Global Capsule Hotel Market to Have Lucrative Opportunities in the Future with the Rising Demand for Pocket-Friendly Accommodations

Originally well-known in Japan since 1970s, the miniature pocket-friendly sleep cubicles, known as ‘capsule hotels or pod hotels’, have begun to develop in several localities across the globe. Currently, the demand for no-frills guest experience is skyrocketing and its trend is evolving like never before.

The Growing Trend for Capsule Accommodations

With customers keenly on the lookout for a budget-friendly accommodation, capsule hotels and hostels are becoming an ever more preferred choice. As travellers usually be in a town for merely one night and spend a very short time span in the hotel rooms other than to sleep, they might be hesitant to expend huge amounts for a large hotel room when a tiny, more economical option is accessible. Even though rather small and basic, a capsule hotel can offer customers with all the basics in a compact environment.

Capsule hotels are a budget-friendly option for customers. Nowadays, hotels are getting converted into capsule hotels owing to financial issues and space scarcity. Adoption of capsule hotel idea enables hotels to fit in more customers in a small space.

Already prevalent in the South East Asian countries since nearly 30 years, pod hotels are now emerging into leading cities of Europe. These type of hotels are anticipated to grow profoundly in the upcoming decades as developers are attempting to offer more in small spaces. Current estimates of a report by Research Dive divulges that the global capsule hotel market is foreseen to hit $211.7 million in the 2021–2028 timeframe. The emerging trend for experiential travel among millennial seems to be pushing the envelope for capsule hotels further by developing lucrative opportunities in the years to come.

Individuals, especially the one belonging to young age groups, are interested in travel and tourism much more than earlier years. Capsule hotels are a competent answer to their needs while exploring different locations on a budget without compromising on privacy, comfort, with a unique experience that is worth cherishing. Conversely, for hotel designers, the concept of capsule hotels has opened doors to an extremely efficient usage of space particularly in main gateway cities, in which real estate is extremely costly.

Recent Trends in the Capsule Hotel Arena

Some of the leading players active in the capsule hotel market are FIRST CABIN HD CO., LTD., THE CAPSULE HOTEL, Urbanpod Hotel, The Bed KLCC., Riccarton Capsule Hotel, Pangea pod hotel, THE POD SYDNEY, Book and Bed Tokyo, Nonze Hostel Pattaya, InBox Capsule Hotel, Dream Lodge, Lavender, Singapore, and others. Market players are concentrating on emerging strategies such as partnerships, product development, mergers and acquisitions, and collaborations to achieve a foremost position in the global market. For instance,

• In April 2019, Urbanpod, a hotel that offers accommodation, launched the first ever Pod Hotel in India in Mumbai in Andheri’s SEEPZ area, with around 140 capsule units. Also, the hotel has an exclusive women-only pods for single women travellers.
• In January 2020, the Mumbai Central railway station announced about its plan to launch its first capsule hotel by December 2020. It announced that it is going to develop ultra-modern, capsule-like, and very tiny rooms intended for one person to sleep.
• In September 2021, Louvre Hotels Group, a major player in the worldwide hotel industry, introduced - Hosho, a new capsule hostel brand focused on offering accommodation for families and groups.

COVID-19 Impact on the Capsule Hotel Industry

The unexpected outburst of the coronavirus pandemic has severely hit the global capsule hotel industry. Owing to the implementation lockdowns in various parts of the world and fear of the spread deadly COVID-19 infection, numerous nations imposed ban on travel, thus deteriorating the growth of the capsule hotel industry. Also, the adoption of work-from-home working model by numerous companies and restrictions on business trips to curb the spread of virus have massively affected the entire hotel industry. However, as and when the pandemic relaxes and the travel and tourism sector resumes functioning, the demand for budget-friendly accommodations is expected to augment, thus intensifying the market growth remarkably.