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It&#;s no secret that we have Japan to thank for its contributions to the world. Be it automobile, electronics, machinery, metal, chemicals, or textiles. And yes, Pokémon!
But apart from all these, Japan has also gifted something innovative to the world of hospitality. And today we are going to talk about one such innovation.
*Drum rolls*
Capsule Hotels (also known as Pod hotels) !!!
I have never stayed in a pod hotel but ever since I have seen it on the internet and read about the rise of capsule hotels, I am fascinated.
It&#;s one of the coolest innovations that has happened to the hotel industry. So, out of curiosity, I have done my research and I want to share how to start a capsule hotel through this blog.
Capsule hotel is one of Japan&#;s best known and unique types of lodging. It is a hotel that features many small bed-sized rooms known as capsules, or in some cases just one bed in a tube.
But do you know about the inception of this quirky hotel? Yes? No?
Never mind! Let&#;s travel back in time and look at the origin of this hotel.
Pod hotelThe first capsule hotel was opened in in the city of Osaka in the Kansai region of Japan. And it was designed by leading Japanese architect Kisho Kurokawa.
Capsule INN Osaka (Image Source: Agoda)But what is more interesting is the story behind the need for such a quirky accommodation.
When I was looking at the capsule hotel history, I surfed a lot on the internet. And many resources were directed to one story. Let me share that with you.
There was a time when salarymen in Japan would often visit the Izakayas (a type of informal Japanese bar) for Nomikai (literally means gathering to drink) after working for hours.
What&#;s the aftermath? They would either take a nap on the doorstep of a building or catch the last metro train.
This is where capsule hotels came into the scenario.
Capsule hotel provided tipsy Japanese working men a place to rest and get started the next day. And it was for the same price they would pay for train rides.
But today, they are witnessing a completely new wave of popularity which is not limited to Japan.
Capsule hotels are PROFITABLE without a doubt!
There&#;s a spike in the number of backpackers and business travellers, over the last few years. And these travellers are now choosing capsule hotels, going beyond the cliché.
And why not, pods hotels are inexpensive yet offer a fantastic experience.
According to a report, in , Booking.com noticed an increase in the number of capsule hotels listed on their platform. That&#;s not all. They have also seen the number of bookings at capsule hotels increasing YOY.
These were definitely signs that there&#;s more coming. And currently, we all are witnessing the popularity of these hotels that is only increasing.
I remember talking to one of my friends who stayed in a pod hotel. He said, &#;It was a great experience. I had no complaints sleeping in that 2-meters long and a little over 1-meter high capsule-sized room. If I am getting a comfortable place to rest with every essential amenity, that too at a budget, why would I go for any traditional hotel?&#;
And it&#;s not just my friend, there are thousands of travellers who always prefer pod hotels over the traditional ones.
According to another report, the capsule hotels&#; industry is projected to register a 6.2% CAGR in terms of revenue, over the coming few years. Meaning, the global market size will reach $223.9 million by .
People nowadays are travelling keeping their expenses low. And this is where capsule and pod hotels come into the frame.
If you are thinking about opening a capsule hotel, here are some things to keep in mind.
Whether it&#;s in terms of business, services, or offerings, capsule hotels are different from traditional hotels.
It is important that you must understand the capsule hotel business plan or model and how it works. Here are some aspects to learn about:
For example: Some pods have an in-house restaurant while some prefer to offer a common kitchen.
However, there are no predefined rules, it all depends on the size of the hotel.
You have to have a proper plan on how you&#;re going to set up the entire hotel (basically, a roadmap). Let us look at some questions you must consider.
To start a capsule hotel, you need a strong capital. Not to mention, there&#;s a bitter truth &#; It&#;s a risky move! If you fail to scale your hotel, then you might end up facing losses. So, a strategic approach is always recommended.
Once you have the capital, you need to divide them for different segments of your hotel. This will help you use your hard-earned money appropriately.
If you find it overwhelming or you don&#;t know how to get started, there are many professionals and agencies who can help you.
You have to figure out how many pods/beds you can or want to offer. It could be single-bed pods or double-bed pods. It&#;s upon you and your business model.
This is one of the most important aspects because when you hire staff, you have to be accurate with the number of staff you need. It shouldn&#;t be less to overburden others and shouldn&#;t be more to go out of your budget or capability.
On top of that, you have to invest enough time and money in training your new recruits. You need to have clear standard operating procedures (SOPs) for your staff to perform their tasks across departments.
When you&#;re planning your roadmap, you also have to decide on the tariff you&#;re going to set for each pod or bed.
I know, the number won&#;t be accurate but at least it&#;s better than shooting blindly. With an approximate pricing, you&#;ll be able to accurately plan for other segments and also forecast your ROI.
Do you want your hotel to be a generic capsule hotel or do you want to top it up with a little more luxury? If so, you can invest in amenities and services.
I would suggest you do this after performing an in-depth study of your competitors and your target audience for improved decision making.
Outsourcing is believed to make a business more flexible to change. However, businesses must know whether they need to outsource anything. Further, they need to analyse whether in-house is inexpensive and efficient.
So, make sure, you&#;re not betting on outsourcing services or commodities aggressively. Because it might shake your budget.
If you want to make an informed decision, I recommend you going through our hotel budgeting blog.
Without an inch of doubt, the location of your hotel is critical to its long-term success. You have to ensure that the location aligns perfectly with the preferences of the guests you are catering to.
But how do you choose the right location? Here are some points to consider:
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Remember I mentioned about dividing the capital for different aspects? Location is one of those aspects.
Before you go about looking for the right location, you must keep your budget in mind. And then start searching accordingly.
When you look for the right location, you can either pick a plot and construct your hotel. Or, you can buy or lease a plug-and-play building (the ones that are ready for immediate occupation) and tweak it as per your requirements.
Considering the type of guests, your capsule hotel must not be far away from the establishments like airports, railway stations, tourist sites etc.
Business travellers, especially, look for accommodation near the airport. They want a comfortable place to relax after a tiring flight or whole day of meetings. So, a pod hotel that offers a great experience at a lesser price and is located near the airport is going to reap the benefits.
Also, there are times when guests want to step out and explore. So, try finding a location that is close to other business services like restaurants, malls etc.
It is also important to evaluate your competitors to improve your business strategies.
And the same goes for capsule hotels. You have to keep a keen eye on other players in your domain to have a clear picture of what you are up against.
Here are some things to consider:
I am sure, when you came up with the idea of starting a capsule hotel, you must have had a picture in mind. I would suggest putting that image or idea onto the drawing board.
Or, if you want to look for more ideas on how to design your hotel, you are just one Google search away.
#ProTip: Pinterest is an amazing platform to find ideas. Search for &#;capsule hotel&#;, and it will show hundreds of results. Pick the one that best suits your vision.
Capsule hotels in PinterestWhen you decide on the idea of your pod hotel, make sure you hire the right architect. Meaning, someone with an experience of working with hotels or similar establishments.
Explain the architect your idea about the property and let him/her take care of the rest.
If you&#;re wondering about the fees, then it varies widely. It depends on the project, the local economy, the architect&#;s experience and reputation, and several other factors.
Well, the job is not done yet. Once the architect is done designing the hotel, it&#;s time to hire a contractor to build it.
You don&#;t want pods that make your guests feel suffocated. So, you must get the pods that can accommodate everything you want to.
There are many third-party vendors who provide these pods. You can also get them custom-built according to your requirements.
When you&#;re building the hotel, you must remember, most people prefer capsules for budget constraints or short term stays. So, instead of the luxury quotient, focus on the experience.
#ProTip: Give it a theme such as Sci-fi. Make your hotel look futuristic. And if you&#;re smart enough, you can do it just by using lights.
You must have seen hotels with different suites. You can apply the same concept here as well.
For example: You can categorise the pods as bronze, silver, and gold. And allot the amenities or features to each of them according to their category.
However, make sure you don&#;t include more high-end pods as it will increase the tariff and people might hesitate to opt-in.
I have seen many hotels that have invested in amenities that are hardly utilised.
I once visited a property in Delhi for a technology conference. At first, I was really impressed by the ambience and all the amenities. But then a vending machine caught my attention. It was filled with items, but the machine wasn&#;t working. When I inquired, a staff member said it has been like this for months.
And to my surprise, there were more than 3 such machines.
It was a complete unnecessary investment, I felt. Because, even the working ones were not being used by any guest.
Only incorporate vital amenities, not the ones you think will be necessary for the future.
The rule is simple. You&#;re a new capsule hotel and with time, you&#;re going to improve. So, for the time being, stick to the essentials. In future, if you feel you&#;re lacking a certain offering, then you can always add (of course depending on your budget and demand).
Setting the right room pricing is important for your hotel business to grow. You have to play this game strategically. But considering the factors it involves, hoteliers tend to get overwhelmed.
This is where revenue management software or professionals come into the picture. I would highly recommend working closely with such service providers. They will make your hotel management easy.
In case you don&#;t know how to choose the right revenue management service, we have a detailed blog on it.
Marketing is critical for hotel businesses. From offline to online marketing, you have to do it the right way.
Here are some of the activities you must consider:
Resources:
#ProTip: Many hoteliers have a perception that marketing starts when their hotel starts. That&#;s not true. Launch your marketing activities even when your hotel is still under construction. It is important to build hype and excite the audience.
Technology today has transformed the entire hospitality segment. Hotels all around the world are betting big on technology. So, it is important for new players to keep abreast of all the latest tech infusions in the industry.
Here are some of the significant (you can also call them &#;must-have&#;) tech for hotels:
If you have these systems in place, you&#;re already one step closer to succeeding with your capsule hotel.
Anything that gets you booking is your friend. So make sure, your new capsule hotel is listed on all OTAs, meta search engines, and even on Google free booking links.
I am sure you already know about OTAs and meta search engines. But Google FBL is quite new, so I will give you an overview.
Google Free Hotel Booking Links (FBL) allow hotels to display their direct booking rates and availability on Google Hotel (Meta) Search and Google Maps. For Free! People can compare a hotel&#;s rates across various platforms, and book their stay directly with the hotel of their choice.
#ProTip: Google right now is extensively helping hotels make the most out of this program. Ensure that your hotel is listed on it.
#ProTip: While you partner with Google, OTAs, Metasearch engines, don&#;t forget about the offline agents. They are still in the game and play a vital role.
Now that you have learned all about the capsule hotel business, there&#;s one thing I would like to address &#; Do you really want to start a hotel?
I don&#;t want to demotivate you by addressing this. But as a blogger from this domain, I feel it is my responsibility to let you all know about all factors.
Starting a hotel involves risks. You have to be confident and prepared for it. You put in a lot of money and if things go wrong, you might end up incurring severe loss. So, think peacefully before stepping into the arena.
Word to the wise: Take insurance into consideration, as it can allow you to manage the numerous risks involved in launching your capsule hotel business and serving your customers.
Call it a pod hotel or a capsule hotel, it is gaining tremendous traction. It&#;s not just the new hotels, but even the old traditional hotels are transforming some sections of the hotel into capsules.
If you have been thinking about starting your own capsule hotel, it is most probably the right time to get your hand on it.
I have tried to cover as many points as possible to make the blog informative. And I hope it helps you.
Let me know in the comments if I have missed out on anything or if you want to know about anything else. I will definitely try to address them.
Happy Hoteliering!
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