Luxury in a Tomb-Size Hotel Room

The Pod Hotel in Midtown Manhattan features 345 minimalistic rooms, single and double. Managers claim the hotel has been such a success - with an average 93 percent occupancy rate in 2010 - that a second Pod is set to open up near Grand Central Station in 2012.
Natalie Huet | AFP | Getty Images
The Pod Hotel in Midtown Manhattan features 345 minimalistic rooms, single and double. Managers claim the hotel has been such a success - with an average 93 percent occupancy rate in 2010 - that a second Pod is set to open up near Grand Central Station in 2012.

For many years the standard complaint about hotel rooms in New York was, “They’re expensive but they’re small,” often uttered with a “What are you going to do about it?” shrug.

But hoteliers recently have been making a virtue of that small size, offering tiny yet thoughtfully designed accommodations for around $200 a night, and in some cases well below that. The new rooms are in the “affordable luxury” segment, an offshoot of the Japanese “capsule” hotels — little more than sleeping space, somewhat like a coffin in a mausoleum.

The latest iteration, which appeared first in Europe, offers a complete hotel room, typically under 100 square feet and usually with a private bathroom. These hotels first appeared at Europe’s airports, and some rent rooms hourly, enabling passengers on stopovers to nap, shower and rejuvenate.

The first entry in New York was the 345-room Pod Hotel on East 51st Street in Midtown East, which opened in early 2007 with room rates that started at $89 a night.

Last year, a competitor appeared: the 669-room Yotel at West 42nd Street on the Far West Side, with an introductory rate of $149 a night.

The developer of the Pod, BD Hotels, said that it would open another in Manhattan, the 366-room Pod 39 on East 39th Street in Murray Hill, sometime this month. It also plans to open Pods in other American cities — including Boston, Chicago, Los Angeles and Washington — and around the world.

Yotel, which started in three of Europe’s airports, has announced the creation of an investment fund with the developer John Buck Company and other partners, and plans to acquire and develop $650 million worth of Yotels throughout North America over the next three to five years.

At the same time, another affordable luxury hotel chain, citizenM, has plans to open two hotels in Manhattan in 2013 and 2014, one on West 50th Street in Times Square and the other at 185-191 Bowery in NoLIta.

Richard Born, a principal of BD Hotels with his partner Ira Drukier, said the Pod 39 would retain the best parts of the original Pod Hotel, but with some modifications.

For instance, in the original Pod Hotel, some rooms have shared bathrooms, while every room in the Pod 39 will have a private bath.

The Pod 39 is opening in a former Allerton club hotel. The 17-story landmarked building, designed by Arthur Loomis Harmon, has a Northern Italian Renaissance style facade with arched windows, terra cotta details and varied brickwork. Its prominent roof garden with arched openings flanking a central colonnade will remain largely untouched.

The roof garden will be open to guests, accompanied by a top-floor lounge and bar. “This is the real gem of the space, the rooftop, which is an amazing neoclassical design,” said Vanessa Guilford, the designer of the Pod Hotel. “We’re just going to restore it. We’ll have an 18-foot terra cotta-faced bar with a copper top, and we’ll have chairs and tables with antique-tiled tops.”

The Pod 39 will have a contemporary marquee and lobby with vibrant colors and both classic and natural materials, like poured terrazzo, along with walls of red glazed brick and slatted hickory wood, Ms. Guilford said. There will be a ground-floor restaurant serving snacks and a spacious lounge with a library, pool table, table tennis table, bar and fireplace. The restaurant and lounge are not scheduled to open until late July.

In total, Pod 39 will have about 4,500 square feet of communal space, Mr. Born said. “When we built the original Pod Hotel,” he said, “we had a nice communal lobby and garden, but we realized it was just too small for the capacity. In every corner was somebody sitting cross-legged with a backpack and laptop.”

The original Pod Hotel, which has a 93 percent occupancy and net profits in excess of $100 a square foot, is expanding its communal space after acquiring 2,500 square feet from a restaurant that closed, Mr. Born said. One of the reasons the developers favored the Allerton building was its ample common space, and future Pod Hotels will emphasize the communal aspect.

“We’ve learned that our customer really wants to be out of their room in a public environment with other hotel guests,” Mr. Born said.

The Pod Hotel’s principals also had another epiphany: rooms with two single beds are more valuable than those with a queen bed, said David Bernstein, a managing director of the Pod Hotels. Both hotels have bunk beds.

“We found out that people prefer bunk beds over sleeping side-by-side with a friend or business partner,” he said. “And 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.”

Rates at the Pod Hotel range from about $100 to $200 a night, depending on the season.

At the Yotel, 170-square-foot rooms start at $149 a night and have had an average daily rate of $200 since it opened, said Gerard Greene, the chief executive of Yotel. The hotel has high-tech features meant to keep prices low and customers happy like automated check-in kiosks and a “Yobot,” or robotic luggage concierge.

“Our inspiration was the Japanese capsule hotels, British Airways first class, budget hotels and also five-star design hotels,” Mr. Greene said. “We tried to marry all four to get a luxury product at an affordable price, and the thing that gave 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.”

The Yotel in Manhattan, the first of the chain’s “city center” hotels, has some 20,000 square feet of food and beverage areas, including a bar, a restaurant, a lounge and an expansive terrace. Mr. Greene said it had been at 80 percent occupancy its first 11 months with a gross operating profit of 50 percent.

But future Yotels will have less space devoted to food and beverage service and common areas.

“In Boston and Chicago,” he said, “it will be 300 to 400 rooms and just the club lounge element, where people hang out and work and get snacks.”