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The capsule hotel market size is forecast to increase by USD 50.3 million, at a CAGR of 10.03% between 2023 and 2028. The growth of the travel and tourism market relies on several key factors. Firstly, the increasing disposable income among travelers worldwide is fueling demand for diverse travel experiences and accommodations. This trend supports the growth of both luxury and budget travel segments. Secondly, various government initiatives aimed at promoting tourism, such as infrastructure development, marketing campaigns, and visa facilitation programs, contribute significantly to expanding tourist arrivals and expenditures. These initiatives create a favorable environment for tourism-related businesses to thrive. Thirdly, there is a growing need for inexpensive accommodation options, driven by budget-conscious travelers seeking affordability without compromising quality. This demand encourages the development of budget hotels, hostels, and alternative lodging solutions, further stimulating market growth. Collectively, these factors underscore a positive outlook for the global travel and tourism industry in the coming years.
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The market refers to the provision of compact, affordable lodging accommodations, also known as pod hotels or sleeping cabins. These unique accommodations offer travelers and office workers simple, cost-effective solutions, often featuring individual sleeping capsules equipped with essentials like pillows, lockers, alarm clocks, and charging sockets. Capsule hotels cater to both solo and group travelers, with designs ranging from vertical and horizontal arrangements to wooden and metallic structures. Popular among Generation Y and tourists, capsule hotels are increasingly common near train stations and in tourist areas. The market has gained traction in the tourism sector due to its affordability and convenience. Common washrooms are shared among guests, keeping costs low. Hourly accommodations make capsule hotels an attractive option for travelers with tight schedules or during international trips. Despite the shared facilities, capsule hotels offer a sense of privacy and security. In the event of catastrophes or emergencies, capsule hotels can provide a safe and convenient shelter. Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The growing disposable income of travelers is notably driving market growth. In developing economies like India, China, and Brazil, the hospitality and tourism sector are experiencing significant growth. This industry plays a pivotal role in boosting the economy of these nations, fueled by the expanding middle class and increased disposable income among travelers. The younger generation, particularly in these countries, is increasingly seeking affordable travel opportunities, leading to the rise of budget-conscious lodging options. Capsule hotels cater to this segment, offering hourly basis accommodation for solo and group travelers. These compact, vertical or horizontal structures come in wooden or metallic designs, appealing to both budget-conscious tourists and office workers. Keyless entry systems, smartphone apps, and flexible booking options add to the convenience of these accommodations. Capsule hotels are particularly popular near train stations, airports, and other transportation hubs due to their proximity and cost-effectiveness. Long layovers, flight delays, and local tourism are other factors driving the demand for hourly accommodations. Despite their compact design, capsule hotels provide shared bathroom facilities, ensuring travelers' basic needs are met. The global capsule hotel market is poised for growth during the forecast period, with operators capitalizing on the trend towards simple, cost-effective lodging solutions for both international and local travelers. Thus, such factors are driving the growth of the market during the forecast period.
The growth of the global travel and tourism industry is the key trend in the market. The global tourism industry has experienced remarkable expansion, particularly in Europe, Southeast Asia, and North America. Countries like Panama, Costa Rica, Chile, and Argentina in South America are also gaining prominence in this sector. The United Nations General Assembly declared 2017 as the International Year of Sustainable Tourism for Development, highlighting its economic significance. In response to this growth, the number of capsule hotels has increased worldwide. These hotels offer hourly basis accommodation, catering to various demographics, including solo travelers, groups, and budget-conscious tourists, such as students and office workers. The compact design of capsule hotels is ideal for travelers with flight delays or long layovers, as well as for those in need of cost-effective lodging near train stations. Capsule hotels come in vertical and horizontal structures, with options ranging from wooden to metallic designs. Operators provide keyless entry systems and smartphone apps for flexible booking options, making the experience convenient for guests. Despite their small size, shared bathroom facilities ensure travelers' comfort, making capsule hotels a popular choice for the accommodation segment. This trend is not only beneficial for travelers but also for the real estate industry and hoteliers, offering a cost-effective solution for lodging expenses. However, concerns regarding claustrophobia and limited space for large luggage may deter some potential guests. Nonetheless, capsule hotels remain a significant contribution to the tourism sector, providing simple accommodations for international trips and the local tourism industry. Thus, such trends will shape the growth of the market during the forecast period.
The negative impacts of the pandemic are the major challenge that affects the growth of the market. The capsule hotel market experienced a significant downturn due to the COVID-19 pandemic from 2020 to 2022. Governments worldwide imposed travel restrictions and lockdowns to contain the virus spread, resulting in a decrease in domestic and international tourism. In Europe, for instance, domestic tourism dropped by 93% in April 2020 compared to the previous year, while outbound tourism declined by 67% in 2020. This was due to travel bans and flight cancellations, leading to reduced lodging expenses for both tourists and business travelers, including budget-conscious students and office workers. The capsule hotel market caters to various segments, including solo and group travelers, with options for vertical and horizontal capsule designs made of wooden or metallic materials. This type of accommodation is popular among Generation Y tourists, particularly for hourly basis stays, making it an attractive option for travelers facing flight delays or long layovers. However, the compact design may not be suitable for those with large luggage or those experiencing claustrophobia. Operators in the lodging industry have responded to the changing market dynamics by offering keyless entry systems, smartphone apps, and flexible booking options with hourly rates. This cost-effective accommodation segment has gained popularity near train stations and in the tourism sector, providing simple accommodations for international trips and local tourism industry needs. Despite the challenges posed by the pandemic, the capsule hotel market is expected to recover as travel restrictions ease and tourists resume their travels. Hence, the above factors will impede the growth of the market during the forecast period.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Book and Bed Tokyo - The company operates a capsule hotel with concept rooms designed for book lovers.
The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The offline booking segment is estimated to witness significant growth during the forecast period. Capsule hotels offer hourly basis accommodation for solo travelers and groups, providing a cost-effective lodging solution for budget-conscious tourists and office workers. These vertical and horizontal structures come in both wooden and metallic designs, catering to the preferences of Generation Y travelers. Operators in the lodging industry have capitalized on the demand for flexible booking options, keyless entry systems, and smartphone apps, allowing travelers to easily reserve hourly rates for shared bathroom facilities. Capsule hotels are particularly popular among tourists facing flight delays or long layovers, as well as students on international trips.
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The offline booking segment accounted for USD 49.70 million in 2018. The compact design of these simple accommodations allows for efficient use of real estate, making them an attractive option for the tourism sector. However, some travelers may find the claustrophobic nature of these small spaces a deterrent. Despite this, the budget accommodation segment continues to thrive, with operators offering hourly accommodations near train stations and other transportation hubs to cater to the needs of the traveling public.
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APAC is estimated to contribute 41% to the growth of the global market during the market forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
The market is witnessing significant growth, particularly in the Asia Pacific (APAC) region. Pod hotels, also known as sleeping cabins, have gained popularity among budget travelers, backpackers, solo adventurers, business travelers, and millennials. These accommodations offer locker facilities, alarm clocks, charging sockets, and common washroom areas. The offline booking segment, catering to the domestic issues and preferences of some travelers, continues to coexist with the web-based booking trend. APAC holds the largest share in this market and is anticipated to grow at the fastest rate during the forecast period. This growth can be attributed to the increasing spending on travel activities by the millennial generation, the rising demand for affordable accommodations, and the presence of major players in countries like Japan, China, and India. The economic development in APAC has led to an increase in the middle-class population, with more than three-quarter of the global middle-class growth expected to originate from Asian countries such as India and China by 2030.
The market report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD million " for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
Travelers Capsule hotels, also known as pod hotels or sleeping cabins, offer a unique and affordable accommodation experience for solo travelers, backpackers, and budget travelers. These compact spaces, equipped with a pillow, alarm clock, charging socket, and locker facility, have gained popularity among the Generation Y, Millennials, and Gen Z segments. Common washrooms and offline booking segments cater to domestic issues and travelers who prefer a more traditional booking method. However, the trend is shifting towards web-based booking, AI, IoT, and metasearch engines for a more convenient and personalized experience. Urban areas, solo travel destinations, and transportation hubs like airports and railway stations are prime locations for capsule hotels. Flexible accommodations, WiFi connectivity, and breakfast facilities add to the appeal of these compact yet functional spaces. Booking modes vary from online to offline, with travel agents also offering capsule hotel packages. The capsule hotel market is expected to grow as more solo travelers, solo adventurers, business travelers, and budget travelers seek affordable and convenient accommodation options. Big data analytics and AI technologies are also being integrated to enhance the customer experience and provide personalized services.
Market Scope |
|
Report Coverage |
Details |
Page number |
129 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 10.03% |
Market growth 2024-2028 |
USD 50.3 million |
Market structure |
USD Fragmented |
YoY growth 2023-2024(%) |
8.89 |
Regional analysis |
APAC, North America, Europe, South America, and Middle East and Africa |
Performing market contribution |
APAC at 41% |
Key countries |
China, US, Germany, Japan, and UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Book and Bed Tokyo, Container Hotel Group, De Bedstee Capsules Hotel B.V., Dream Lodge, First Cabin HD Co. Ltd., Hostels Hub Point S.L., Inbox Capsule Hotel, Koyasan guesthouse Kokuu, Nadeshiko Hotel, Nonze Hostel, Pangea Pod Hotel, RB Hospitality Pte Ltd., Riccarton Capsule Hotel, TAKE Hostel Conil, The Bed KLCC, The Capsule Hotel, The Pod Sydney, Time Capsule Retreat, Tubohotel, and Urban Pod Pvt. Ltd. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, Market growth and Forecasting, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Mode of Booking
7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Opportunity/Restraints
10 Competitive Landscape
11 Competitive Analysis
12 Appendix
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