According to the report, the Global Capsule Hotel Market is expected to generate a revenue of $211.7 million by 2028, exponentially growing at a CAGR of 6.0% during the forecast period 2021-2028.

A capsule hotel, also known in the Western world as a pod hotel, is a type of hotel developed in Japan that features many small bed-sized rooms known as capsules. Capsule hotels provide cheap, basic overnight accommodation for guests who do not require or who cannot afford larger, more expensive rooms offered by more conventional hotels.

The first capsule hotel in the world opened in 1979 and was the Capsule Inn Osaka, located in the Umeda district of Osaka, Japan and designed by Kisho Kurokawa.

Dynamics of the Market 

Increase in the number of solo travels by people and availability of affordable hotels are expected to drive the growth of the market. In addition, rising number of middleclass people and their expenditure on numerous leisure activities including travel and tourism is further expected to bolster the growth of the capsule hotel market during the forecast period. Moreover, increase in adventure and travel expeditions among millennials across the globe is expected to create immense opportunities for the growth of the market during the forecast period. However, growing presence of budget-friendly hotels across the globe is expected to hinder the growth of the capsule hotel market during the forecast period.

Segments of the Market

The report has divided the market into various segments based on traveler type, booking mode, age group and region.

• By traveler type, the solo sub-segment is expected to be most profitable, and generate a revenue of $177.4 million during the forecast period. In solo traveler’s expedition to new places, they prefer an economical accommodation that has all the basic features they require. This factor is expected to stimulate the growth of the capsule hotel sub-segment during the forecast period.
• By booking mode, the offline mode sub-segment is predicted to be most beneficial, and generate a revenue of $164.7 million during the forecast period. Online booking modes are exceedingly seamless and less time-consuming. This factor is expected to bolster the growth of the sub-segment during the forecast period.
• By age group, the generation Z sub-segment is expected to be most lucrative, and generate a revenue of $69.9 million during the forecast period. Increasing prevalence of solo travelling among millennials to explore new places and culture is expected to drive the growth of the capsule hotel sub-segment during the forecast period.
• By region, the Asia-Pacific market is expected to dominate the market, and generate a revenue of $179.1 million during the forecast period. Massive population in this region is expected to stimulate the growth of the market. In addition, rising number of capsule hotels in this region is further expected to bolster the growth of the regional capsule hotel market during the forecast period.

COVID-19 Impact on the Global Capsule Hotel Market

The outbreak of COVID-19 has an adverse impact in the growth of the global capsuIe hotel market, owing to the prevalence of lockdowns in various countries across the globe. Stringent travel restrictions were imposed by the government of numerous countries in order to curb the spread of the virus. Lockdowns resulted in the shutdown of hotels and restaurants across the globe, which resulted in their decreased demand. Thus, the pandemic has had a negative impact on the global capsule hotel market.

Top 10 Major Players of the Global Capsule Hotel Market Include 

These players are working on developing strategies such as product development, merger and acquisition, partnerships and collaborations to sustain the market growth.

For instance, in June 2021, Suba Group, a Mumbai-based hospitality firm operating in the mid-tier segment, acquired 1589 Hotels, a leisure budget hospitality chain, in order to maximize Suba’s presence in the global capsule hotel market by opening new avenues for the growth of the company.