Explore top 2026 5 Star Hotels in Southern Iceland

Name: Torfhús Retreat
Rating: 10

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Top Southern Iceland 5 Star hotels

The Reykjavik EDITION

AUSTURBAKKI 2 Reykjavik

$1,001 nightly

$1,117 total

Aug 18 - Aug 19

Total with taxes and fees

A full-service spa, a 24-hour gym, and a restaurant are all featured at this smoke-free hotel. Relax with a drink at one of the 3 bars/lounges and get perks ...

Diamond Suites by Reykjavik Keflavik Airport

Vatnsesvegi 12-14 Reykjanesbær

$628 nightly

$710 total

Jul 21 - Jul 22

Total with taxes and fees

This smoke-free hotel features a full-service spa, 5 hot tubs, and a restaurant. Traveling on business? Take advantage of the business center, free WiFi in public ...

9/10 Wonderful! (47 reviews)

"We loved it here. So did my kids. They were kind in honoring the airport shuttle but I get the feeling it’s not common. The room was wonderful and more than enough space. A great breakfast. The only thing was there were flies in our room because the windows were open. It didn’t bother us but other ..."

Reviewed on Jul 8, 2026

The Retreat at Blue Lagoon Iceland

Norðurljósavegur 9 Grindavik Southern Peninsula

This luxury hotel features a full-service spa, hot springs, and 3 restaurants. Enjoy the 24-hour gym and free perks like cooked-to-order breakfast and valet ...

9.8/10 Exceptional! (172 reviews)

"I only have one recommendation for the hotel. In the lobby, change the ringtone at reception. It is the default tone that immediately breaks the vacation mentality and brings one back to the normal grind of every day life"

Reviewed on Jul 8, 2026

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Torfhús Retreat

Dalsholt Bláskógabyggd South Iceland

This luxury cabin features 15 outdoor pools, a restaurant, and a bar/lounge. There's no skimping on freebies - guests receive free buffet breakfast, free WiFi, ...

10/10 Exceptional! (39 reviews)

"Our stay at Torfhús was truly memorable. The reception and restaurant building is beautifully designed in the style of a traditional Viking home, with wood, turf, and fascinating artifacts throughout. Every detail felt thoughtful and immersive, especially the stunning couch crafted from an old fishing ..."

Reviewed on Jun 21, 2026

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Lowest nightly price found within the past 24 hours based on a 1 night stay for 2 adults. Prices and availability subject to change. Additional terms may apply.

Southern Iceland Resorts & 5 Star Hotels

Looking for your own little slice of heaven during your next trip? Check out all the best 5-star hotels in Southern Iceland to make sure your trip is as extravagantly comfortable as you expect.

Whether you plan on staying in your room the whole time or getting out and enjoying the city, you’ll be living the life while staying at your luxury accommodation. With so many amenities at your beck and call, you might try to turn your stay into a staycation!

Many of the 5-star hotels have award-winning restaurants you can dine at, as well as plush bedding and a concierge service to take care of your every need. Most also offer pools and modern fitness centers, not to mention high-speed Wi-Fi.

For your next trip, book a hotel that can be your own little hideaway, whether you’re in town for business or leisure. Southern Iceland 5-star hotels provide you with all the comforts and amenities you expect from a sophisticated hotel, with a staff that’s happy to ensure you have everything you need to feel at home.

Whether you’re a first-time guest, or you’ve stayed in 5-star hotels in Southern Iceland before, you’ll have no shortage of options to choose from on your next trip when you book with Travelocity. Browse our vast selection and find great deals on luxury lodging.