The story began in the autumn of 1959 when Árni Stefánsson and Þórhallur Dan accepted an offer from Ásgrímur Halldórsson manager of the Co-Op, “Kaupfélag Austur Skaftfellinga” to take over the management of Hótel Skálholt which at the time was owned by the Co-Op.
The Hotel stood by the harbour in a house called Hvammur (a second name, Skálholt). It had been the residence if the ship-owners Jóns J. Brunnan and Sigurðar Ólafssonar for quite some time.
Hótel Skálholt was prospering under the management of Árni and Þórhallur and their wives, sisters Svava and Ólöf Sverrisdætur. From 1960 a continuing rise in tourists, both Icelandic and foreign visited Höfn and soon the Hotel couldn't meet the demands for accommodation. In the year 1963 Árni and Þórhallur applied for a building site for a new Hotel on the outskirts of the small town inhabited by only 700 people.
The construction began on May 17th 1965. A dining room seating 120 – 130 guests and a kitchen opened on October 1st the same year and a 20 room wing on three floors opened on June 17th the following year.
The new building was named Hótel Höfn and when it opened the old Hótel Skálholt was closed down.
In 1971, 20 new rooms were added to the building thus creating accommodations for 68 persons in 28 double rooms and 12 single ones.
In the mid nineties a new restaurant was added to the ground floor of the west wing and a couple of years later the main entrance was altered by adding a small annexe.
The owners thought of different ideas to stimulate the business, for example they invested in small busses and took their guests sightseeing to the countryside as far as the Öræfi, opened op a wine bar, held weekend dances and rented out rooms to the workers from the fish plant.
The Hotel was also the perfect setting for annual celebrations, conferences, meetings and divers gatherings. It was important to make the most of every possible use since the number of staying guests dropped drastically in the winter or down to 50% on a yearly basis even if it went up to 90% during the summer.
From the beginning the owners of the Hotel have put their pride in professionalism and have been active in the managing as well as attending other jobs and their homes.
When Þórhallur died an untimely death in 1975, Árni dedicated himself to the management of the Hotel. After a long and successful running Árni, Svava and Ólöf sold the Hotel at the end of the year 1996. The buyer was The Tourist Bureau of Iceland but in the year 2001 the ownership changed hands again when Gísli Vilhjálmsson and Óðinn Eymundsson with their wives Þórdís Einarsdóttir and Elísabet Jóhannsdóttir bought the Hótel.
Gísli and Óðinn are both professional chefs and had previously owned and run the restaurant Ósinn.