Capsule Hotel Market to Reach 0.7 million, Globally, by 2033 at 7.9% CAGR: Allied Market Research

PORTLAND, Ore., May 21, 2024 /PRNewswire/ — Allied Market Research published a report, titled, “Capsule Hotel Market by Traveler Type (Solo, Group), Booking Mode (Online Booking and Offline Booking), Age Group (Generation X, Generation Y, and Generation Z): Global Opportunity Analysis and Industry Forecast, 2024-2033”. According to the report, the capsule hotel market was valued at $216.5 million in 2023 and is estimated to reach $460.7 million by 2033, growing at a CAGR of 7.9% from 2024 to 2033.

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Prime determinants of growth

Technology has always been a supporting factor for the travel and hospitality industry. Technology is disrupting the established market with the advent of web-based booking and the use of AI and IoT in operation optimizations. Technology-driven players such as online booking hotel aggregators and metasearch engines, have heavily invested in big data analytics to make analytics-driven business decisions to offer accommodations such as capsule hotels that are cheap, equipped with basic amenities, facilitate single night and hourly basis stay, and others.

On the other hand, the affordability of capsule hotels plays a crucial role in driving the growth of the market. In an era where travelers are increasingly budget-conscious, these compact accommodations offer an attractive alternative to traditional hotels, which can often be expensive. By providing a basic yet comfortable sleeping space at a fraction of the cost of a standard hotel room, capsule hotels appeal to a wide range of budget travelers, including backpackers, solo adventurers, and budget-conscious business travelers.

Report Coverage & details:

Report Coverage


Forecast Period


Base Year


Market Size in 2023

$216.5 million

Market Size in 2033

$460.7 million


7.9 %

No. of Pages in Report


Segment covered

Traveler Type, Booking Mode, Age Group, and Region


Proliferation of the global travel and tourism industry

Mobile applications, big data analytics, and artificial intelligence evolving together amidst the proliferating hospitality industry



Introduction of a capsule hotel in the untapped market

Rise in the number of airports and train stations in the developing regions


Increase in unrest due to terrorism and domestic issues in countries

Negative impact of COVID-19

Solo segment to maintain its leadership status throughout the forecast period

By traveler type, the solo segment held the major share of the market share in 2023, accounting for more than four-fifths of the global capsule hotel market, and is estimated to maintain its leadership status throughout the forecast period. Solo travel destinations have been gaining traction owing to the ability to customize the whole travel experience according to their preference, which helps the traveler gather new experiences, meet new people, and attain a sense of empowerment.

There has been a significant increase in the number of people who want to travel solo, and this has encouraged travel companies as well as travel agents to provide facilities not only for group travelers but also for solo travelers. The group was the fastest-growing segment of the market in 2023. People have now become inclined to unwind and release stress. As a result, travelers are looking for different ways to enhance their travel experience, which includes recreational activities, spiritual activities, and cultural activities.

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Offline Booking segment to retain its dominance by 2033

By booking type, the offline booking segment held the major share of the market in 2023, accounting for more than four-fifths of the global capsule hotel market, and is estimated to maintain its leadership status throughout the forecast period. Offline booking refers to all the physical centers where booking for a capsule hotel is done. The offline booking segment is expected to witness slow growth as compared to the online booking mode, due to rise in the popularity of online booking mode.

Online booking was the fastest-growing segment of the market in 2023. The use of online booking channels for booking capsule hotels is becoming very popular among travelers and is expected to attract more customers owing to internet penetration and an increase in the usage of smartphones.

Generation Y segment to maintain its leadership status throughout the forecast period

By age group, the Generation Y segment held the major share of the market share in 2023, accounting for more than two-fifths of the global capsule hotel market, and is estimated to maintain its leadership status throughout the forecast period. Travelers between the age group of 21-34 years are millennials or Generation Y travelers. They account for more than 200 million travelers who have been estimated to generate $180 million worldwide, which increased by nearly 30% since 2007.

Generation X is the fastest-growing segment of the market in 2023. Generation X is more into adventure trips, exploring cultures, and visiting new places. People from this age group have more disposable income and love holidays in comparison to Generation Y.

Asia-Pacific to maintain its dominance by 2033

By region, the Asia-Pacific region held the highest market share in terms of revenue in 2023, accounting for nearly four-fifths of the capsule hotel market. Asia-Pacific has been known for its diverse culture and attractive destinations. Countries in the Asia-Pacific region have the highest outbound trip concentrations among the higher household income brackets. This can be attributed to the rapidly growing economy and new job opportunities promoting an increase in household income in the Asia-Pacific region.

North America was the fastest-growing region of the market in 2023. The LAMEA market for capsule hotels is driven by a growing affluent population and an increasing affinity of people toward travel and vacation.

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Leading Market Players

  • The Capsule Hotel
  • First Cabin HD Co.Ltd.
  • UZ.Hotels
  • Book & Bed Tokyo
  • Urbanpod Hotel
  • The CUBE Hotel Group
  • Riccarton Capsule Hotel
  • Nadeshiko Hotel Shibuya
  • The Bed KLCC
  • Pangea Pod Hotel.

The report analyzes these key players in the global capsule hotel market. These players have adopted various strategies such as expansion, new product launches, partnerships, and others, to increase their market penetration and strengthen their position in the industry. The report helps determine the business performance, operating segments, developments, and product portfolios of every market player.

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