Hotel industry creates tiny pod rooms

Forget a room with a view – or even much room. The latest development in the hotel industry has travelers bunking in tiny, sometimes windowless, quarters.

In London, there’s a new hotel that books rooms by the hour, has an entryway that looks like a spaceship and windows that open into an indoor hallway. In the Netherlands, the new Qbic hotel rents “cubis” the size of a walk-in closet. Opening soon is an Amsterdam hotel made entirely of small, prefabricated pods, built off-site.

Rapidly rising hotel-room rates and growing travel delays are creating a new niche: so-called pod hotels, small spaces where travelers can spend the night – or a few hours – for relatively cheap. The concept has been in Japan for decades but is new in Europe and spreading to the U.S.

These pod hotels are following the lead of low-frills, low-cost airlines. Most don’t have grand lobbies, gyms or meeting rooms, areas that can be considered dead space for generating revenue at a regular hotel. With limited services and amenities, they also save on labor – one of the biggest expenses for hotel operators. There is as few as one full-time employee for every 12 rooms at a pod hotel, compared with an employee for every two rooms at a typical budget hotel.

The growth in pods comes as hotels in crowded cities are running at the fullest rate they have in years. In London, the average hotel room cost around $227 last year, up almost 20 percent from 2006, according to industry tracker Smith Travel Research. And in New York, average room rates are now at a record – nearly $300 a night. But at the Pod Hotel in midtown Manhattan, a standard room with a bunk bed, two flat-panel TVs and a shared bathroom starts at $89 a night.

Can travelers actually get a good night’s sleep in a space a third the size of a college dorm room? To find out, we squeezed into five tiny rooms across Europe and in New York. The good news: Though rooms can measure as small as 65 square feet, they’re slightly roomier than their morgue-style Asian counterparts, where stacked capsules can be as small as 20 square feet – with 3-foot-high ceilings (ceilings in these new-breed pods are usually regular hotel-room height).

Some pods even have touches usually found in pricier boutique hotels like 42-inch plasma TVs, heated bathroom mirrors that don’t fog and Philippe Starck-designed decor. At Heathrow Airport in London, the Yotel has room service with a menu that includes small bottles of Champagne ($32.50) and lamb curry ($17), which can be ordered from an automated menu on the room’s television screen.

Sound-proofing in the pods varied. While trying to nod off at the EasyHotel in Zurich, we couldn’t escape the noise of our amorous neighbors through the thin walls, who kept us up for an hour as we tried to drown them out by watching sports on TV. Another drawback was the bathroom layout, in many cases a small glass-enclosed corner of the room that tended to lack enough privacy for couples traveling together. We sprung for a double room with an optional private bath in New York at the Pod Hotel, but ended up using the roomier shared bathroom down the hall since it offered some seclusion from our partner.

Though these tiny hotels may sound like they’re designed for the backpacker set, some operators insist they aren’t just targeting college kids. They say they’re also aiming for higher-end travelers looking for upscale accommodations at a shrunken size and price. We did find a wide variety of pod mates during our stays, from middle-aged American couples to business travelers to 20-something single Europeans on vacation. And while Yotel rents rooms by the hour, the company says its target market isn’t couples looking for a cheap place to hook up, but weary travelers with short layovers between flights.

Georgia Hinton, a 59-year-old from Corona, Calif., decided to give a pod a try. On a recent trip to Switzerland, she was looking for a place centrally located and booked a room at an EasyHotel in Basel. “It was very affordable, considering everything else is so expensive in Europe,” she says. But she says she was surprised to learn that there was no elevator and there wasn’t much room for luggage. “There’s really no extra anything.”

Capsule-style hotels first took off in crowded Japanese cities like Tokyo in the 1980s, most catering strictly to men. They were popular with hardworking businessmen who’d stayed at the office so late that they missed the last train home. Rooms were typically stacked on top of each other and usually had TVs and music systems inside. Even before the capsules hit the scene, Japan had a reputation for automated, efficient hotel accommodations in the form of “love hotels,” where couples could check in for a couple hours of privacy.

One of the first Western iterations of the pod hotels came when EasyHotel opened in London in 2005, launched by the founder of EasyJet, the low-cost European air carrier. (The company also has a low-cost cruise line, Internet cafes and pizza delivery, among other things.) With windowless rooms as small as 65 square feet designed in the company’s signature bright orange, and rates that started at less than $20 a night at the time, the hotels quickly spread. Room rates have risen, but guests are still charged extra for maid service and use of a remote control for the TV. “We’ve always tried to develop down to the minimum standards,” says Lawrence Alexander, EasyHotel’s chief executive officer. Now there are six EasyHotels across Europe, with a seventh in the works in Luton, England. By the end of next year, another 20 are expected to open in Europe and the Middle East.

Simon Woodroffe was inspired to open pod hotels after flying on a first-class, lie-flat seat on a British Airways flight to Dubai several years ago. “I looked at Japanese pod hotels and said, ‘Nobody’s going to want to sleep in those,'” says Woodroffe, the CEO of the company that owns Yotel, two pod-style properties at London airports. Last year, he opened the Yotel at Gatwick airport with “premium” and “standard cabins,” designed by an airline-cabin architect.

At Yotel, rates range from about $50 for a four-hour nap to $160 for a full stay. It takes less than 30 minutes to clean and ready a room for the next guest, compared with two or three hours at a typical hotel. Daily occupancy runs between 150 percent to 180 percent since rooms can turn over more than once a day, says Woodroffe. This boosts profit margins since a successful hotel averages about 60 percent occupancy. (At New York’s Pod Hotel, occupancy at the 347-room hotel is at 93 percent, compared with the city average of about 85 percent.)

In some dense urban areas or near big airports, developers are simply running out of space to build new budget-style hotels, says Ben Walker, a research manager with TRI Hospitality Consulting, a London-based hotel-industry adviser. With windowless rooms, the pods can be built basically anywhere, which means operators could potentially open them in old office buildings, malls or even underground parking lots – an option Walker says he’s been asked to research. This model won’t work in some countries. In the U.S. and Germany, for instance, windows are legally required in hotel rooms.

Some European-based operators who’ve opened pod-style hotels in the past year or two say they plan to expand stateside soon. But many in the U.S. hotel industry remain skeptical that the trend will spread beyond the novelty. “The question of customer acceptance still needs to be answered,” says Jan Freitag, a vice-president with Smith Travel Research. For business travelers, the idea of being able to get some work done in the privacy of a hotel room is an important selling point, which can be a problem in a small-scale pod. And most vacationers, he says, want to be able to spend some time in their rooms relaxing.

Opening in June at Amsterdam’s Schiphol Airport is the first in another chain of pods called CitizenM. Rob Wagemans, the architect behind it, is also designing luxury hotels like the W in Jordan. The hotel will have high-end touches like Vitra furniture, Frette linens and king-sized beds. Rooms will start at around $108.

The rooms are self-contained capsules, measuring less than 100 square feet. They’re being made and set up entirely off-site at a factory in the countryside of the Netherlands – from the TV installed on the walls to the toilet paper on the roll in the bathroom. Once complete in a couple of weeks, they’ll be moved to the hotel site on a flatbed truck. Another advantage to the prefabricated construction, says Wagemans, is that the hotels can open their doors in less than six months from when they’re conceived, compared with more than 18 months for a typical hotel.

Curiosity is drawing some customers to the hotels. Steve Borgford heard about the pod-style Yotel at London’s Heathrow airport and decided to try it out while on a layover back home from the Middle East a few weeks ago. “I’m the type who tries everything,” says the teacher from the Seattle area, who enjoyed his stay. “I wanted to rest, but I was also just very curious to see what it was like.”

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