Iceland is one of the few places where spending more changes what you can see and do. The landscapes are the same whatever your budget: glaciers, black sand beaches, geothermal lagoons and, in winter, the Northern Lights. What money buys here is time, space and access. You get a guide who knows where the aurora will be tonight, a helicopter that lands on a glacier, and a room with glass walls in the middle of a lava field. This guide covers the best luxury hotels in Iceland, the experiences worth paying for, and how to plan a high-end trip.
When to go for a luxury trip
Iceland has two very different seasons. Summer, from June to August, brings the midnight sun, open highland roads and the best weather for helicopter flights and hiking. Winter, from roughly September to March, is the season for the Northern Lights, ice caves and snow-covered landscapes, with short days and changeable weather. For a luxury trip that combines both, late September and early October often work well, with dark enough nights for the aurora and milder conditions than midwinter. Our guide to the best time to visit Iceland goes through each month in detail.
The best luxury hotels in Iceland
The Retreat at Blue Lagoon
Built into an 800-year-old lava flow beside the Blue Lagoon, the Retreat is Iceland’s best-known luxury hotel. Every suite has views over the moss-covered lava, guests have access to a private lagoon and a subterranean spa, and the restaurant, Moss, serves a tasting menu built on Icelandic ingredients. Note that the Reykjanes Peninsula near Grindavík has had repeated volcanic eruptions since 2023, and the lagoon and hotel have closed temporarily several times. Check the current status before booking.
ION Adventure Hotel
The ION sits on stilts on the slopes of the Hengill volcano, not far from Þingvellir National Park and about an hour from Reykjavík. Its Northern Lights Bar has floor-to-ceiling windows, and the outdoor geothermal pool looks out over the lava fields. It’s well placed for the Golden Circle, and far enough from city lights for good aurora viewing.
Deplar Farm
In the Troll Peninsula in the far north, Deplar Farm is a converted sheep farm turned remote luxury lodge. Stays are all-inclusive, with guided activities that change with the season: heli-skiing in spring, fishing and hiking in summer, and Northern Lights in winter. It’s among the most expensive stays in the country, and one of the most isolated.
Hotel Borg, Reykjavík
Opened in 1930 and overlooking Austurvöllur square, Hotel Borg is Reykjavík’s classic Art Deco hotel. It’s a good base for the first or last nights of a trip, within walking distance of the city’s restaurants, the old harbor and Hallgrímskirkja church.
Luxury experiences worth paying for
Private Northern Lights tours
The aurora can appear on clear, dark nights from about September to March, but it depends on solar activity and cloud cover, so there’s never a guarantee. A private guide makes a real difference: they watch the forecasts, drive you away from the clouds, and can often take professional photos of you under the lights. Stay somewhere outside Reykjavík, plan several nights in the country, and follow the aurora and cloud forecasts from the Icelandic Met Office to improve your chances.
Helicopter tours
A helicopter reaches parts of Iceland you can’t drive to: landings on glaciers, flights over volcanic craters and geothermal valleys, and remote waterfalls in the highlands. Several operators fly from Reykjavík, including Norðurflug, with tours from under an hour to half a day. Weather decides everything, so schedule the flight early in your trip to leave room for a rebooking.
Glacier hikes and ice caves
Guided glacier walks on Sólheimajökull or in Skaftafell include crampons, ice axes and a certified guide, and they’re one of the most memorable things to do in Iceland. In winter, natural ice caves form under Vatnajökull, Europe’s largest glacier by volume, and are usually visited from around November to March. A private guide lets you go at your own pace and avoid the busiest times.
Geothermal spas
The Blue Lagoon is the famous one, and booking the Retreat Spa gives you a quieter, more private experience than the main lagoon. Around Reykjavík, Sky Lagoon has an infinity edge overlooking the ocean. Further afield, the Mývatn Nature Baths in the north and the Secret Lagoon (Gamla Laugin) in Flúðir are smaller and more relaxed. Book popular spas in advance, especially in summer.
Fine dining in Reykjavík
Reykjavík has a small but serious restaurant scene built on local lamb, Arctic char, langoustine and skyr. Book tasting menus well ahead, as the best restaurants have few tables.
A sample 6-day luxury itinerary
Spend the first two nights in Reykjavík, exploring the city and eating well. Move to the ION for two nights to drive the Golden Circle (Þingvellir, Geysir and Gullfoss) and look for the aurora. Then head along the South Coast past Seljalandsfoss and Skógafoss to Vík’s black sand beach, with a glacier hike on Sólheimajökull on the way. Finish with a night at the Retreat at Blue Lagoon, which is close to Keflavík airport, if it’s open.
Planning tips
Hire a private driver-guide in winter unless you’re confident driving on ice and in strong wind. Book the top hotels and spa experiences months ahead, especially for summer and the peak aurora season. Keep at least one day in your plans for weather, since tours are cancelled often. And pack properly: waterproof layers and good boots matter more in Iceland than anywhere else you’re likely to travel.
Frequently asked questions
What is the most luxurious hotel in Iceland?
The Retreat at Blue Lagoon and Deplar Farm are usually considered the most luxurious. The Retreat is known for its private lagoon and spa, and Deplar for its remote all-inclusive adventure stays.
Is a private Northern Lights tour worth it?
For many visitors, yes. A private guide can react to the forecast and drive to wherever the sky is clearest, which a large bus tour can’t, and you avoid the crowds at the usual viewpoints.
How many days do you need for a luxury Iceland trip?
Five to seven days is enough to combine Reykjavík, the Golden Circle, the South Coast and a spa stay without rushing. Add more time if you want to reach the north or the east fjords.