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  • Hótel Djúpavík (Strandir Coast; www.djupavik.com; tel. 451-4037): Beautifully situated on the wild and remote Strandir Coast, this former boardinghouse for seasonal herring workers is so warmly and authentically connected to its past that any luxury deficits are irrelevant.
  • The Retreat (Grindavík; www.bluelagoon.com; tel. 420-8800): Unlike the rest of the Blue Lagoon, the Retreat is ultra-exclusive. Hidden behind high lava walls from the rest of the Blue Lagoon is a world-class spa, a private lagoon section, and topnotch dining.
  • 101 Hótel (Reykjavík; www.101hotel.is; tel. 580-0101): This chic design hotel has a lock on Iceland’s fashion set. The place is cool to the bone, right down to the zebra-striped lounge chairs and the contemporary art collection lining the halls.
  • Hótel Egilsen (Stykkishólmur; www.egilsen.is; tel. 554-7700): This beautifully restored, circa-1867 red house is the most charming building in one of Iceland’s most charming harbors. Small and intimate, it's a place to mingle with guests over a glass of wine and cookies in the lounge.
  • Hótel Búðir (Snæfellsnes Peninsula; www.budir.is; tel. 435-6700): This country-hip boutique pad with an estimable restaurant is surrounded by nothing but ocean, broad sandbanks, sprawling lava, stone ruins of fishermen’s huts, and a restored 19th-century church, with Snæfellsjökull glacier loftily presiding over the scene.
  • Hótel Ranga (Hella; www.hotelranga.is; tel. 487-5700): Awake to a Northern Lights alert from South Iceland’s premier resort, a posh, wood-lined lodge with quirky themed suites. Relax in the hot pots fronting one of the country’s great trout rivers.
  • Hótel Tindastóll (Sauðárkrókur; www.hoteltindastoll.com; tel. 453-5002): Each large, handsome room in this lovingly restored 1884 Norwegian kit home is an ideal synthesis of luxury and provincial charm. The natural-stone hot tub is the finishing touch.
  • ION Luxury Adventure Hotel (Selfoss; www.ioniceland.is; tel. 482-3415): Iceland’s first cushy design hotel to set up in a remote area, the ION has a surprising past as an inn for workers at a nearby geothermal plant. Jutting out on pillars off the slopes of Mount Hengill, it’s home to a spa, a modern Icelandic restaurant, and enough edgy artwork to fill a museum.
  • Kex Hostel (Reykjavík; www.kexhostel.is; tel. 561-6060): Housed in an old biscuit factory just off the downtown waterfront, this hostel is as good as they come. From the barber’s chair near the lobby and jazz nights in the restaurant to found-object decorations and a heated outdoor patio, this is roughing it without the roughing part.

Note: This information was accurate when it was published, but can change without notice. Please be sure to confirm all rates and details directly with the companies in question before planning your trip.