Swiss capsule hotels expand abroad

The Swiss company Capsule Hotel, known for its minimalist accommodation solutions, is expanding abroad, as reported by «Handelszeitung» . Founded in 2018, the company specializes in offering particularly space-saving hotel rooms. With a room area of just 2.64 square metres per capsule, the company follows the motto ‘reduce to the max’ and offers an alternative solution for business and budget travellers.

Capsule Hotel currently operates four locations in Switzerland: two in Lucerne, one in Basel and one at Zurich-Kloten Airport. The latter, opened in 2022, is the largest capsule hotel in Europe with 144 beds. Now that the business model has been established in Switzerland, the company is venturing abroad. The first international location is being built in Copenhagen, in the Vesterbro district near the main train station. This new site includes 22 capsules, a bar, and a mini-cinema with eight seats.

The company sees this first international location as a test run for further expansion. Co-founder Peter Schiffhauer explains that one to two new locations per year are planned over the next few years, with a focus on cities in Switzerland, Central and Northern Europe. In the long term, the network is expected to grow to around 15 new locations with a total of 2,000 beds by 2030.

Capsule hotel with two classes: business and economy

As part of its expansion, Capsule Hotel will in future be operating a two-tier system within its capsules, reminiscent of the concept in aviation:

• ‘Business Class’ capsules: higher-quality sleeping capsules made of aluminium with more comfort for business travellers.
• ‘Economy Class’ capsules: simpler and more affordable models made of wood (called ‘Lean-Line’) for budget travellers.

This strategy is designed to appeal to two different customer groups: travellers who prioritise comfort and are willing to pay more for it, and price-conscious guests who are primarily concerned with costs. Pricing is based on the yield management principle, in which prices vary according to demand, the competitive situation and forecasts. In Zurich, the price currently starts at 70 francs per night.

A key factor in Capsule Hotel's success is its flexibility in utilizing real estate. The company does not rely on new constructions but can easily install its capsules in existing buildings such as offices, cinemas, or clubs. This adaptability allows for easier expansion into new locations. While Capsule Hotel previously considered temporary capsule installations for large events (e.g., the WEF in Davos or the ESC in Basel), this strategy has since been discontinued. According to Schiffhauer, there were requests, but ultimately no sustainable business model developed from them.

The company's previous locations had a capacity utilisation of 76% in 2023, and its main target markets are Switzerland, Germany and the USA. With its expansion abroad, Capsule Hotel aims to continue its growth course and establish itself as a leading provider of innovative, space-saving accommodation.