At first sight, Ranga looks nothing like a luxury destination. A low-level building standing remote on a treeless, wind-blasted plain, it hardly screams "welcome", let alone "indulgence". But what lies behind the simple façade makes this independent design hotel well worth the almost 60-mile drive from Reykjavik – indeed, Ranga is the only four-star accommodation you'll find outside Iceland's capital.
Inside, this hotel is as cosy and calm as a sauna cabin, with thick, Canadian pine-log walls and terracotta tiles throughout the rambling ground floor. The interior is simple and unfussy, all natural textiles and neutral shades, with a few quirky touches (such as Hrammur, the 10ft tall stuffed polar bear in reception), but its cocooning warmth and peaceful, intimate atmosphere banish the bleak outdoors.
The service is spot-on: warm, personable and obliging, and the charming owner mingles affably with his guests to ensure a good time is being had. The staff also have that knack for discreetly blending into the background, so it sometimes feels as if you have the whole place to yourself.
Ranga is named after the fast-flowing river alongside it, which teems with wild salmon in season. The only other signs of wildlife are the stout and hairy native ponies that roam the extraordinary volcanic landscape, which can be explored by Jeep from the hotel. Life indoors also invites close observation, as this subtly chic hideaway is an under-the-radar retreat for celebrities: Hollywood star Jake Gyllenhaal and British explorer Bear Grylls have stayed here recently; Kirsty Allsopp and Phil Spencer made it their base while filming an episode of Vacation, Vacation, Vacation, which is due to air on Channel 4 later this month.
There are 44 standard doubles in one wing, modest but comfortably spacious, and well laid out, with a sofa and wall-mounted TV. Room service and laundry service are available and there are ironing facilities and hair dryers in all rooms. The en-suite bathrooms have large Jacuzzis. In the opposite wing is the World Pavilion, which has seven truly astonishing luxury suites with daring decor themed on the different continents and featuring masses of genuine artefacts from each. Jake Gyllenhaal stayed in "North America" which, with its cowhide upholstery and a bison head and kayak mounted on the walls, ought to be renamed "Brokeback Mountain". You'll be too busy gaping in wonder at the bearskins, butterfly cases, didgeridoos or Aztec wall-hangings to switch on the TV or be distracted by the free Wi-Fi access. The showcase suite is the Master Royal – a dazzling shrine to monochrome minimalism, complete with life-size model penguins.
The food and drink
Restaurant 4 is a large, glass-walled cube with a panoramic view of the river, plains and distant mountains, which you can contemplate as you eat breakfast. (Children of all ages cannot resist the make-your-own waffle iron at the buffet counter.) The sophisticated, Nordic-inspired menu is heaven for any gourmet who likes to eat local and seasonal: try venison carpaccio with truffle oil, Arctic char with fennel salsa, or a surf'n'turf mountain-lamb-and-lobster combo, served with potato terrine and blueberry demi-glaze. If you're offered the delicacy of fermented shark, go for it – it tastes way better than it smells. In the stylish bar, or mezzanine lounge, you can try fine wines, locally brewed beers, an Eskimojito cocktail made with Icelandic schnapps, or a dram from the hotel's £3,000 bottle of extremely rare Dalmore Aurora whisky – named in honour of the aurora borealis.
The aurora borealis is the most spectacular feature of this hotel. This landscape, free of light pollution, is one of the world's best settings for viewing the natural phenomenon and it's even better from one of the three outdoor geothermal hot tubs, an Eskimojito in hand. A noticeboard on the reception desk allows you to state if you'd like to be woken should the legendary solar activity burst into action after you retire for the night. There is no spa, but you can book in-room massage treatments in advance of arrival, from £30 per half hour. Jeep excursions to waterfalls, glaciers and geysers, and helicopter flights over the Mount Hekla volcano can also be arranged.
There is good access for guests with disabilities because all standard rooms are on the ground floor, as are the restaurant and the bar. Children are welcomed. No pets allowed.
A standard double costs from £180 per night, up to £600 for the Master Royal suite. Discounts up to 30 per cent apply to three- and four-night stays booked online for May 2011.
Hotel Ranga, 851 Hella, Iceland (00 354 487 5700; hotelranga.is).