Capsule Hotel Market Size, Share, Analysis, Trends, Growth, 2032

Capsule Hotel Industry Prospective:

The global capsule hotel market size was worth around USD 232.01 million in 2023 and is predicted to grow to around USD 456.11 million by 2032 with a compound annual growth rate (CAGR) of roughly 7.80% between 2024 and 2032.

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Capsule Hotel Market: Overview

A capsule hotel, also known as a pod hotel, is a small bed-sized accommodation facility. Capsule hotels are significantly different from traditional hotels since the primary goal of a pod hotel is to provide a staying facility for a limited time. The concept of capsule hotels first emerged in Japan and since then has taken over other parts of the world. It primarily features drastically smaller rooms as compared to conventional hotels. Capsule accommodation facilities are cheap and highly affordable. The rough size of a capsule hotel room is similar to the size of a bed for one person. It does not provide extensive services such as extra room for standing or movement. The space is just enough for a person to crawl into the bed and sit upright when required. The commonly provided amenities in the pod room are a small television set, electric console, air conditioning, and charging or power sockets. The amenities provided by capsule hotels such as bathrooms and showers are shared among guests mimicking the organization in a typical hostel. The modern population is actively seeking traveling opportunities with limited spending capacity and capsule hotels provide an excellent solution to such customers due to the excellent cost-efficiency offered by pod hotels. However, the capsule hotel industry also has specific limitations restricting the market growth trend.

Key Insights:

• As per the analysis shared by our research analyst, the global capsule hotel market is estimated to grow annually at a CAGR of around 7.80% over the forecast period (2024-2032)
• In terms of revenue, the global capsule hotel market size was valued at around USD 232.01 million in 2023 and is projected to reach USD 456.11 million, by 2032.
• The capsule hotel market is projected to grow at a significant rate due to the growing rate of budget travel among the young generation
• Based on the booking type, the online booking segment is growing at a high rate and will continue to dominate the global market as per industry projection
• Based on the traveler type, the solo segment is anticipated to command the largest market share
• Based on region, Asia-Pacific is projected to dominate the global market during the forecast period

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Capsule Hotel Market: Growth Drivers

Growing rate of budget travel among the young generation is driving the market demand

The global capsule hotel market is expected to grow due to the rising rate of budget-friendly traveling opportunities. The trend is mostly observed in the younger generation. Official statistics indicate that there has been a steady shift in the priorities among the younger population as compared to the older adults. Most people in the younger demographic are highly enthusiastic about traveling and exploring other locations either in the local vicinity or international locations. However, the rising inflation rate across the globe has led to a sharp rise in traveling-related expenses. Accommodation is one of the primary aspects of traveling to a different location. It also typically forms the largest part of overall incurred expenses. However, the younger crowd is more interested in budget-friendly traveling and capsule hotels meet their criterion. These facilities are equipped with basic necessities and cost considerably less in comparison to typical hotels with greater amenities and facilities. According to the latest findings, more than 49% of the American population belong to the ‘casual travelers’ category in which they traveled around more than 1 country.

Promotion through social media platforms may help the market players drive more revenue

Social media-based advertising and promotion have a significant impact on overall revenue for a business. The rising access to consumer electronics as well as affordable internet has allowed more people to register and regularly use popular social media sites such as Instagram, YouTube, and Snapchat. These portals are excellent advertising tools since they help brands and companies reach a broader consumer group and also generate higher product and service awareness among potential users. The companies operating in the global capsule hotel market must invest in leveraging these tools to generate curiosity among customers thus encouraging greater revenue in the coming years.

Capsule Hotel Market: Restraints

Structural limitations of pod hotels will limit the market adoption rate

The global industry for capsule hotels faces several growth limitations. One of the main drawbacks of pod hotels is their structural restrictions. These hotels are not designed for long-term stays and are most optimally utilized by people seeking accommodation solutions for limited days on a budget. After a while, the facilities may become uncomfortable for guests. Furthermore, capsule hotel rooms cannot be shared by multiple people since each room is mostly designed to be used by a single person. Group travelers, especially people with children and older family members may not find capsule hotels appealing.

Capsule Hotel Market: Opportunities

Growing construction of new facilities with improved services may create excellent expansion possibilities

The global capsule hotel market is projected to generate growth opportunities due to the rising construction of new facilities with improved amenities and services. Capsule hotel companies are striving to attract more users by expanding their offerings and catering to the needs of a broader consumer group. In April 2021, Singapore witnessed the soft launch of the KINN Capsule Hotel at South Bridge Road, a heritage-rich area in central Singapore. The inauguration of the new facility was delayed by more than a year due to COVID-19 however, since its opening, KINN Capsule Hotel has been bridging the gap between the quality and privacy of boutique hotels and hostel affordability. Currently, the facility is avoiding leisure bookings due to its communal nature however, it has plans to cater to the needs of guests seeking luxury stays. In April 2024, Japan registered the launch of a new capsule hotel that also has several health benefits. 9h Akasaka Sleep Lab was originally designed to provide sleeping facilities for guests; however, the wellness service brand now also provides sleep analysis services for improved health.

Adopting environmentally friendly practices can help brands generate greater customer enthusiasm

Accommodation centers and facilities tend to generate excessive amounts of waste. However, modern customers are opting for companies that proactively adopt environmentally-friendly practices such as limited use of plastic-based amenities and use of renewable energy for providing power. Capsule hotel service providers must invest in creative ways of incorporating solutions that do not harm the environment including the use of treated wastewater for sanitation purposes. Certain companies operating in the global capsule hotel industry are revamping older buildings into modern accommodation facilities thus providing aesthetically pleasing living space with novel amenities.

Capsule Hotel Market: Challenges

Competition from other forms of affordable stay service providers may challenge the market growth rate

The global capsule hotel industry faces challenges due to the presence of several other forms of affordable accommodation including hostels. These facilities are equipped to handle group travelers and provide excellent services. Moreover, they are also pocket-friendly thus segmenting the potential consumer group for capsule hotels.

Capsule Hotel Market: Segmentation

The global capsule hotel market is segmented based on booking type, generation, traveler type, and region.

Based on the booking type, the global market divisions are offline booking and online booking. In 2023, the highest growth was witnessed in the online booking segment. The internet-based accommodation booking solutions offer excellent advantages. They are more feasible as compared to offline booking since international and domestic travelers can pre-book their stay before arriving at the location without worrying about the lack of available rooms at the last moment. Moreover, online booking websites offer several discounts and other monetary benefits. According to official findings, more than 650 million people booked accommodation using online mode in 2023.

Based on generation, the global capsule hotel industry is divided into generation Z, generation Y, and generation X.

Based on the traveler type, the global market segments are group and solo. In 2023, the highest market share was observed in the solo segment. Capsule hotel rooms generally accommodate one person and hence are ideal for solo travelers who do not wish to splurge on luxury stays. Furthermore, these pods offer excellent opportunities to socialize and network with other people thus attracting a large number of the younger crowd. Market research indicates that 16% of American citizens went on solo traveling trips in 2023.

Capsule Hotel Market: Report Scope

Capsule Hotel Market: Regional Analysis

Asia-Pacific to continue holding the largest market share during the projection period

The global capsule hotel market, during the forecast period, will be dominated by Asia-Pacific. In 2023, the region generated the highest revenue with Japan acting as the largest regional market share holder. The concept of capsule hotels was developed in Japan and the world’s first such facility opened in 1979 and was meant for people who wanted to stay in an affordable yet secure place for some time. Since then, multiple capsule hotels have opened across Japan. The country has been taking massive leaps in terms of offering capsule hotel-based services thus attracting a large number of users. In April 2024, Hello! Renovation, a leading Japanese renovation company with expertise in reconstructing akiya vacant houses, announced a new project through which the company will redevelop 5 unused Nakagin Capsules into pod hotel rooms with breathtaking views. Japanese tourism has been on the rise in the last few years with several international travelers seeking to enjoy Japanese culture. In April 2023, Uzbekistan, a region in central Asia announced the launch of the country’s first capsule hotel to be located in the sterile area of the Tashkent airport.

Capsule Hotel Market: Competitive Analysis

The global capsule hotel market is led by players like:

• Book and Bed Tokyo
• Cabin & Capsule Hotel J-SHIP Osaka Namba
• First Cabin
• Koyasan Guest House Kokuu
• Capsule Hotel Anshin Oyado
• CityHub
• The Millennials
• Space Inn
• The Prime Pod Kyoto
• Nine Hours
• Hotel Zen Tokyo
• Kip Hotel
• Pod Times Square
• YOTELAIR
• Capsule Inn Osaka.

The global capsule hotel market is segmented as follows:

By Booking Type

• Offline Booking
• Online Booking

By Generation

• Generation Z
• Generation Y
• Generation X

By Traveler Type

• Group
• Solo

By Region

• North America
  • The U.S.
  • Canada
• Europe
  • France 
  • The UK
  • Spain
  • Germany
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of Middle East & Africa