At The Jane, a tiny red-brick hotel overlooking America’s Hudson River in West Village, Manhattan’s ultra-bohemian neighbourhood, space is at a premium.

“In my room, I can turn around, and that’s about it,” said Kai Neuhaus, 33, of Germany.

With their wood panelling, velvet benches and Oriental carpets, most of the 150 rooms occupy just 50 square feet (4.6 square metres) and recalls boat cabins. A large mirror hangs on the wall to counter any claustrophobic feelings.

The century-old building, which long welcomed sailors then disadvantaged people, now attracts tourists the world over.

“But for two days in New York, it’s good enough: very well located, not too expensive, and I really use it just to sleep,” said Neuhaus, who chose to save on his lodging so he could better enjoy the city, with his hiking bag on his back.

Pod hotels can generate higher returns on real estate investment. And by their very nature, they’re not service oriented, so they have low requirements for staffing, explained Bjorn Hanson, dean of New York University’s Tisch Center for Hospitality.

“To the extend that pod rooms feature both low real estate costs and low payroll costs – which are the two biggest costs for hotels in NYC – they operate on a niche market which has extremely favourable economics,” he said.

The precursor to the trend was the Pod Hotel, which opened in 2007 amid the skyscrapers of Midtown Manhattan. This trendy spot offers 345 rooms, with sizes varying from 85 to 130 feet squared (eight to 12 metres squared) for $US89 ($92) to $US169 ($175) a night.

Their minimalist design recalls the interior of a plane, from stainless steel sinks embedded into the wall to lighted signals indicating whether the shared bathroom on the landing is free.

With an average occupancy of 93 per cent, the Pod’s success is such that it plans to open a second location near Grand Central Station in 2012.

As early as next spring, British chain Yotel plans to open at a new location on Times Square, complete with 669 “capsules” of less than 160 square feet (15 metres squared) for $US150 ($155) a night.

Already present at London’s Heathrow and Gatwick and Amsterdam airports, the British chain already proposes cabins inspired by Japan’s capsule hotels, complete with purple neon lighting and featuring a bed, retractable desk and shower.

These hotels promise “micro-luxury:” air conditioning, a safe, a flat-screen television and free Wi-Fi. The Jane also offers its clients a bathrobe and slippers.

“We don’t sell a bed, we sell a room,” said Pod Hotel managing director David Bernstein. “The atmosphere is much cleaner and more upscale than in a hostel. The size is really what makes them affordable.”

Pod hotels also offer shared common areas. At the Pod Hotel, guests can enjoy two terraces. Yotel features a lounge of over 19,400 square feet (1,800 metres squared).

At The Jane, where some 40 permanent residents still live, the sleek bar attracts a crowd of hipsters each weekend, offering clients a uniquely New York experience, at a bargain price.

Source: www.news.com.au