The prime location, sophisticated rooms, and the enduring quality of Iceland's first luxury hotel make it the city's defining address.

  • Luxury
  • Classic
  • Historic
  • Romance
  • Laugavegur
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Canopy by Hilton Reykjavik — Hlemmur
$$$ Upscale
★ 9.2

Canopy Reykjavik is the most design-forward new hotel in the city, occupying a striking contemporary building in the Hlemmur food hall district with Nordic-minimal interiors, a rooftop hot tub with mountain views, and a genuine connection to the local neighbourhood rather than the tourist strip. Consistently one of the city's best hotel openings.

  • Design
  • Boutique
  • Views
  • Foodie
  • Hlemmur
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Ion Adventure Hotel — Laugavegur
$$$$ Ultra-luxury
★ 9.5

Jutting from a lava field beside Iceland's Golden Circle, Ion Adventure Hotel is the country's most architecturally extraordinary property — glass walls opening to tundra and geothermal hot springs, a Northern Lights bar that must be seen to be believed, and activities ranging from glacier hikes to dog sledding. An utterly unique experience 45 minutes from Reykjavik.

  • Luxury
  • Views
  • Wellness
  • Design
  • Laugavegur
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Kex Hostel — Old Harbour
$ Budget-friendly
★ 9

Old Harbour

Kex Hostel

Iceland's most beloved hostel, Kex occupies a former biscuit factory on the Old Harbour waterfront with an extraordinary industrial-chic interior, an excellent bar-restaurant serving some of Reykjavik's best burgers, and a social atmosphere that has made it a global design hostel benchmark. An exceptional value stay in one of the world's most expensive cities.

  • Value
  • Design
  • Nightlife
  • Old Harbour
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Apotek Hotel — Laugavegur
$$$ Upscale
★ 9.1

Laugavegur

Apotek Hotel

A magnificently restored early-20th-century pharmacy building on Austurstræti, Apotek is one of Reykjavik's most atmospheric boutique hotels — a place where the original apothecary shelving, marble counters, and tiled floors have been incorporated into an elegant contemporary design. The best-value luxury stay on the main boulevard.

  • Boutique
  • Historic
  • Design
  • Laugavegur
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Sandhotel — Laugavegur
$$$ Upscale
★ 9.3

Laugavegur

Sandhotel

Reykjavik's most sophisticated boutique hotel sits at the top of Laugavegur, the city's famous shopping street, with beautifully designed rooms incorporating Icelandic craft materials — sand, lava stone, and driftwood. The rooftop hot tub with Hallgrímskirkja views and the warm, personal service make it a consistent favourite.

  • Boutique
  • Design
  • Views
  • Romance
  • Laugavegur
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101 Hotel — Laugavegur
$$$ Upscale
★ 9.2

Laugavegur

101 Hotel

Named for Reykjavik's most fashionable postcode, 101 Hotel is the city's definitive style hotel — a minimalist black-and-white design statement on Hverfisgata with locally commissioned art, exceptional beds, and a bar-restaurant that serves as one of the city's social anchors. A perennially cool address.

  • Design
  • Boutique
  • Nightlife
  • Laugavegur
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Alda Hotel — Hlemmur
$$ Mid-range
★ 8.9

Hlemmur

Alda Hotel

A sleek, design-driven boutique hotel at the eastern end of Laugavegur near Hlemmur square, Alda delivers Nordic-minimal interiors, well-proportioned rooms, and excellent value at the quieter end of the main shopping street. One of the city's best boutique options for independent travellers who want design without the premium price.

  • Design
  • Boutique
  • Value
  • Hlemmur
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Fosshotel Reykjavik — Vesturbær
$$ Mid-range
★ 8.7

One of the tallest buildings in Iceland, Fosshotel Reykjavik is a reliable modern four-star hotel with exceptional panoramic views from its upper floors — on a clear day the views extend to the Snæfellsjökull glacier and across the entire Reykjanes Peninsula. A solid choice for travellers who want comfort, views, and easy parking.

  • Views
  • Value
  • Family
  • Vesturbær
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