Blábjörg Resort & Musterið Spa: Loved by elves and humans alike

Elves, puffins, Moonshine, and stunning wilderness – at Blábjörg Resort & Musterið Spa, you can experience the real Iceland. Nestled by the Borgarfjörður Eystri fjord and the Elf City, the resort offers accommodation and experiences for everyone, from spa-goers to hardcore hikers, laidback cultural explorers – and beer enthusiasts.

Imagine this: you’ve driven along Iceland’s famous Ring Road, captivated by the sweeping views of the North Atlantic Ocean and the rugged cliffs of eastern Iceland. Enticed by the tales of the mystical Elf City and the prospect of seeing the nearby colony of charming puffins, you decide to take a one-hour detour down a small mountain road to spend a day or two at the Blábjörg Resort & Musterið Spa. Now, you are sitting in a hot tub, enjoying a panoramic view of the area’s dramatic mountains, soaking in nourishing local seaweed while next to you, your partner is melting into a tub of warm beer, yes, beer. At the resort’s restaurant awaits an enchanting culinary and cultural experience combining locally sourced ingredients, home-brewed beer, and local mythology. You have no regrets.

This is precisely how most people experience their stay at Blábjörg Resort & Musterið Spa. “We are 70 kilometres off Route 1, and yet we see quite a lot of people passing through the area. The people who come to my place and the village really want to be here; they put in the extra effort, driving the mountain road for an additional hour. I can tell you, they never regret it,” says owner and manager Auður Vala Gunnarsdóttir. “Even in winter, when some get stuck, their positivity is unbelievable. For them, this is an adventure—the real Iceland. It’s about meeting friendly, open people and exploring the countless hiking trails available.”

Auður Vala Gunnarsdóttir and her husband Helgi Sigurðsson own and manage Blábjörg Resort & Musterið Spa as well as the KHB Brewery.

From old fish factory to enchanting spa

Located in the small village of Bakkagerði, surrounded by unspoiled nature and saturated by Eastern Iceland’s serene and mythical atmosphere, one might think that Blábjörg Resort & Musterið Spa is all about relaxation. It is not, though. With its own brewery and distillery, ambitious restaurant, and stunning hiking and wildlife experiences, the resort offers something for all the senses. But it was not always like this. Before Gunnarsdóttir and her husband took over the place in 2006, it was, believe it or not, a derelict fish factory. In 2007, the couple started renovating and rebuilding the place, and step by step, it has turned into an enchanting resort with accommodations for a wide variety of preferences and budgets.

Today, guests can choose from a cosy guesthouse with shared facilities, comfortable deluxe hotel rooms with private amenities, or luxurious apartments. This means a wide variety of guests are catered for: seniors seeking culinary adventures and relaxing spa experiences, families eager to explore nature, and hiking enthusiasts looking for adventure.

The aim of the resort, spa, restaurant and brewery is to make everything as sustainable as possible

Original Icelandic Moonshine

A perhaps surprising aspect of a visit to Blábjörg Resort & Musterið Spa is the resort’s successful microbrewery and distillery, KHB Brewery. Originally founded on a wish to produce the original Icelandic Moonshine, a spirit that came about during Iceland’s prohibition years in the early 20th century, the brewery and distillery today produces a wide range of award-winning spirits and beers. Still, KHB Brewery is the only distillery in Iceland that produces Moonshine, also known as Landi. It is made using the knowledge and methods of older generations and, in 2023, received a bronze medal in the London Spirits Competition.

“I never understood why no one started producing moonshine and making it more visible. I always talked about wanting to do that,” says Gunnarsdóttir. When an old house just ten meters from Blábjörg became vacant, she decided to do just that. “My husband and sister joined in and started making liqueurs and gin, and since things have gone really well, she continues. “Then we thought, why not do beer, too? So, we started a brewery. One of our main goals with this company is to make it as sustainable as possible, and therefore, we are focusing on local ingredients in everything we do, as well as baking our bread and cakes ourselves.”

Beautifully located, Blábjörg Resort offers an array of stunning hikes and nature experiences.

Soak in the good life

Even in the luxury aspects of the Blábjörg experience, using and reusing local ingredients make for a more responsible indulgence. In the spa, for instance, guests can enjoy the proven beneficial effects of soaking in beer from the microbrewery or local seaweed. Meanwhile, beef served at the restaurant will have been fed by the leftover pulp from beer production.
These are all experiences loved by guests but not necessary for a good stay, says Gunnarsdóttir. Some guests come just to enjoy nature, walk around the mythical Elf City, where the Elf Queen lives according to Icelandic tales, and soak in the remote serenity that seems attractive to elves and humans alike.

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