Best Secret & Hidden Gem Hotels in Iceland — Biggest Selection & Lowest Prices Guaranteed

Iceland is full of incredible sights, but some of its best experiences come from where you stay. Among the many hotels and accommodations in Iceland, hidden gem hotels offer a quieter, more intimate alternative to the usual city or tourist-focused stays.

Tucked away in remote valleys, along the South Coast, or near glaciers, these secret hotels give you a chance to unwind in peace while still being within reach of the most beautiful landscapes and hidden gem attractions in Iceland.

Whether you’re planning full Ring Road trips or choosing to rent a car in Iceland for more flexibility, these remote hotels in Iceland make it easier to slow down and enjoy the journey.

What To Expect From Iceland’s Hidden Gem Hotels

Best-kept secret hotels in Iceland offer a more personal and scenic experience, but they also differ from larger hotels in a few important ways. Here’s what you can typically expect:

• Smaller properties – Many have limited rooms, so availability can fill up quickly, especially in summer.

• Remote locations & driving – Often set in the countryside, which may require renting a car in Iceland, driving safely on gravel roads, or planning fuel stops in advance.

• Quiet surroundings – These hotels are typically located away from crowds, offering a peaceful atmosphere and a more relaxed travel experience.

• Closer connection to nature – Many stays are surrounded by waterfalls, mountains, fjords, or lava fields, giving you direct access to Iceland’s landscapes right outside your door.

• Fewer facilities – Some may not have full restaurants, 24/7 reception, or extensive facilities, especially in more remote areas.

• Limited nearby services – Gas stations, restaurants, and grocery stores may be far away, especially in regions like the Westfjords or East Iceland.

• Weather-dependent road access – Especially during winter in Iceland, road access and travel times can be affected, so planning ahead is key.

• Northern lights or midnight sun viewing – Thanks to their remote locations, many secluded hotels offer excellent chances to see the northern lights in winter or experience the midnight sun in summer.

These practical details are part of what makes hidden gem stays feel more authentic and connected to the landscape. With a bit of planning, they offer a rewarding way to experience Iceland’s landscapes with more privacy, space, and fewer crowds.

Where To Find Hidden Gem Hotels in Iceland

Off-the-beaten-path hotels in Iceland are most commonly found in remote regions such as the Westfjords, East Iceland, South Coast, Snaefellsnes Peninsula, and North Iceland. These regions are spread across Iceland’s Ring Road and coastal areas, making them ideal for road trips.

Westfjords

The Westfjords are one of the most untouched regions in Iceland. Many travelers explore this dramatic area through Westfjords tours, which showcase its fjord landscapes, steep cliffs, and winding coastal roads with very little traffic.

Hidden gem hotels here are often small, family-run stays where silence and nature take center stage, making them some of the best accommodations in the Westfjords. Here are some of the top secret or quiet retreats in the Westfjords:

• Country Hotel Heydalur – Located in Heydalur Valley in the Westfjords, surrounded by mountains, rivers, and untouched nature. This peaceful farmhouse hotel is ideal for travelers looking to disconnect completely. It also features natural hot pools and easy access to hiking trails.

• Hotel Latrabjarg – Set near Latrabjarg Cliffs in the far western Westfjords, one of Iceland’s best places to see puffins in summer. The location is extremely secluded with coastal views and near-total silence. It’s a strong hidden gem for nature-focused stays on the edge of Iceland.

• Hotel Laugarholl – Found in the quiet Strandir region of the Westfjords, known for geothermal springs and wide-open landscapes. The hotel sits in a very secluded setting with minimal development around it. Guests come here for the natural hot pot and the deep sense of isolation.

East Iceland

East Iceland, also known as the Eastfjords, is a quieter region defined by long fjords, mountain passes, and small fishing towns along the coastline. Hotels in East Iceland are a great base for self-drive road trips, offering easy access to scenic drives, secluded landscapes, and peaceful coastal stops along the way.

Since this is a quiet region, you’ll find some of the best secret and hidden gem hotels in Iceland. Below are some of the best options:

• Hotel Hallormsstadur – Located in Hallormsstadaskogur, the largest forest in East Iceland, offering a rare woodland setting in a country known for open landscapes. It’s a peaceful countryside luxury hotel surrounded by hiking trails, lake views, and nature right outside your door.

• Hotel Studlagil – Set near the famous Studlagil Canyon, this hotel is a great base for exploring one of the region’s most iconic natural attractions. Located just off the Ring Road, it’s convenient for road trips while still offering an isolated and scenic setting near dramatic basalt landscapes and river views.

• Fjalladyrd Hotel – Located in the remote highlands area of northeast Iceland, close to the edge of the Eastfjords region. It offers an isolated mountain setting with wide open views, with traditional-style turf stays that add a unique cultural touch to the experience.

South Coast

Although Iceland’s South Coast is one of the most popular regions for sightseeing, it is still full of hidden sights just off the main road, often explored through South Coast tours. 

Hotels and accommodations in South Iceland range from cozy countryside guesthouses to remote boutique stays, offering easy access to waterfalls, glaciers, black sand beaches, and scenic driving routes along the Ring Road. Here are some of the best secret and hidden gem hotels in the region:

• Skalakot Manor Hotel – Set in the foothills of Eyjafjallajokull Volcano, this countryside 4-star hotel offers a peaceful and scenic escape. Surrounded by farmland and mountains, it feels private and far from the main tourist flow.

• Frost & Fire Boutique Hotel – Located in Hveragerdi, this hotel is known for its natural hot springs and unique riverside setting. Guests can enjoy outdoor hot tubs, spa facilities, and a relaxing atmosphere surrounded by steaming geothermal landscapes just outside Reykjavik.

• Hotel Jokulsarlon (Glacier Lagoon Hotel) – Located near Jokulsarlon Glacier Lagoon, this hotel offers one of the most dramatic settings in Iceland. While it sits close to the famous glacier lagoon, it still feels surprisingly calm and spacious due to the surrounding glacial landscapes and open wilderness.

• Hotel Dyrholaey – Set on a hilltop near the Dyrholaey Peninsula, this hotel offers wide views of glaciers, black sand beaches, and coastal cliffs. It sits slightly away from the main road, giving it a more secluded feel despite being close to popular attractions like Vik and Reynisfjara Beach.

Snaefellsnes Peninsula

Often called “Iceland in miniature,” Snaefellsnes has almost every type of landscape in one region: lava fields, cliffs, beaches, glaciers, and fishing villages. This means there are plenty of things to do in Snaefellsnes, ranging from scenic coastal drives to exploring unique natural landmarks throughout the peninsula.

Hidden gem hotels in Snaefellsnes are often atmospheric countryside properties or small design hotels with strong character. Top options include:

• Hotel Budir – A famous countryside hotel set in a dramatic lava field near the black church of Budir. It offers a peaceful, almost cinematic setting with glacier and ocean views, making it one of the most romantic places to stay in Iceland.

• Hotel Langaholt – Located along the southern coast of Snaefellsnes, this hotel offers simple, cozy stays with views of Snaefellsjokull Glacier and the Atlantic Ocean. It’s a relaxed base for exploring nearby beaches and Snaefellsjokull National Park.

• Stundarfridur Hotel – A small countryside hotel near Stykkisholmur, offering a quiet and intimate stay in the Snaefellsnes region. It’s ideal for travelers looking for privacy and easy access to both coastal and inland attractions. 

North Iceland

North Iceland is a region known for geothermal activity, volcanic landscapes, and wide open spaces. It's home to the Lake Myvatn area, famous for bubbling mud pools, lava formations, and rich birdlife, as well as Akureyri, the region’s main town and a charming base for exploring northern attractions.

Hotels in North Iceland include comfortable town stays in Akureyri and countryside hotels scattered across the region. Many are hidden gem hotels, often set in quiet locations near lakes, lava fields, and mountains, offering a peaceful base for northern lights viewing in winter.

• Hotel Godafoss – Located near the famous Godafoss Waterfall, this hotel offers a scenic and convenient stop along the Diamond Circle route. It’s surrounded by open landscapes, making it a great base for exploring nearby natural attractions.

• Hotel Laxa – Set near Lake Myvatn, this modern countryside hotel offers peaceful views of lava fields and volcanic landscapes. It’s a strong hidden gem base for exploring geothermal areas and northern lights in winter.

• Hofsstadir Country Hotel – A family-run hotel overlooking Skagafjordur Fjord, offering quiet rural surroundings and wide open views of lakes and farmland. It serves as a great base for exploring nearby attractions like Akureyri, Holar, and coastal villages along the north.

Tips for Booking Hidden Gem Hotels in Iceland

Booking Icelandic hidden gem hotels takes a bit of planning, especially since many are small, remote, and usually in high demand. To help you get the best experience, it’s important to think ahead about timing, location, and travel conditions before you book.

• Early booking – Reserve 3–6 months in advance, especially for the summer (June to August) and northern lights season (October to March).

• Seasonal demand – Expect limited availability in peak months, as many hidden gem hotels in Iceland are small and fill up quickly.

• Location and access – Many properties are remote, so check driving distance to main attractions before booking.

• Rental car – A car is usually required to reach secluded hotels, especially outside major towns. Some rural and gravel-road locations may require a 4x4 vehicle, particularly in winter or highland areas.

• Weather & road conditions – Always check weather updates and road conditions before travel, as Iceland’s weather can change quickly.

• Facilities & amenities – Compare what each stay offers, since some isolated hotels in Iceland don’t have full services like restaurants, daily housekeeping, or 24-hour reception.

• Travel style – Choose based on whether you prefer full isolation in nature or easier access to towns and attractions.

Finding the Right Icelandic Hidden Gem Hotel for You

Choosing the right secluded hotel in Iceland depends on your travel style, preferred region, and the type of experience you want. Whether it’s a remote countryside escape, a cozy boutique stay near famous sights, or a peaceful base for exploring different regions, each hotel offers something unique.

By considering location, season, access, and amenities, you can find a stay that fits your travel style and makes your Iceland trip more personal, relaxed, and memorable.