Launched in Osaka in 1979 to enable local businessmen enjoy an evening out, capsule hotels are now mainly aimed at international travelers. Growing numbers of these hotels have opened in recent years across Asia and into Europe and the Americas to cater for the rise in single travelers looking for low-priced rooms for one which equally offer opportunities to socialize with others in shared leisure facilities.

“Capsule hotels offer budget tourists and backpackers a cheaper and more alternative to conventional hotels and hostels in “expensive” city locations such as Singapore,” says Frank Sorgiovanni, Senior Vice President with JLL’s Hotels & Hospitality Group.

The city state has seen more than 10 such hotels launch since 2012 with more in the pipeline. Australia opened its first capsule hotel in 2017 in Sydney, Australia’s most expensive city pitched at the solo traveler that might have outgrown the backpacker hostel. But, rather than competing solely on cost, the hotel is being designed to have a boutique design hotel feel.

The spartan, single-sex traditional model will not work for everyone – and many operators are creating niches as they adapt the formula to their local and international markets and to the prospect of increasing competition. Hanoi’s Noi Bai International Airport, for instance, now has double pods at Terminal T2, for instance; a free laundry service is provided at Bali’s M Boutique Hostel.

Yotel, with its ensuite facilities, luxury bedding and sound-proofing is a leader in the more luxurious end while South America’s first capsule hotel, the $12-a-day Capacete in Rio de Janeiro is hoping to draw “artists and thinkers” through Wednesday evening talks, a bookshop and ambience.

In Japan, capsule hotels have also become more than just places to sleep. The Anshin Oyado in Tokyo has a bar with craft beers as well as an artificial hot spring and mist sauna. The female-only Nadeshiko, also in the Japanese capital, provides guests with a free kimono during their stay. Terada says: “They typically have a guest lounge and host regular social events to facilitate communication among guests. They are selling “experience” rather than physical accommodation facilities.” Staff tend to be more “casual and friendly” than in traditional hotels, he adds.