Capsule Hotel Market Size, Industry Analysis ReportBy Traveller Type (Solo, Group), By Booking Mode (Online Booking, Offline Booking) & Region – Forecasts

  • 16/08/2022
  • 290
  • Construction & Manufacturing

Global Capsule Hotel Market

Market Overview:

The global Capsule Hotel market was valued at USD 423.51 million in 2022 and expected to grow at a CAGR of 3.4% during the forecast period. A capsule hotel is a type of hotel that originated in Japan and offers guests a minimalist accommodation experience. Instead of traditional hotel rooms, capsule hotels feature small individual pods or capsules that are designed for a single person to sleep in.

Capsule hotels were first developed in Japan in the late 1970s to provide affordable and convenient lodging for businessmen who missed the last train home after work. Today, they have become popular with tourists and budget travelers who are looking for a unique and affordable accommodation option.

Each capsule is typically equipped with a small bed, a television, and a small desk or shelf for personal items. Many capsule hotels also offer shared bathrooms and common areas, such as lounges or restaurants.

Capsule hotels are designed to provide basic amenities and a comfortable sleeping space for guests who only need a place to rest for a short period of time. They are not intended for extended stays or as a substitute for traditional hotel rooms.

While capsule hotels are primarily found in Japan, they have become popular in other parts of the world as well, particularly in areas with high tourist traffic or expensive real estate.


Covid-19 Impact:

The COVID-19 pandemic has had a significant impact on the hospitality industry, including the capsule hotel sector. With travel restrictions and reduced travel demand, many capsule hotels have experienced a decline in business and revenue.

Some capsule hotels have temporarily closed their doors or reduced their capacity to comply with social distancing guidelines and safety protocols. Others have implemented new cleaning and disinfecting procedures to ensure the safety of guests and staff.

Additionally, as capsule hotels typically cater to budget travelers and those seeking short-term stays, the pandemic has also led to a shift in travel preferences. Many travelers are now seeking accommodations with more space, privacy, and amenities, which may not be available in capsule hotels.

Despite these challenges, some capsule hotels have adapted to the new normal by offering long-term stays, workspaces, and other amenities that cater to the changing needs of travelers. As travel restrictions ease and travel demand picks up, it is likely that the capsule hotel sector will continue to evolve and adapt to the new normal.

 Market Dynamics:


Affordability: Capsule hotels are typically more affordable than traditional hotels, making them an attractive option for budget-conscious travelers.

Convenience: Capsule hotels are often located in central locations and offer easy access to transportation, making them a convenient option for travelers who need a place to stay for a short period of time.

Unique experience: Capsule hotels offer a unique and novel experience, particularly for travelers who are looking for something different than a traditional hotel room.

Minimalism: Capsule hotels cater to travelers who value minimalism and simplicity, offering basic amenities and a streamlined accommodation experience.

Technology: Many capsule hotels are equipped with modern technology, such as touch-screen interfaces and smart features, which can enhance the guest experience.

Urbanization: The growth of urbanization and high population density in cities has led to an increase in demand for affordable and convenient accommodation options, such as capsule hotels.

Sustainable tourism: Capsule hotels are often designed with sustainability in mind, utilizing eco-friendly materials and offering energy-efficient amenities, which can appeal to environmentally-conscious travelers.


Lack of space and privacy: Capsule hotels are designed for minimalist accommodation, which means that they may lack space and privacy compared to traditional hotel rooms. This can be a turn-off for travelers who value their personal space.

Limited amenities: Capsule hotels typically offer basic amenities and may not provide the same level of comfort and luxury as traditional hotels. For example, many capsule hotels may not offer room service, fitness centers, or restaurants.

Safety concerns: Capsule hotels may raise safety concerns, particularly for solo travelers who may feel vulnerable in small, enclosed spaces.

Cultural barriers: Capsule hotels are a Japanese concept, and travelers from other cultures may not be familiar with the concept or find it unusual or uncomfortable.

Health and hygiene concerns: With the COVID-19 pandemic, health and hygiene concerns have become a significant issue for the hospitality industry, including capsule hotels. Guests may be hesitant to stay in shared spaces and use shared facilities.

Noise and discomfort: Due to the close proximity of capsules, noise and discomfort can be an issue, particularly for light sleepers or those with claustrophobia.

Regulatory issues: Some cities may have regulatory issues with the operation of capsule hotels, particularly around fire and safety codes, zoning regulations, and building codes.

Segment Analysis:

Solo travelers: Capsule hotels are an ideal option for solo travelers who are looking for affordable and convenient accommodation options. Capsule hotels offer a minimalist and streamlined experience, making them an attractive option for solo travelers who are comfortable with a smaller space and shared facilities.

Business travelers: Capsule hotels are often located near major transportation hubs and business districts, making them a convenient option for business travelers who need a place to stay for a short period of time. Capsule hotels may offer amenities like Wi-Fi and workspaces, making them ideal for business travelers who need to work while on the go.

Budget-conscious travelers: Capsule hotels are an affordable option for budget-conscious travelers who are looking for a place to stay that won't break the bank. Capsule hotels may offer basic amenities like Wi-Fi, lockers, and shared bathrooms, making them an attractive option for travelers who are willing to trade luxury for affordability.

Group travelers: While capsule hotels are often associated with solo travelers, some capsule hotels offer larger capsules that can accommodate groups. These larger capsules may offer more space and privacy than traditional capsules, making them an attractive option for groups who are looking for affordable and convenient accommodation options.

Overall, capsule hotels are a versatile option that can cater to a variety of traveler types, including solo travelers, business travelers, budget-conscious travelers, and groups. Capsule hotels offer a unique and minimalist experience that is particularly appealing to travelers who value affordability, convenience, and a streamlined accommodation experience.


Regional Analysis:

Capsule hotels are most popular in Japan, where they originated in the late 1970s. In Japan, capsule hotels are often located near major transportation hubs, such as train stations and airports, and cater to business travelers and budget-conscious tourists.

However, the popularity of capsule hotels is growing in other parts of the world as well. In recent years, capsule hotels have become popular in urban areas with high real estate prices and high demand for affordable accommodations. Some of the countries where capsule hotels are becoming increasingly popular include:

China: In major cities like Beijing, Shanghai, and Hong Kong, capsule hotels are becoming popular among budget-conscious travelers and millennials who are looking for unique and affordable accommodation options.

Singapore: With its high cost of living and expensive real estate, Singapore has seen the growth of capsule hotels, particularly in the central business district.

South Korea: Capsule hotels are popular in South Korea, particularly in Seoul, where they are often located near popular tourist attractions and transportation hubs.

United States: Capsule hotels are still relatively new in the United States, but they are gaining popularity in major cities like New York, San Francisco, and Los Angeles, where real estate prices are high and demand for affordable accommodations is strong.

Europe: Capsule hotels are becoming popular in major European cities like London, Paris, and Amsterdam, where travelers are looking for affordable and convenient accommodation options.

Overall, while capsule hotels are still most popular in Japan, they are becoming increasingly popular in other parts of the world, particularly in urban areas with high demand for affordable and convenient accommodations.

Region Segment

Competitive Landscape:

The global Capsule Hotel market is highly competitive and fragmented with the presence of several players. These companies are constantly focusing on new product development, partnerships, collaborations, and mergers and acquisitions to maintain their market position and expand their geographical presence. Some of the key players operating in the market are:


·         First Cabin HD CO., LTD.

·         Hipstercity

·         Book And Bed Tokyo

·         URBANPOD

·         CubeHotelsGroup

·         Riccarton Capsule Hotel.


·         The Bed KLCC.

·         Pangea pod hotel

·         Nonze Hostel Pattaya

·         Dream Lodge Singapore


·         THE POD SYDNEY

·         Anshin Oyado

·         Bloc Birmingham.

·         Tubohotel

·         Koyasan Guesthouse Kokuu

·         Time Capsule Retreat

·         De Bedstee Hotel

·         Others


By Traveller Type

·         Solo

·         Group

By Booking Mode

·         Online

·         Offline

By Age Group

·         Generation X

·         Generation Y

·         Generation Z

By Application

·         Tourists

·         Office Workers

·         Others

By Geography

·         North America

o   U.S.

o   Canada

o   Mexico

·         Europe

o   U.K.

o   Germany

o   France

o   Italy

o   Spain

o   Russia

·         Asia-Pacific

o   Japan

o   China

o   India

o   Australia

o   South Korea


o   Rest of APAC

·         South America

o   Brazil

o   Argentina

o   Colombia

o   Rest of South America

·         MEA

o   South Africa

o   Saudi Arabia

o   UAE

o   Egypt

o   Rest of MEA

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Case Study- Automotive Sector

One of the key manufacturers of automotive had plans to invest in electric utility vehicles. The electric cars and associated markets being a of evolving nature, the automotive client approached We Market Research for a detailed insight on the market forecasts. The client specifically asked for competitive analysis, regulatory framework, regional prospects studied under the influence of drivers, challenges, opportunities, and pricing in terms of revenue and sales (million units).


The overall study was executed in three stages, intending to help the client meet its objective of precisely understanding the entire market before deciding on an investment. At first, secondary research was conducted considering political, economic, social, and technological parameters to get a gist of the various aspects of the market. This stage of the study concluded with the derivation of drivers, opportunities, and challenges. It also laid substantial emphasis on understanding and collecting data not only on a global scale but also on the regional and country levels. Data Extraction through Primary Research

The second stage involved primary research in which several market players and automotive parts suppliers were contacted to study their viewpoint concerning the development of their market and production capacity, clientele, and product line. This stage concluded in a brief understanding of the competitive ecosystem and also glanced through the strategies and pricing of the companies profiled.

Market Estimates and Forecast

In the final stage of the study, market forecasts for the electric utility were derived using multiple market engineering approaches. This data helped the client to get an overview of the market and accelerate the process of investment.

Case Study- ICT Sector

Business process outsourcing, being one of the lucrative markets from both supply- and demand- side, has appealed to various companies. One of the prominent corporations based out of Japan approached us with their requirements regarding the scope of the procurement outsourcing market for around 50 countries. Additionally, the client also sought key players operating in the market and their revenue breakdown in terms of region and application.

Business Solution

An exhaustive market study was conducted based on primary and secondary research that involved factors such as labor costs in various countries, skilled and technical labors, manufacturing scenario, and their respective contributions in the global GDP. A comparative study of the market was conducted from both supply- and demand side, with the supply-side comprising of notable companies, such as GEP, Accenture, and others, that provide these services. On the other hand, large manufacturing companies from them demand-side were considered that opt for these services.


The report aided the client in understanding the market trends, including country-level business scenarios, consumer behavior, and trends in 50 countries. The report also provided financial insights of crucial players and detailed market estimations and forecasts till 2033.


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