No-Frills Capsule Hotels Filled with Busy Travelers

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With a 30 percent growth rate in the number of travelers, building or buying hotels promises big profits for investors, including capsule hotels, which have opened in HCMC and other tourism cities.

The first capsule hotel appeared in HCMC in 2014, but the network has grown rapidly because of high demand. For travelers, especially backpackers, who go out all day and only return to hotel to sleep, capsule hotel are a good choice.

Though each capsule is small, just 21 square feet, it is equipped with necessary furniture, TVs, drawers, shelves, sockets and a good bed.

The low room rate is the major reason that attracts travelers to capsule hotels. A capsule room on Bui Vien street in the central area of HCMC is $6 per night.

An analyst said that the capsule hotel rate in Vietnam is lower than in other regional countries but the quality is in no way inferior. In Kuala Lumpur, a capsule hotel has the rate of $10-15, while in Bangkok, the rate is $10-20.

Travelers like capsules as they are convenient and cheap. Investors like the model because it requires low investment rate.

Travelers like capsules as they are convenient and cheap. Investors like the model because it requires low investment rate. One just needs to have a land plot with an area of 60 square meters to develop a five-story hotel with 60 capsules. The staff at the hotels is three times smaller than at traditional hotels.

Investors are optimistic about the business performance. The owner of a capsule hotel said at first he had 24 guests a day, which meant an occupancy rate of 40 percent. But after two months of operation the proportion increased to 80 percent.

All capsules will be booked on holidays or Tet. With the average occupancy rate of 80 percent, his hotel has revenue of VND6-7 million a day.

Encouraged by success in HCMC, investors have opened capsule hotels in Nha Trang and Sa Pa.

A capsule hotel with 56 rooms in Nha Trang quickly became well known. The owner of the hotel said all the capsules were imported from Hong Kong. He declined to give exact figures about the investment capital, but said the investment rate for capsule hotels was much lower than traditional hotels.

Besides capsule hotels, there are many other types of hotels in Vietnam, including hotels made of tubes in Da Lat, containers in Da Nang, and wooden leaf-roofed houses in Quang Ninh province.

Just six kilometers from Co To town center, there are 18 beachfront wooden houses ready to serve travelers. The houses are small and made of environmentally friendly materials.

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