Developers plan 220-room hotel above Fjaðrárgljúfur

Steinar Resort plans to build a 220-room hotel near Fjaðrárgljúfur canyon, with accommodation for up to 500 people, mbl.is reports. The project would cover 28 hectares at Heiðarsel in Skaftárhreppur municipality, east of the Lakavegur road.

The plans, recently approved by the municipality, also include 15 to 20 cabins, staff apartments and the renovation of existing homes. Total building space would be about 18,000 square metres.

“Things could start moving in the spring,” Torfi G. Yngvason, one of the company’s owners, told Morgunblaðið. He said the planning process was nearing completion, with a few weeks left, after which the company would step up its search for partners.

Torfi said the company had introduced the project to potential operators and received strong interest. It plans to own the hotel and work with an international operator, he said, adding that the aim is to create a distinctive destination hotel rather than a hostel.

An estimated 300,000 visitors come to Fjaðrárgljúfur each year. The canyon has been a popular stop for tourists since Justin Bieber filmed a music video there in 2016. Torfi said there was a shortage of accommodation in southern Iceland.

Preparations for the project have been under way for seven years, and completion could take another five to six years. Torfi put the investment at 120 million to 130 million euros, equivalent to as much as 17.7 billion Icelandic krónur. He said the project still needs hotel designs, an environmental assessment and an agreement with an operator, and could take up to 20 years in total.

Steinar Resort previously abandoned plans for a large hotel development in Ásahreppur after strong opposition from residents. A separate project under Eyjafjöll is still in progress, Torfi said.