A Look Inside Kangaroo Island’s Newest Luxury Villas

Above the still waters of American River, a small collection of villas sits among the trees looking straight out over Eastern Cove. Paperbark, eucalypt and scrub oak lean up close to the decks, and the line between bush and building stays blurred. Here, just 30 minutes from Penneshaw, guests get a sense of what secluded, nature-immersed luxury really feels like. We take a look inside Mercure Kangaroo Island Lodge’s Luxury Villas to find out just what it’s like to stay.

An American River location

American River is one of those spots on the island that feels as though it’s been quietly minding its own business for years.

Located on the eastern side, a 30-minute drive from Penneshaw, it’s defined by a long, sheltered stretch of water with low hills layered behind it. Pelicans float by in the shallows and the shoreline is stitched together with coastal eucalypts, paperbark, banksia and scrub oak.

Set above the bay, Mercure Kangaroo Island Lodge‘s new luxury villas look straight out across the water. Large double-glazed windows pull the view into the room, and the turning tide and sound of birds become part of the day. Built low amongst the landscape and tucked into the existing vegetation, these brand new buildings allow the trees to wrap around them.

The new villas, finalised at the end of 2025, are unmistakably Kangaroo Island, built to offer privacy and seclusion. In fact, it’s entirely possible that the only neighbour you see is a wallaby amongst the bushes.

The luxury villas

Stepping into one of the new villas, the first thing you notice is how closely the space is tied to its surroundings. Large windows and a private deck turn the view into part of the room. Eastern Cove is at touching distance behind the glass, and the design of the rooms keeps your attention fixed on the water and the bush.

In the bedroom area, off to one side, a king-sized bed is complemented by contemporary furnishings and a palette that subtly reflects the landscape. A spacious living area at the heart of the villa is all about simple, well-chosen furniture and a restrained, contemporary style.

During your stay, you’re kept warm or cool, depending on the season, with double glazing, and all the comforts you need, including a 65-inch 4K Smart TV, Wi-Fi and a Bluetooth speaker for when you want them. The quietly luxe theme continues into the kitchenette, complete with a Nespresso machine and bar fridge, making coffee on the deck even more tempting.

Set away from the main hotel, Mercure Kangaroo Island Lodge’s Luxury Villas hand you privacy without cutting you off from the main property. Guests can wander over to the cosy bar at any time of day, enjoy dinner at Reflections Restaurant, or spend time by the saltwater pool overlooking the bay, before returning to their own quiet corner.

Wining and dining

When the time comes to dine, things are centred on Reflections Restaurant, which sits near the water and works closely with South Australian and Kangaroo Island produce. Dinner is served à la carte, with a menu that serves seafood, meat and plant-based dishes alike.

Starters include treats such as stone-baked focaccia with local olive oil, anchovy toasts with marinated peppers, and scallops in black garlic butter, with mains featuring South Australian barramundi and Bindaree scotch fillet, slow-roasted island lamb, house-made gnocchi and a lentil ragu with seasonal vegetables. Sides and desserts stay seasonal and restrained, letting the produce do most of the work.

A bar and lounge next to the restaurant serves drinks and lighter options, making it easy to kick back with a pre-dinner glass of wine or enjoy an evening without leaving the property. Breakfast is served at the hotel too, which means you don’t have to leave American River before you’ve eaten.

Kangaroo Island at your doorstep

Situated on a sheltered inlet that witnesses a steady flow of wildlife, American River puts much of what people come to Kangaroo Island to see right on your doorstep. Black swans, pelicans, kingfishers and egrets gather along the shore, while wallabies and kangaroos move through the surrounding bush in the early morning and late afternoon. Calm, tidal waters suit gentle kayaking and paddleboarding, and walking tracks lead out into nearby wetlands and coastal scrub.

A 20 minute drive from American River takes you to Pelican Lagoon Conservation Park, where winding trails thread through wetlands and coastal scrub, home to some of the island’s best birdwatching opportunities. Heading north from the conservation park, Penneshaw sits about 30 minutes away, with its calm beaches, small town’s cafes and galleries and of course ferry terminal.

To the south-west of American River, the sandy shoreline of Vivonne Bay, often ranked among Australia’s best beaches, is roughly 40-minute drive across the island, where swimming and beach walks feel totally uninterrupted. Closer by, gentle walking trails such as the American River Foreshore Walk follow the inlet’s edge and are excellent for spotting waterbirds at low tide.

For a different kind of landscape, the rolling dunes and lace-like saltmarsh around Nepean Bay are within easy reach too, offering endless views across the water and sand.

And if an afternoon off the coast appeals, several of Kangaroo Island’s cellar doors and wineries are also within a 30-minute drive, including Bay of Shoals Estate near Kingscote and The Islander Estate Vineyards and Springs Road Wines closer to Cygnet River.

Book your stay at Mercure Kangaroo Island Lodge here.