Almost everyone flying to Iceland lands at Keflavík International Airport (KEF), out on the Reykjanes peninsula about 50 kilometres southwest of Reykjavík. The distance puts most Iceland airport hotels either right by the terminal or back in the capital, and for hotels near Keflavík Airport the appeal is obvious: the Blue Lagoon sits roughly 20 minutes away, and Icelandair runs Reykjavík as a mid-Atlantic stopover between Europe and North America, so a fair number of guests are connecting rather than staying. The capital keeps a second airport, Reykjavík Airport (RKV), for domestic hops and routes to Greenland and the Faroe Islands.
People come for the Northern Lights, the midnight sun, the geysers and waterfalls, and the volcanic country that makes the drive in from the airport look like another planet.
Hotels near the airport
If your flight leaves at 5am, the hotels around Keflavík and the Reykjanes peninsula are the sensible choice. They also work well for anyone picking up a hire car to start a ring-road tour, since you avoid the early drive back out from Reykjavík.