For a long time, hoteliers in New York have struggled with a single commonly heard complaint: too small hotel rooms that charge too much for their sizes. Now, however, hoteliers have found a way to put an end to these complaints by maximizing the space that they have to work with. Hotels in New York now offer tiny yet insightfully designed accommodations for around $200 a night, or even cheaper.
These new rooms have started a trend in the hospitality business called ‘affordable luxury’ and represents New York’s version of the Japanese capsule hotels, which offer guests a tiny sleeping space that more closely resembles a coffin in a mausoleum rather than the lavish hotel rooms people are used to.
New York’s version, however, bears more similarities with the small but complete hotel rooms that first appeared in Europe. Despite being less than 100 square feet in size, the rooms are equipped with their private bathrooms. In Europe, these hotel rooms were first seen at airports and were rented out by the hour, thus enabling passengers to take a nap, shower, and rejuvenate during stopovers.
In New York, the first version of these tiny yet comfortable hotel rooms appeared in the 345-room Pod Hotel located on East 51st Street in Midtown East. The hotel opened in early 2007, and charged as low as $89 a night. Since then, it has achieved a 93% occupancy and its net profits were in excess of $100 a square foot.
Last year, Pod Hotel’s first competitor, Yotel, appeared. This is a 669-room hotel located on West 42nd Street on the Far West Side. Its rooms were a bit more expensive, though, starting at $149 per night.
To take advantage of this rising trend, the NY hotel developer of the Pod, BD Hotels, are now planning to open another in Manhattan. Principal of BD Hotels Richard Born said that Pod 39 would retain the advantages of the original Pod Hotel but will also come with some improvements. For one thing, every room in Pod 39 will have a private bath, whereas some rooms in the original Pod Hotel had shared bathrooms.
The newer 366-room Pod 39 will be located on East 39th Street in Murray Hill and is expected to open soon in the former location of the Allerton club hotel. It will be housed by a 17-story landmarked building with a Northern Italian Renaissance façade featuring arched windows, terra cotta details, and authentic brickwork. It also has a roof garden and a central colonnade. The rooftop guest lounge is considered as the real gem of the space because of its neoclassical design.
The rest of the new hotel, however, will be more contemporary. The lobby will feature vibrantly colored natural materials such as terrazzo, red glazed brick, slatted hickory wood, and so on. On the ground floor, there will be a restaurant, a library, a pool table, a table tennis table, a bar, and a fireplace. All in all, the hotel will have 4,500 square feet of communal space.
The idea behind this came from the original Pod Hotel, where every corner of the lobby is usually occupied by somebody sitting cross-legged on the floor with a laptop.
Aside from Pod 39, plans for Pod Hotels in other cities in America, including Boston, Chicago, Los Angeles, and Washington DC, are in the works. All future Pod Hotels, according to Mr. Born, will put emphasis on the communal areas where guests can hang out.
“We’ve learned that our customer really wants to be out of their room in a public environment with other hotel guests.”
Their experience with the original Pod Hotels also gave the developers insights of what kinds of rooms guests preferred. They found that rooms with two single beds are more valuable than rooms with queen beds. They also found that people also prefer sleeping on bunk beds when they’re with a friend or a business partner.
Pod Hotel’s managing director David Bernstein said: “The demand for rooms with two beds far exceeds the availability in this city. I believe we’re going to price higher for a room with two beds and a private bathroom than we will for those with one double bed.”
Yotel, on the other hand, which began in three European airports, is planning its own expansion. The company recently announced the creation of an investment fund, which it will use together with NYC hotel developer John Buck company and other partners to acquire and develop $650 million worth of Yotels all over North America. The expansion will occur over the next 3 to 5 years.
The original Yotel offered 170-square-foot rooms at just $149 per night. Since the hotel opened, it has achieved an average daily rate of $200. The Yotel, however, offers something unique – high-tech features that help keep prices low but contribute significantly to consumers’ satisfaction. These features include check-in kiosks and a robotic luggage concierge called a Yobot.
Yotel chief executive Gerard Greene shed light on the inspirations used for the hotel. “Our inspiration was the Japanese capsule hotels, British Airways first class, budget hotels, and also five-star design hotels. We tried to marry all four to get a luxury product at an affordable price, and the thing that have was really the space. If we could take up less space, we’d pay less for the land, which means we could spend a little more on the fit-out of the room.” This explains why the rooms, yet so small, are so thoughtfully designed.
The Yotel in Manhattan is just the first of a chain of city center hotels its developers are planning on. It currently has about 20,000 square feet of food and beverage areas, which include a restaurant, lounge, a terrace, and a bar. During the first 11 months of operation, the hotel reached 80 percent occupancy and obtained a gross operating profit of 50 percent.
Future Yotels, however, will have less space for common areas and food and beverage areas, which is the opposite of the plans for the new Pod Hotels. According to Yotel’s Mr. Green, “it will be 300 to 400 rooms and just the club lounge element.”
Joining the trend is another affordable yet luxuriously designed hotel chain, citizenM. The company is currently planning to open two hotels in the Manhattan area in 2013 and 2014. The hotels will be located on West 50th Street in Times Square and at 185-191 Bowery in NoLita.
Read more in NY Times
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