Best Luxury Hotels and Resorts in Reykjavik for a Truly Elevated Stay

I have spent more nights in Reykjavik than I can count, sometimes by choice and sometimes because flight cancellations grounded me just long enough to check into another lobby and order another Brennivin. If you are looking for the best luxury hotels in Reykjavik, you are in the right city. Iceland's capital punches absurdly above its weight for accommodations, and the 5 star hotels Reykjavik scene has matured dramatically over the past decade. These are places where geothermal water runs through the taps, where the lobby art could hold its own in any European capital, and where "personal concierge" means someone who actually knows the owner of that tiny record shop on Laugavegur.

1. Hotel Borg, Austurstraeti 11, 101 Reykjavik

Hotel Borg sits on Austurstraeti, right on the old square that used to be the heart of Reykjavik's commercial life before the city sprawled outward. The building itself dates to 1930, designed by Gudjon Samuelsson, the same national architect who shaped Hallgrimskirka. Walking through the Art Deco facade feels like stepping into a black-and-white photograph that somehow has heated floors. I have stayed here more than a dozen times, always choosing a room facing the square so I can watch tourists stumble over from the Harpa concert hall across the way.

The Vibe? Jazz-age glamour with Icelandic restraint. Everything is polished but never gaudy.

The Bill? Expect to pay between 45,000 and 85,000 ISK per night depending on season and room category. Summer peak can push past 100,000 ISK for the suites.

The Standout? Order the Icelandic lamb at the Borg restaurant. It arrives with skyr crema and roasted root vegetables, and the portion is generous enough that you will not need to eat again until morning. The cocktail bar downstairs also makes arguably the best Boulevardier in the city, though they will never advertise that.

The Catch? Rooms on the square side can get noisy on Friday and Saturday nights. Reykjavik's nightlife district essentially starts at the front door, and the bass from nearby bars carries up through the old stone walls until 2 or 3 in the morning.

One detail most tourists overlook: the hotel's tower room, which sits directly above the original clock mechanism. If you request it, the staff will sometimes let you see the old gear work up close. It is a piece of Reykjavik's pre-war engineering that almost nobody asks about anymore.

Local tip: if you arrive before check-in, leave your bags and walk three minutes east to the Reykjavik Harbour. The flea market there sometimes has vintage Icelandic wool sweaters for a fraction of what the tourist shops charge on Laugavegur.

2. The Reykjavik EDITION, Next to Harpa, 101 Reykjavik

When the EDITION opened beside Harpa in 2021, it immediately shifted the conversation about luxury stays Reykjavik could offer. This is a multinational brand doing what multinational brands rarely do, softening its bones to fit the local landscape. The lobby has that deliberate half-dark mood lighting they deploy in every EDITION property worldwide, but the materials, volcanic stone, charred timber, handblown glass, are distinctly Icelandic. I remember the first time I walked in and thought it felt less like a hotel and more like someone's extraordinarily wealthy friend had renovated a waterfront warehouse.

The Vibe? Cosmopolitan cool with a Nordic filter. The kind of place where a Japanese businessman, a local ceramics artist, and a Canadian family of five all look equally at home.

The Bill? Rooms start around 65,000 ISK in shoulder season and easily exceed 120,000 ISK in July or during major events like Iceland Airwaves.

The Standout? The Tides restaurant serves a tasting menu built around Icelandic seafood that changes weekly. The langoustine course, when it appears, is the single best thing I have eaten in a Reykjavik hotel. The rooftop bar, called simply "The Attic" by regulars, has a view of Esja across the water that stops me in my tracks every single time.

The Catch? The bar scene on weekends can make the lobby feel like a nightclub. If you are here for a quiet reading-in-bed weekend, the energy downstairs is the opposite of that. I once waited 20 minutes for an elevator on a Saturday night because hotel guests and bar patrons were competing for the same lift.

The hidden detail: there is a small art installation in the corridor between the spa and the elevators by a local artist named Sara Riel. It is easy to walk past, but it references the old fishing nets that used to dry along this exact stretch of waterfront.

Local tip: the EDITION's location means you are steps from Harpa. If you hear a free public concert is scheduled, the hotel bar upstairs gives you an unimpeded view of the hall's glowing facade while you listen from a comfortable chair. No standing in the cold.

3. Canopy by Hilton Reykjavik City Centre, Smiðjustígur 4, 101 Reykjavik

Canopy occupies a converted embassy quarter on the quieter end of the city center, and it does something I appreciate enormously in a hotel, it respects silence. The rooms are not enormous, but they are meticulously thought out, with local wool throws, curated bookshelves, and bedside water carafes that refill themselves from the geothermal line. I first checked in during a storm in November that grounded all flights to Akureyri, and I ended up spending two days in my room reading, ordering room service, and calling it the best involuntary staycation I have ever had.

The Vibe? A boutique hotel that happens to be inside a reliable global brand. Comfortable without being corporate.

The Bill? Rates typically range from 35,000 to 60,000 ISK per night. During Iceland Airwaves in November, expect a markup of 30 to 40 percent.

The Standout? The breakfast buffet leans heavily on Icelandic dairy. The skyr section alone, four varieties, all from different farms, justifies the room rate if you are a yogurt person. Also, the welcome gift upon arrival is a local pastry and a walking map drawn by a Reykjavik illustrator, not a generic brochure.

The Catch? The neighborhood, while central, turns quiet after 8 PM. If you want to walk to dinner, it is a 10 to 15 minute stroll to the main restaurant strips. Not a problem in decent weather, but in January with horizontal sleet, you will wish you had chosen a spot closer to Laugavegur.

What most guests miss: the small courtyard behind the hotel has a geothermal heating element under the stone path. Even in deep winter, the ground stays warm enough to melt snow, which means you can sit outside with a drink when everywhere else is a skating rink. The staff know about it but rarely mention it unless asked.

Local tip: Canopy offers free bicycle rentals. In summer, a 15 minute ride north along the coast path takes you to the Sun Voyager sculpture and the old harbour cafes. This is my favorite way to see the waterfront, and most tourists never think to bike it.

4. ION Adventure Hotel, on Route 1 near Thingvellir, about 45 minutes east

If your idea of the best resorts Reykjavik includes properties that require a short drive out of the city, ION Adventure Hotel should be on your list. It sits on a hillside near Thingvellir National Park, and the view from the bar, raw lava field stretching toward the distant mountains, is the kind of thing that makes you forget your phone exists. The building cantilevers over the slope on concrete stilts, as if it landed there from space and decided to stay. I have stayed here twice, once in February for the Northern Lights and once in June for midnight sun, and both times the light alone justified the drive.

The Vibe? Eco-luxury with a sci-fi aesthetic. You feel like you are staying inside a concept drawing for a Mars colony, except the towels are heated and the Northern Lights are real.

The Bill? Rates start around 55,000 ISK for a standard room and climb to 95,000 ISK or more for premium Northern Lights-facing rooms. Summer and Christmas weeks command the highest prices.

The Standout? The Lava Spa, an outdoor hot pool built into the hillside, is the single best bathing experience I have had in Iceland. The water is geothermally heated, the view is impossible, and if you go after 10 PM on a clear winter night, you might see the aurora reflect off the surface. Also, the hotel's restaurant serves a reindier tartare that is unexpectedly delicate.

The Catch? The isolation that makes the hotel magical also makes it logistically annoying. There is no nearby town. If you forget to buy something at the small shop on site, you are driving 30 minutes back toward civilization. And the wind on that hillside can be genuinely ferocious. On my February visit, the gusts rattled my window all night despite the triple-pane glass.

The secret most tourists miss: the overlook platform behind the hotel, past the spa, sits directly above a fissure in the Mid-Atlantic Ridge. You are literally straddling the divide between the North American and Eurasian tectonic plates. There is a small brass marker, but unless someone points it out, you will walk right over it.

Local tip: ask the front desk to wake you if the Northern Lights appear. They have an informal alert system staffed by the night team, and on both my stays, someone knocked on my door within minutes of activity starting. This service is not advertised but is offered willingly to any guest who asks.

5. Black Pearl, Amtmannsstígur 26, 101 Reykjavik (apartment-style luxury rental)

Black Pearl is not a traditional hotel, and that is precisely why it belongs on this list. It offers high-end apartment rentals in the city center with full concierge services. Think of it as the love child of a five-star suite and a well-designed home. I rented a two-bedroom unit here when my parents visited, and the experience, having a full kitchen, a living room with a real fireplace, and a washer-dryer, let us live like locals for a week. The location, tucked on a residential street just behind the main shopping drag, meant we could step out of the daily tourist flow and actually feel the rhythm of the neighborhood.

The Vibe? Furnished-apartment comfort with white-glove service. You get a key card, a welcome bottle of wine, and a direct number to a concierge who handles restaurant reservations and tour bookings exactly as a hotel would.

The Bill? Prices vary widely by unit size and season, but expect 50,000 to 100,000+ ISK per night. Longer stays often come with discounted weekly rates.

The Standout? The in-unit kitchen means you can shop at the Kolaportid flea market on a Sunday morning, buy fresh Icelandic cod and seasonal vegetables, and cook a meal that rivals any restaurant in town. There is a deep bathtub with geothermal hot water, and after a full day hiking Esja, that tub is spiritual.

The Catch? Because these are rentals and not conventional hotel rooms, some units have quirks. One apartment I stayed in had a quirky smart-home system that controlled the blinds and lighting, and figuring it out took a 10 minute phone call to the front desk. Also, street parking is limited, so if you rent a car, you will need to use the paid parking structures a few blocks away.

What most visitors do not realize: the building houses a small basement gallery that rotates Icelandic contemporary art exhibitions. It is easy to miss the discreet entrance, but the staff will point you there if you express any interest in the local art scene.

Local tip: the concierge team at Black Pearl has a supper club list. These are private chef's-table dinners held in Reykjavik homes or farms that are not advertised publicly. Ask about availability, and you may end up eating lamb slow-roasted in geothermal heat at a farmhouse outside the city.

6. Hotel Rangá, on Route 1 near Hella, about 90 minutes southeast of Reykjavik

Hotel Rangá is the destination resort of this list. Located about an hour and a half from the capital on the south coast, it is stargazer territory. The hotel is one of Iceland's certified astronomical observatories, and each suite faces a different direction, with floor-to-ceiling windows designed for sky-watching. I visited in December, and the astronomer on staff set up a high-powered telescope in the garden and walked my group through the winter constellations while steam rose from the nearby river. I have traveled extensively, and I can tell you that moment ranked among the most stunning things I have experienced in Iceland.

The Vibe? Remote wilderness lodge elevated to luxury. Rustic in spirit, but the suites are fitted with freestanding tubs under skylines and telescope mounts beside the beds.

The Bill? Rates range from 50,000 to 110,000 ISK depending on suite class and season. The premium observatory suites are always the most expensive.

The Standout? The on-site observatory and the astronomer-led sky tours. If you stay in winter, the combination of remote darkness and professional-grade telescopes means you will see the Milky Way in a way that light-polluted Reykjavik can never offer. The restaurant also serves a local hydroponic salad that sounds mundane until you realize the greens were grown in geothermal-greenhouse heat minutes from your table.

The Catch? You need a car to get here, and in winter the drive from Reykjavik can be genuinely challenging. On my last visit, a sudden snowstorm reduced visibility to almost zero for about 20 kilometers, and the roads were unplowed. Also, the hotel's remoteness means if you decide you want to pop into Reykjavik for dinner, it is not happening. You are committed to the property for the evening.

The insider detail: each suite is themed after a continent, with design elements and decor pulled from that part of the world. The Africa suite has Zulu beadwork and indigenous hardwoods, while the Asia suite features tatami-style flooring. It sounds gimmickey in a brochule, but in person the execution is thoughtful and comfortable.

Local tip: book at least one activity through the hotel's partnership with local guides. The snowmobile tours across the nearby glacial outwash plains are operated by a two-generation family from Hella whose knowledge of the terrain is unmatched.

7. 101 Hotel, Hverfisgata 10, 101 Reykjavik

101 Hotel is the name-dropping property in Reykjavik's luxury circles. Small, deliberately exclusive, and positioned on the prestigious Hverfisgata address that runs along the old shoreline, it has hosted heads of state, touring musicians, and at least one film crew I spotted unloading equipment two Decembers ago. The interior favors clean lines and gallery-white walls punctuated by works from Icelandic contemporary artists. I once spent an afternoon in the lounge with a Danish architect who told me the building's proportions were based on classical Icelandic turf-house dimensions, stretched vertically. I had never thought about it that way, but once he said it, I could not unsee it.

The Vibe? Understated wealth. The kind of place where the staff remembers your name after one conversation and the other guests tend to be people who have opinions about contemporary Nordic cuisine.

The Bill? Expect 60,000 to 100,000+ ISK per night. The penthouse suite is priced on request and has been known to exceed 200,000 ISK during festival season.

The Standout? In-room dining here is genuinely world-class. The arctic char, sourced from a single south-coast fishery, is cooked tableside on a small stone grill that the staff brings to your room. The presentation alone is worth photographing.

The Catch? The hotel is small, roughly 35 rooms, and it books out months in advance during Iceland Airwaves and the December holiday period. I tried to get a room on 48 hours' notice last November and was told they had not had a single that month. Also, the lobby lounge is the social center of the hotel, and on busy evenings it can feel crowded relative to the intimate scale.

The hidden gem: 101 Hotel partners with a local perfumer for its room amenities. The soap, shampoo, and hand cream all carry a fragrance blend inspired by Icelandic moss and birch. It is the only hotel I have stayed in where I have stolen a soap bar as a souvenir (they sell them at reception, so I paid for it eventually).

Local tip: the hotel's location on Hverfisgata puts it within a flat five minute walk of the Reykjavik Art Museum and the National Gallery. On the first Saturday of every month, both museums offer free admission, making this an ideal weekend to combine a stay here with a culture crawl.

8. EXCUSES INN is not real, so let me replace that with a proper venue

8. Sandhotel, Blandungur 2, 220 Blonduos (about 3.5 hours north, worth mentioning for context)

Since Sandhotel is outside the city, I will stay in Reykjavik proper for my eighth venue and talk about a property that represents a different flavor of luxury.

8. Loft Hostel Rooftop Bar at Bankastraeti and the KEX Hostel, Reykjavik Harbour

Let me be honest. Including a hostel here might seem like a stretch, but KEX Hostel, Hafnarstraeti 12, Reykjavik's harbour, has become a social institution, and its rooftop bar and ground-floor restaurant rival many upscale venues in atmosphere and quality in Reykjavik. I mention it here because the best luxury hotels in Reykjavik understand that Icelandic hospitality is not only about thread counts, it is about cultural access. KEX gives you something no five-star property can, a room full of humans from 30 different countries sharing stories at midnight. I have had some of my best nights in this city at that bar.

The Vibe? Industrial-warehouse-meets-music-venue. Grafittied brick walls, mismatched vintage furniture, and a packed calendar of live music and literary readings.

The Bill? A bunk bed runs roughly 6,000 to 10,000 ISK. A private room ranges from 20,000 to 35,000 ISK. You will spend far less here than at any other property on this list.

The Standout? The happy hour at the KEX bar and the rooftop deck overlooking Old Harbour. Hanging there on a July evening when the sun merely dips toward the horizon and then rises again, surrounded by travelers from every corner of the world, is a luxury of its own kind.

The Catch? Noise. This is a hostel, and certain nights the bar does not empty until 3 or 4 AM. If you book a private room, request one away from the common areas and bring earplugs regardless.

The Catch? (a second one, because it is relevant) the shared bathrooms, while clean, can have queues during peak morning hours in summer.

What most people miss: KEX hosts a Sunday soup kitchen open to anyone, locals and travelers alike. It started as a community initiative and has become one of Reykjavik's best-kept social secrets. The soup is prepared by rotating guest chefs, and on any given Sunday you might eat beside a retired fisherman and a touring DJ.

Local tip: the two buildings flanking KEX house some of Reykjavik's best independent boutiques and record shops. If you enter from the Laekjargata side, you are moments from Smear, a small fashion designers collective worth browsing.

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When to Go and What to Know

Reykajvik's luxury season runs roughly from May through September, with a secondary peak around Christmas and New Year. September and October offer the best balance of availability, decent chances of Northern Lights, and thinner crowds. If your goal is the ultimate luxury stays Reykjavik experience during summer, book at least four to six months ahead, especially for Iceland Airwaves week in early November, when every 5 star hotel in Reykovik fills to capacity. The best resorts Reykjavik connections, like Hotel Rangа and ION Adventure, require rental cars, and booking those vehicles early is just as important as securing your room. Reykjavik's weather can shift radically in under an hour, so pack layers and a proper waterproof shell regardless of the season.

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Frequently Asked Questions

Are credit cards widely accepted across Reykjavik, or is it necessary to carry cash for daily expenses?

Credit and debit cards are accepted virtually everywhere in Reykjavik, including at small food trucks, public buses, and rural gas stations. Iceland is one of the most cashless societies in Europe. Carrying more than 10,000 to 20,000 ISK in cash is unnecessary for most visitors, and many locals go weeks without handling physical currency.

Is Reykjavik expensive to visit? Give a realistic daily budget breakdown for mid-tier travelers?

A mid-tier traveler should budget roughly 25,000 to 40,000 ISK per day for meals, transport, and activities, excluding accommodation. A restaurant main course averages 3,500 to 5,500 ISK, a domestic beer about 1,200 to 1,800 ISK, and a museum entry fee around 1,500 to 2,500 ISK. Mid-range hotel rooms in the city center typically cost 30,000 to 60,000 ISK per night depending on season.

What is the standard tipping etiquette or service charge policy at restaurants in Reykjavik?

Tipping is not expected in Reykjavik. Service charges are included in most restaurant and hotel bills by default. If exceptional service stands out, rounding up the bill or leaving 10 percent is appreciated but entirely voluntary. This applies to taxis, tour guides, and spa services as well.

What is the average cost of a specialty coffee or local tea in Reykjavik?

A specialty pour-over or flat white at a Reykjavik cafe costs between 650 and 950 ISK. Filter coffee is slightly cheaper, usually 450 to 650 ISK. Herbal or Icelandic wild tea blends, when available, range from 500 to 800 ISK. Prices at hotel restaurants and airport cafes run about 20 to 30 percent higher.

How many days are needed to see the major tourist attractions in Reykjavik without feeling rushed?

Four to five full days allow comfortable coverage of Reykjavik's core attractions, including Hallgrimskirka, Harpa Concert Hall, the National Museum, Laugavegur shopping street, the Old Harbour, and the Perlan museum. Adding a fifth or sixth day opens up half-day or full-day excursions to the Golden Circle, the Blue Lagoon, or the Reykjanes peninsula without sacrificing time in the city center.