From independents to major brands, hospitality companies are jumping on the micro-hotel concept. With guest rooms of less than 200 square feet — and sometimes 50 square feet — the emphasis is on technology, sleek and stylish public spaces, and more affordable rates. These hotels also provide investors with a comfortable profit margin, since the smaller room footprint means more rooms to sell.
“We know that our segment is going to become more crowded, as more brands see the value in not defining their hotel product by room size and rather by focusing on creating an experience that offers a comfortable night’s sleep, good connectivity and plenty of space to either work or relax outside of the room,” says Rohan Thakkar, senior vice president of development and strategy for Yotel. The brand has seven properties open in Europe, the U.S. and Asia, and 13 hotels and nearly 3,000 rooms in the pipeline. Five under development fall under the new extended-stay YotelPad concept.
Contributed by Laura Koss-Feder
BD Hotels’ Pod Hotels concept has five properties open in New York City and Washington, D.C., while Amsterdam-based CitizenM has 12 micro-hotels open. BD Principal Richard Born cites some of the attractive numbers: ROIs of 12% to 15%; development costs of 30% to 40% less than traditional properties, and room rates that still sit around US$100 in the off-season.
Guests also will continue to find the appeal of the micro-hotels in their lively public spaces, which feel more like living rooms, notes Josefin Baff, commercial officer at Belvar, the preferred Moxy hotels’ operator in Europe. Moxy, a Marriott brand, has 23 properties in Europe and the U.S.
As for the next phase of micro-hotels: Javier Egipciaco, managing director of Arlo Hotels, which has two properties in Manhattan, says companies will drop the “micro” prefix. “The movement to smaller living spaces is becoming a very viable option for the residential, hospitality and commercial industries,” Egipciaco says.