The Best Hotels in Iceland, From Rural Lodges to Reykjavik Boutiques

"From Stykkishólmur, travelers can also jump onto the Westfjords ferry, plodding its way through the thousands of rocks, skerries, and islands in the fjord Breiðafjörður before calling into port on the southern edge of Iceland’s least-visited region. But along the way, the ferry makes a mysterious stop at Flatey, the only populated island in the fjord, a wistful place dotted with a handful of colorful houses. Time moves differently here; stay at the island hotel even for just an evening and you’ll feel yourself slipping into the off-kilter rhythm of an Icelandic summer. Hazy golden light falls across the rocky shores and surrounding seascapes, birds cry out as they wheel in the air, and long grass shimmers and waves in the wind as you stumble around in a daze, wondering as travelers so often do in Iceland: is this place real? The humble Hotel Flatey opens only in the summer (in winter the population of the island is around five people), offering comfortable rooms across several 19th-century homes. The interiors are poetically Scandinavian, with a clean and uncluttered design pulled straight from the pages of a magazine. The hotel restaurant serves as the island’s pub and lounge, where locals and summer blow-ins gather in the evening to swap stories and enjoy a warm meal. The entire experience feels like being welcomed into the home of a distant Icelandic relative."