Capsule hotels find a promising market in the bustling tourist destination that is Singapore
According to Singapore Tourism Board (STB), there were 420 licensed hotels in Singapore in 2017, including hostels with more than four rooms; together they offered a total of 67,084 rooms. As at Q4 2017, the supply of hotels in the pipeline was 3,372, counting new development and redevelopment projects with planning approvals. Of these, 2,630 were under construction while another 742 were planned for development. Although the figures suggest a crowded industry, some entrepreneurs are still able to find spaces where they can grow niche accommodations. One such thriving area is capsule hotel, which provides basic accommodation in the form of a climate-controlled sleep pods fitted with amenities such as a television set, sound system and Wi-Fi. The concept – kapuseru hoteru – originated in Japan where these establishments offered capsules, stacked side by side and on top of each other, as overnight accommodation. With changing patterns in traveler habits and preferences, capsule hotels are becoming popular particularly in crowded urban destinations and among budget travelers. In Singapore, about 30 capsule hotels operate, each one offering facilities that go beyond basic, including lounging rooms, locker areas, and laundry areas – as well as unique visitor experiences. Singapore is saturated with luxury, premium hotels on one end, and low budget, no-frills hotels on the other, says Ms. Sonia Anya Tay, COO & co-founder of RB Hospitality Pte Ltd, owners and operator of CUBE Boutique Capsule Hotels. She believes establishments such as theirs fill the gap in hotel accommodation.
“We offer restful, stylish accommodation with the modern, thoughtful conveniences essential for today’s travellers. Our hotel is ideal for travelers on the go – those who do not see the need for a pool, spa or other facilities on the premises, and yet relish the fine, personal touches of a boutique hotel at very reasonable prices.” Ms. Tay observes that majority of their customers are categorized as ‘sociable global explorers’ who yearn for out of the ordinary and immersive experiences. They also tend to be in the 18 to 35 age group. “We attract a new breed of independent, IT savvy business travellers who value comfort without sacrificing on the essential features of business travel,” she adds as she recites a list of traveler must-haves: Powerful Wi-Fi, security, privacy, breakfast, clean bathrooms, 24/7 reception/housekeeping at very affordable prices. CUBE also caters to larger groups such as those who are in town to compete in sporting or choral contests. Safety, security, cleanliness, and comfortable bedding are among their basic requirements. “Our plush, comfortable capsule beds are equipped with essential features including powerful Wi-Fi, universal electrical outlets, storage lockers with digital security; and our bathrooms with shower/toiletries/hairdryer and washing machines have proven a hit with our guests. They also get to enjoy complimentary local breakfast and 24/7 reception and housekeeping services.” The experience at CUBE Boutique Capsule Hotels is a little different from a typical capsule hotel. “Generally, capsule hotels offer basic, no frills accommodation. We like to think that we are the first in offering such a business model.” Through extensive travels and with a growing family, Ms. Tay became conscious of the factors and necessities for a comfortable stay. “We wanted to differentiate our hotels from the typical capsule hotel, and this is reflected in the design, service and amenities. Our capsule hotels are built in handsomely restored conservation shophouses or authentic pre-war buildings with a rich history.” Their capsule hotels are also and sited in popular tourist areas with easy access to public transport. “Our concept comes with a 24/7 reception and housekeeping service, and a communal dining area. In contrast to the Japanese model, the CUBE capsules are more in tune with the lifestyle experiences within a community. Our locations in Chinatown and Kampong Glam are a reflection of community integration.”
A love for travel and the rising costs associated with it prompted Ms Tay to venture into the business of capsule hotels. “We want to make travel affordable and fun. My husband Benedict (Choa) was from a property fund background, and has a keen interest in civil engineering and construction, and this interest played an important role in the design and technical aspects of CUBE,” says Ms. Tay. Meanwhile, her past experience with business development and procurement in the FMCG industry also helped with the launch. “Prior to opening the first CUBE, we conducted a lot of research in the hospitality market, primarily the hostels and mid-tier luxury hotels and customer travel stay requirements.” Certain parts of the million-dollar project, including the proprietary facilities and technology, required heavy investment. Another sizeable investment was staff training, and developing SOPs for the particular business model. Besides rent from the capsules, the business also earns revenue from rental of F&B outlets, and ticketed tours. The Chinatown outlet also earns an income from drinks at the F&B station. Ms. Tay says that CUBE’s capsules have been designed and engineered based on proprietary specifications, e.g., insulated bed panels, suspended family beds, and modular dry wall partition toilets that enable cost savings, efficient construction/replication, and operation. “The model is easily replicated. Our manpower costs are low compared to a full-service hotel.”
MS. SONIA ANYA TAY