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Business trends

Japan's capsule hotels evolve into purveyors of small luxuries

Famously tiny hotel rooms begin to attract women, young people and tourists

There are no locks on the doors at capsule hotels, which have traditionally put men and women on separate floors.

TOKYO -- No longer are Japan's capsule hotels the private domain of salarymen who have missed their last train home. Now women, young people and foreign tourists are crowding in, too.

Capsule hotels first appeared in Japan in 1979, when New Japan opened Capsule Inn Osaka, in that city's Umeda district. Then President Yukio Nakano was inspired by world-renowned architect Kisho Kurokawa, who at the 1970 World Expo in Osaka introduced a capsule design for buildings.

Nakano thought his innovation would provide businessmen with a cheap place to stay the night and give them an alternative to nodding off in communal sento baths.

But the hotels have since shed their reputation as cheap flophouses, with some guests even thinking of them as fashionable and desirable places to wind down.

"Even though this hotel is located in central Tokyo, I can relax, watch videos and take a bath," said a 30-something guest staying at Anshin Oyado Premier Shimbashi Shiodome, operated by Sanza, a Tokyo-based hotelier.

The inspiration for Japan's capsule hotels, circa 1970.

The place has fittings that might not be out of place at a resort hotel, including wood and stone carvings imported from Bali. Guests in bathrobes relax on massage chairs, reading manga or watching free movies. Beverages are complimentary.

Rates for a single night begin in the 5,000 yen ($45) range, which is about 1,000 yen higher than the industry average.

"We provide a high level of services so that customers would be happy to pay extra money," said Kazuhiro Matsuda, who heads Sanza's Anshin Oyado business. "We also ensure 24/7 cleaning service."

The Millennials Shibuya has adopted internet of things technologies. About 70% of its guests are from overseas, mostly in their 20s and 30s.

Customers are advised to watch a guidance video on iPods they are given upon checking in. Lighting and the reclining angle of the bed can also be adjusted with the iPod.

About 20% of the hotel is devoted to communal areas, including a lounge and coworking space, to encourage guests to mingle.

A Japanese woman in her 20s, who booked the hotel because it was close to central Shibuya, said she enjoyed chatting with foreign guests and playing with the iPod at the hotel.

Capsule hotels need to have separate floors for male and female guests since the doors to the capsules do not lock. Unlike conventional capsule hotels, Nadeshiko Hotel Shibuya focuses on attracting female guests by offering a range of amenities and numerous yukata gown choices.

Jarvis, a Tokyo-based company that plans and develops lodging facilities, on May 12 opened a pay-by-the-hour capsule hotel for business travelers who need a place to work during the day. The hotel, an/other Tokyo, is in the capital's Kyobashi district.

"Offering a place to sleep is just one of our services," said Jarvis President and CEO Takeshi Ando. "We cannot draw in customers simply with beds."

Capsule hoteliers can no longer expect profits by offering mere mattresses, so some are adding wood paneling and designer office chairs for people who also want a place to work.

Of the 200 rooms, 136 are capsule-style "cabins" that nonetheless try to exude a comfortable and classy ambience.

In Osaka, whose food culture and proximity to Kyoto and Nara draw millions of tourists every year, companies are turning unutilized buildings into capsule hotels to meet some of the city's bulging hospitality demand.

First Cabin Hanshin Nishi-Umeda, in Osaka's Fukushima district, is operated by Hankyu Hanshin Holdings, which is known for its railways and department stores. The hotel stands on a site that a railroad used to cut through.

Seeing an opportunity to increase yields, Hankyu Hanshin Holdings entered the capsule hotel business through its Life Design Hankyu Hanshin unit. It also owns Hankyu Hanshin Hotels and was able to bring its experience from this sector.

First Cabin Hanshin Nishi-Umeda and Hotel Hanshin Osaka, located in the same neighborhood, share the same market data that hoteliers use to adjust rates.

The company is also mulling whether to open capsule hotels in other areas.

Ninehours offers a modern but traditional take on the capsule hotel. (Courtesy of Ninehours)

On April 26, the Ninehours Namba Station capsule hotel opened on the third floor of Parks Tower, a 30-story office building in Osaka's Namba district. The 165-capsule hotel expects demand from foreign and business travelers, due to its proximity to Osaka's business districts and Kansai International Airport.

"The hotel is also expected to help attract foreign visitors to Namba Parks, a popular commercial complex nearby," said a representative of Nankai Electric Railway, which operates the building.

According to real estate services provider CBRE, Tokyo's 23 Wards in 2020 will have 3,500 fewer hotel rooms than they will need, while Sapporo, Nagoya and Fukuoka combined will be 7,000 rooms short.

The number of foreign visitors to Japan is expected to continue rising. Next year, a big spurt is expected in the summer, when Tokyo hosts the Olympics. And in 2025, the World Expo will be back in Osaka.

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