Hotel Flatey is situated in the centre of the old village of Flatey, in the very heart of Breiðafjörður. The houses in the old centre are timber structures dating from the island's former times of prosperity, and most of them have been restored in their original style.

The hotel's dining room and guest rooms are in converted warehouses flanking the old market square. Guests can savour the unique ambience of the island in cosy and welcoming accommodation and enjoy choice food with a view over the village, the coastline and the nesting grounds of the arctic terns in Skansmýri.