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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 market is experiencing significant growth due to several key drivers. Firstly, the increasing disposable income of travelers worldwide has led to a rise in demand for affordable yet comfortable accommodation options. Secondly, the growth of the global travel and tourism industry has resulted in a wave in the number of tourists seeking convenient and affordable hotels and lodging solutions. However, the market is also facing challenges, primarily the negative impacts of the pandemic on the travel industry. Despite these challenges, the market is expected to recover and grow, driven by the aforementioned trends and the continued demand for affordable and convenient accommodation solutions.
The market is poised for growth, with innovations in design and technology enhancing the customer experience and making these compact accommodations an attractive option for budget-conscious travelers.
The market is experiencing significant growth due to the increasing demand for cost-effective lodging options, particularly among Generation Y tourists and office workers. These innovative accommodations offer solo travelers and groups compact, vertical, or horizontal sleeping cabins equipped with essential amenities such as pillows, lockers, alarm clocks, and charging sockets. Common washrooms and shared bathroom facilities further reduce costs. Capsule hotels, also known as pod hotels, have gained popularity in major cities and near train stations due to their convenience. The design varies from wooden to metallic structures, catering to diverse preferences. The market is witnessing the emergence of the second generation of capsule hotels, which offer more spacious and modern facilities.
The market is thriving in the tourism sector, providing simple accommodations for international trips and hourly accommodations for travelers on the go. The market is expected to grow further as more people opt for these accommodations during catastrophes or emergencies, making capsule hotels an essential part of the lodging industry.
The market research 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.
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. 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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The offline booking segment was at USD 49.70 million in 2018 and showed a gradual increase during the forecast period.
APAC is estimated to contribute 41% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
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The market is witnessing significant growth, particularly in the APAC region, which holds the largest market share and is anticipated to expand at the fastest rate. Factors driving this growth include the rising disposable income and changing lifestyle preferences of millennials and Gen Z, who represent a substantial portion of the global middle-class population in Asia. These generations are increasingly seeking affordable and flexible accommodation options, such as pod hotels and sleeping cabins, which offer locker facilities, alarm clocks, charging sockets, and common washrooms. The offline booking segment, including travel agents and airport and railway station kiosks, continues to coexist with the web-based booking trend.
Vendors are leveraging AI, IoT, metasearch engines, and big data analytics to offer personalized experiences and cater to the needs of budget travelers, backpackers, solo adventurers, business travelers, and solo travelers. Urban areas, particularly in countries like Japan, China, and India, are popular solo travel destinations, with many capsule hotels offering breakfast facilities and Wi-Fi connectivity to enhance the guest experience. Overall, the market is expected to thrive on the growing demand for affordable and flexible accommodations catering to various travel segments, including solo and group travelers.
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 the key driver of the market. The global hospitality industry, particularly in emerging economies such as India, China, and Brazil, is experiencing significant growth. Fueled by factors like the expanding middle class and rising disposable income, travelers in these countries are increasingly engaging in exploratory activities. With the millennial population on the rise, there is a growing demand for budget-friendly lodging solutions. Capsule hotels, offering hourly basis accommodation, have emerged as a popular choice among solo travelers, group tourists, and budget-conscious individuals, including office workers and students. These compact, vertical, or horizontal designs come in both wooden and metallic structures, catering to various preferences. Keyless entry systems and smartphone apps provide travelers with flexible booking options and hourly rates, making capsule hotels an attractive alternative for those facing flight delays or long layovers.
The cost-effective nature of capsule accommodations also makes them an appealing option for international trips and local tourism. Despite concerns regarding shared bathrooms and compact design, the benefits of this accommodation segment outweigh the drawbacks. Operators continue to innovate, addressing concerns such as claustrophobia and large luggage, ensuring the continued growth of the market in the tourism sector.
The growth of the global travel and tourism industry is the upcoming trend in the market. The global tourism industry has experienced remarkable expansion in recent decades, with Europe, Southeast Asia, and North America leading the way. Countries like Panama, Costa Rica, Chile, and Argentina are also emerging as competitive players. The United Nations General Assembly declared 2017 as the International Year of Sustainable Tourism for Development, highlighting its economic significance. The tourism sector's growth has led to an increase in capsule hotels worldwide. These hourly basis accommodations cater to various demographics, including solo travelers, groups, and budget-conscious tourists, such as students and office workers. Operators offer flexible booking options through keyless entry systems and smartphone apps.
Capsule hotels provide cost-effective lodging for travelers facing flight delays or long layovers. With compact designs, they are ideal for train stations and cater to the needs of Generation Y and international tourists. Despite their vertical or horizontal layouts, concerns regarding claustrophobia and large luggage remain. The real estate market and hoteliers continue to invest in this niche segment, offering simple accommodations for various travel scenarios, from local tourism to international trips.
Negative impacts of pandemic is a key challenge affecting market growth. The market experienced a significant downturn due to the COVID-19 pandemic from 2020 to 2022. Governments worldwide imposed travel restrictions and lockdowns, resulting in a drastic decrease in domestic and international tourism. In Europe, for instance, domestic tourism plummeted by 93% in April 2020 compared to the previous year, while outbound tourism declined by 67% in 2020. This was largely due to international travel bans and canceled flights, leading to reduced lodging expenses for hoteliers. Capsule hotels, offering hourly basis accommodation, cater primarily to budget-conscious travelers, solo tourists, and office workers. The market comprises vertical and horizontal designs, with options ranging from wooden to metallic structures.
The capsule lodging segment has gained popularity among Generation Y tourists and students due to its cost-effectiveness and flexible booking options. Keyless entry systems and smartphone apps have further enhanced the convenience of these accommodations. However, the compact design of capsule hotels can be a deterrent for travelers with large luggage or those suffering from claustrophobia. The market also faces competition from luxury hotels and lodges, making it essential for operators to offer shared bathroom facilities and hourly rates to attract customers during long layovers, flight delays, and catastrophes. The market is expected to recover as the tourism sector rebounds, with simple accommodations continuing to be in demand for both local and international trips.
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 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 pod hotel market is experiencing significant growth due to the increasing preference for affordable and flexible accommodation options among various traveler segments. Pod hotels, also known as capsule or sleeping cabin hotels, offer compact, individual sleeping spaces equipped with essential amenities such as pillows, lockers, alarm clocks, and charging sockets. Common washroom facilities are shared among guests, keeping costs low. The offline booking segment caters to domestic issues and the needs of budget travelers, backpackers, and solo adventurers. Generation Y and millennials, in particular, are driving demand for pod hotels in urban areas, where personalized experiences and flexible accommodations are prized.
Web-based booking, AI, IoT, metasearch engines, and big data analytics are transforming the industry, making it more accessible and convenient for travelers. Wifi connectivity is a must-have feature, as is the availability of breakfast facilities. The solo segment, including solo travelers, business travelers, and solo travelers, is a key market for pod hotels. Both online and offline booking modes cater to different preferences, with travel agents and airports/railway stations serving as popular booking channels. Flexible accommodations and solo travel destinations are gaining popularity among Generation X, Gen Z, and the group segment. The use of technology and personalized experiences are key differentiators in the pod hotel market.
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 |
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, market forecast, fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, market condition analysis for the forecast period |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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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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