Hótel Flatey has some of the most charming, nook-like vintage rooms in Iceland, and the on-site restaurant (mains lunch 2400kr to 3200kr, dinner 4300kr to 6100kr, three-course menu 9500kr; open noon to 5pm and 6pm to 9pm) is fantastic as well. On some evenings, slip down into the basement bar for live music.
Hótel Flatey
Top choice in West Iceland