Tiny Hotels: Yotel Sees if They'll Fly in US

If your mental image of a Japanese capsule hotel is a wall of 'people drawers' -- a scene somewhat reminiscent of a morgue -- then you're not alone. There's a reason the concept hasn't yet spread to our shores.

But while it may not be everyone's cup of tea, capsule hotels have been housing satisfied Japanese clientele for many years; the first capsule hotel to open was in Osaka, 1979. They're extremely popular there, offering very low cost, usually last minute accommodation for people, in the words of Wikipedia, who are often: " too inebriated to travel safely to their homes, or too embarrassed to face their spouses ".

They haven't, however, gained a great deal of traction outside of Japan; hotel developers in the US have flirted with but ultimately rejected the idea of opening capsule hotels here. Not just because Americans tend to be much larger than their Japanese counterparts - but also because, if the Hummer and the Big Gulp are anything to go by, size matters over here. It's hard to imagine the average American eagerly signing up to sleep in a drawer. Shelling out for a hotel after getting too drunk to face a spouse... maybe.

The idea of keeping room costs down by reducing space, however, continued to be something of a no brainer for hotel developers everywhere. The question was, other than budget, what would be the enticement factor? The answer came to Yotel co-creator Simon Woodroffe when he was bumped up to first class on a British Airways flight in 2003, and had a lightbulb moment. If British Airways could pack luxury into a small cabin space, so could he. Woodroffe married his epiphany with Yotel CEO Gerard Greene's vision for an affordable design hotel -- and Yotel was born.

Woodroffe is the brains behind the British Yo! empire, which includes popular UK chain Yo Sushi! Capitalizing on the success of the Yo! brand, Woodroffe and Greene opened the first Yotel at London's Gatwick airport, later expanding to London Heathrow and Amsterdam Schilpol. Opening a Yotel in New York was always a goal because it has the perfect storm of factors that, in Greene's opinion, would guarantee Yotel's success.

"I knew land prices were high," Greene explains. "I knew demand was very strong both both from leisure and corporate, i knew even budget hotels in NY got very high rates and I knew that designer hotels charge $500 plus in NY, so whether it was London or NY, I knew Yotel was going to work."

New York certainly has its fair share of budget conscious visitors, hungry for affordable accommodation. According to New York tourism specialists NYCgo, the average NYC hotel price was a wallet flushing $255 per night in 2010 - compare that to Hotels.com's estimated $165 in Chicago and $185 in London. Add taxes and fees, and a couple staying in one mid-range NY hotel for a three-day weekend are looking at dropping, on average, close to $1,000 on their room alone.

Temporary housing demand in London set to rise | Financial News

Anticipating rising demand for corporate housing in the United Kingdom this year, Oakwood Worldwide recently secured the master lease of a new 48-unit apartment building in Farringdon/Clerkenwell, City of London. Oakwood Farringdon is one of the newest and most sought after serviced apartment developments to open in this highly desirable location, near London’s financial district, The Square Mile and London’s popular Theatreland, West End. It’s Oakwood’s 24th property in London to offer furnished and serviced apartments for corporate housing and extended-stay rentals.

“With the economy improving, we are expecting to see employee relocations increase somewhat in Europe, particularly in London, causing higher demand for quality serviced apartments,” said TJ Spencer, Vice President of Relocation and Managing Director, International, Oakwood Worldwide. “This new property is part of our inventory strategy and it’s proving to be a much needed resource as several corporations, including global banks, have already signed leases for relocating employees.”

In fact, more employees have been relocating to Europe than other parts of the world, according to Atlas Van Lines’ recently released 44th Annual Corporate Relocation Survey. It reported that 41 percent of survey respondents said Europe was the most frequent destination for an employee transfer among international relocations in 2010. In addition, 28 percent said they expect international relocation volumes to improve in 2011.

Offering a Few Extras

When employees accept short-term assignments, they’re looking for a seamless transition into housing in a desirable location that includes everything they need to settle in quickly. Oakwood Farringdon helps meet the unique needs of transferees – and then some.

“Oakwood Farringdon is pretty unique for executive housing in London,” said Ian Merrick, Oakwood’s General Manager – Europe, Middle East and Africa. “Our penthouse executive apartments are air conditioned and come with large furnished terraces, which isn’t typical of apartment buildings in London. The rest of our apartments are spacious with modern furnishings, colorful artwork and energy-efficient appliances. Tenants are thrilled with the convenience of quality grocery retailers onsite and a vibrant, exciting area with many trendy shops and restaurants just a short walk away. This area is fast becoming the new Notting Hill of London.

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