Beyond the city hotel: unique design stays in Iceland’s hinterland

From sleek Nordic cabins to traditional turf houses, they all engage with the landscape

Of the 1.7 million people visiting Iceland each year, most stay within the confines of the country’s capital, Reykjavík, or its easy-reach ‘Golden Circle’ wonders – gasping at falls, geysers and rifts in this popular Southwest region.

More intrepid adventurers venture onwards along the ancient south coast, with its black beaches and glacial lagoons, or to the western peninsula of Snaefellsnes, for its conical volcano and basalt-chiselled coast. Others may embark on a full circle of the country’s ‘ring-road’ via the eastern fjords and the cultural northern city of Akureyri or even brace themselves with snowshoes and specialist wheels for a tour of the fabled, uninhabited highlands of the interior.

Volcanic activity is a fact of life in Iceland, and despite the recent eruption at Sundhnúkagígar on 16 March 2024, much of the country remains open to tourists.

While Reykjavík harbours Iceland’s greatest concentration of design-led accommodations, there’s more to be discovered further afield. We report back from its less-trampled hinterland, unearthing some of the most thoughtful design-led spots – from luxury remote cabins to craft-centric lodges and reinvented turf houses.

The Ion Adventure Hotel

The Northern Lights bar has prime views over the valley. The concrete ribs and glass end almost make the building look like the bellows of a camera. Photography: Louise Long
The Ion’s Northern Lights bar has prime views over the valley. The concrete ribs and glass end almost make the building look like the bellows of a camera. Photography: Louise Long (c)

Less than an hour east of Reykjavik, the road diverts off the main route to Þingvallavatn National Park towards its accompanying Lake, where at the south, rising plumes of white smoke announce the Nesjavellir power station. It would be easy to overlook this pseudo-industrial landscape as the setting for a boutique hotel, yet this is where (LA–based) Icelandic architecture firm Minarc opened the ION Adventure Hotel in 2013 on the site of an abandoned hostel for industry workers.

A matrix of now-iconic stilts props the design hotel’s forty-odd rooms, pre-fabricated for sustainability and complete with water-saving concrete bathrooms, drift-wood sculptures and wool rugs. From music to the menus, every detail is Icelandic, in the vision of Founder Sigurlaug Sverrisdóttir. The hotel’s highlight is the Northern Lights bar: a double-height glass vitrine jutting from the main facade. Below, guests step out onto the LAVA Spa – its sleek geothermal-heated pool almost flush with the moss-clad terrain beyond.

Torfhús Retreat

The grassy roofs of the 15 torfbæir blend them into the tawny scrub that blankets the valley. Photography: Louise Long
The grassy roofs of the 15 torfbæir blend them into the tawny scrub that blankets the valley. Photography: Louise Long

Traditional Icelandic turf-houses (or torfbæir) date back to the 9th-century settlement of Iceland and thrived until the middle of the last century. For Icelandic-Swiss couple Siggi Jensson and Alex Hoop, no other architectural vernacular made sense when they were building their Torfhús Retreat on a wind-whipped glacial valley within reach of the Golden Circle.

Fifteen grassy-roofed cottages, each named after Norse gods, now make up this luxury outpost. The largest have kitchens and private geothermal pools, fashioned from the same local basalt as the dry-stone walls of the properties themselves. Inside, wood panelling and rafters are from reclaimed Austrian pine—11 tonnes of which are earmarked for two new 8-person chef-catered villas, opening in 2024.

An 18th-century corn barn houses the Retreat’s reception and fine-dining restaurant, with Nordic-inspired interiors featuring salmon-leather wall-hangings, Ukrainian folk figurines, and a replica of Viking long-boat no less, in homage to the region’s historic settlers. ‘The spirit is all Icelandic,’ says Hoop.

Hotel Rangá

Hotel Ranga
Photography: Louise Long

Beyond the buzz of the Golden Circle, southern Iceland is horse riding and cattle-grazing territory, wended by volcanic streams tumbling into epic, monochrome estuaries. Family-run Hotel Rangá rests here on the northerly bank of its eponymous river – a simple low-rise lodge that belies the charm within. Rooms extend in either direction from the conservatory restaurant, sun-rise terrace (with obligatory hot tubs) and upstairs lounge – where the hotel’s art collection includes The Ladies Legs, a pair of carved wooden chairs spotted by Hotelier Fridrik Pálsson on a trip to Italy.

Most rooms feature bespoke murals by local artists, whilst the ‘Continental Suites’ are as surprising as they are transporting. The ‘South American Suite’ is a cocoon of Inca-inspired wood panelling, Uruguayan table lamps, a large Peruvian tapestry above the bed, and a stepped ceiling in homage to the Andes. “When we first were considering a continental theme, I was pretty hesitant,” says Fridrik. ‘I worried it could feel inauthentic. But now I can proudly say that we have done a hell of a good job. Those who have visited and lived in these continents always comment that we made these rooms really authentic.’

Svartaborg Cabins

The charred exterior of the Svartaborg Cabins
The charred exterior of the Svartaborg Cabins juxtaposes the golden landscape of the Skjálfandafljöt Valley. Photography: Louise Long (c)

‘We started with the landscape’, says Róshildur Jónsdóttir, one half of design-couple Hugdetta, who created Svartaborg, a cluster of remote luxury cabins on a remote hillside in northern Iceland. With all but the shifting panorama of the Skjálfandafljöt Valley for company, these six (soon to be nine) 55 sqm houses are the duo’s most ambitious project to date, combining architectural, furniture, lighting and interior design.

Minimalist black-wood exteriors echo the roofline of the original barn on the nearby farm, where Róshildar’s family lived as cattle farmers. The couple have been renovating farmhouses and barns for their own home and studios since 2017 before expanding their venture into hospitality.

Photography: Louise Long

Inside each of Svataborg’s glass-fronted, walnut-wood cabins are bespoke design pieces by the couple,  from salt dishes to basketry to blankets, drawn from recent collaborations with artisans in Sierra Leone or from their long-term Nordic partnership 1+1+1.

‘We travel a lot, so we designed the houses to be perfect for us as a couple,’ says Róshildar. Indeed, every detail has been considered, from a bathroom door that opens onto the aurora borealis-gazing hot tub to the concrete floor set with local glacial sediment and polished to enhance its natural hues.

The Retreat at the Blue Lagoon

Blue Lagoon Retreat
The cloudy blue waters at the Blue Lagoon are said to have skin-healing properties due to its abundance of silica and minerals. Photography: Louise Long

Iceland is famous for its volcanic landscape and is still home to one of the world’s most active volcanoes, which erupted at Sundhnúkagígar on 16 March 2024. This temporarily shuttered the Blue Lagoon, one of the country’s most famous attractions.

Still, it’s hard to meet a tourist that doesn’t end up at the landmark and harder still to move about in the UNESCO-protected milky blue waters once you’re there. But for the lucky few, an exclusive side entrance beckons to The Retreat, a luxury 62-suite hotel with a spa and private bathing.

A view across the lava field surrounding the Blue Lagoon. Photography: Louise Long

Basalt Architects, led by founding partner Sigríður Sigþórsdóttir, undertook extensive investigations of the local topography and ecology during the design process, allowing natural cracks and fissures in the earth to inform the tributary-esque layout. The waterfront entrance lounge – welcoming guests for breakfast and afternoon tea – reveals precast concrete, locally sourced terrazzo floors, and dappled metallic screens that mimic aerated igneous rock.

Dinner is at Michelin-starred Moss Restaurant, where the chef’s table is a slab of lava rock quarried onsite, or at the more relaxed Lava restaurant, with diners in their spa dressing gowns. From here, a corridor gives way to a series of sultry nooks and chambers, offering rest beneath rain-drop ceilings or before glowing fires. Not omitting the hotel’s signature spa ‘Ritual’, featuring subterranean basins of silica mud and lava salt scrubs to round off one’s lagoon soak.

It’s expected that both the Blue Lagoon and  The Retreat will reopen this spring. However, check the Icelandic Meteorological Office and Blue Lagoon website for full information related to recent volcanic activity.

See more of these unique destinations in the gallery below.

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