Arriving at the Arnarhvoll in darkness, as you may well do if you visit at this time of year when Iceland enjoys just a few hours of daylight, is underwhelming. The newest of the clutch of five, family-run Centerhotels is a drab grey structure like much of downtown Reykjavik. Aesthetically, both belie the Icelandic capital's reputation as a hip short-break destination.
But don't be put off by the hotel's stark exterior. Inside the concrete bunker you'll find a modern Scandinavian interior: sleek stone and wooden floors; Robin Day-style sofas; some odd, but comfortable, squishy egg-shaped stools; and plenty of large windows waiting for the long, summer days to return.
The Arnarhvoll opened in 2007 at the peak of Iceland's financial boom, designed to appeal to business travellers and weekend trippers keen for a hit of the city's heady nightlife and foodie culture.
The reception area is small but staffed by charming people, while coffee is available in the adjacent lounge. The frills don't extend much further than this. What the Arnarhvoll does, though, it does well. The pared-back design and low room rates seem prescient in light of the economic collapse that befell the country a year ago. The eighth-floor Panorama restaurant offers views across the port and beyond to the snow-tipped peaks that border the city, revealing the scale of this barren isle; it is almost the size of Cuba, yet has only 320,000 people (compared with 11 million in the Caribbean's largest nation).
A generous buffet breakfast of warm breads, cold meats, cheeses, cereals and pickled vegetables and herring is included in the room price, which is a welcome bonus in what is still an expensive city. The restaurant serves French-Scandinavian cuisine for lunch and dinner, and has a decent European and New World wine list.
Try not to look at the building site directly below the hotel, where the construction of a waterside Music Hall – intended to be the capital's star attraction – has stalled. The authorities have taken over responsibility from private contractors since the financial crash, but progress is at a standstill with completion optimistically billed for 2011. When the project is finished, however, the Centerhotel Arnarhvoll will have prestigious views of Reykjavik's grandest building.
All five Centerhotels are clustered around Reykjavik's compact city centre. The Arnarhvoll overlooks the port in the fashionable 101 district and lies a few blocks below Laugavegur, the busiest and oldest shopping street lined with designer boutiques, bookstores and cosy cafés and bars. The Hallgrimskirkja, a modernist cathedral and the centrepiece of the city, is also within walking distance.
Although the hotel's minimalist décor gives it a cold feel, this is balanced by the warmth of the staff.
The 104 rooms are either standard or deluxe and there are few frills. Décor is plain: slate floors, white walls and a basic bathroom, but the beds are impressive: firm mattresses and high-quality linen and pillows. In my sixth-floor deluxe room, the two bay-facing walls incorporated floor-to-ceiling windows.
There is a spa with a hot tub, steam room and sauna, but no treatments. Empty every evening on my visit, it was almost as good as having a private spa. Unfortunately, one has to trek through reception in a dressing gown to reach it. Access is included in the rates for a deluxe room, otherwise you pay €10 for unlimited use during your stay.
Centerhotel, Arnarhvoll, Ingolfsstraeti 1, Reykjavik, Iceland (00 354 595 8540; arnarhvoll.is).
Standard doubles start at €50 with breakfast, deluxe rooms start at €70