Is this the next generation in the evolution of airport hotels?
For decades, a thunderstorm or missed connection meant you might have to sleep in the airport, leaving frustrated travelers with a truly tired dilemma: Is the boarding gate chair-curl worth a try, or is it better just to grab some floor?
Some airports are considering a better way to accommodate unlucky passengers while making some money in the process. At least four companies are angling for space inside terminals for a new generation of sleeping spaces dubbed cabins, capsules, and even pods. One of them, Minute Suites LLC, has retail sleep locations at airports in Atlanta, Dallas-Fort Worth, and Philadelphia, with a Charlotte, N.C., location opening in December. Washington Dulles airport is exploring the concept as well, and aims to have a sleep amenity next year.
Meanwhile, a company dubbed izZzleep opened a sleep capsule warren in the Mexico City airport this summer, with rates from $8 per hour to $34 per night. Yotel Ltd., the London-based mini-hotel operator, operates YotelAir in four European airports, with a Singapore Changi project coming in early 2019. Yotel also hopes to expand into U.S. airports at some point, as does NapCity Americas, which has acquired U.S. rights to Napcabs, a German-based sleep pod company that operates at the Munich airport. As airports are growing and expanding, a lot of them are definitely exploring passenger amenities, said Stephen Rosenfeld, a Florida entrepreneur who formed NapCity Americas in 2014 to operate a version of the “napcabs” found sprinkled across Europe.
And they’re becoming more open to the idea. Yet “rest” as retail has been slow to migrate to airports, despite their decades-old role as host to exhausted air travelers whose plans were derailed by weather, missing flight crews, or malfunctions. Scour some of the world’s key hubs — New York City, Los Angeles, Madrid, Toronto, Zurich — and you’ll find nary a bed available by the hour. The reasons vary, but revenue considerations generally play a large role when it comes to space allotment at major airports. A bar, sit-down restaurant, or McDonald’s will always bring in far more revenue at a busy terminal than an amenity such as a gym or napping pod — and airports generally command a cut of sales.
“One seat in an airport restaurant can generate $20,000 in revenue in a single year,” said Peter Chambers, co-founder of Sleepbox, a Boston-based startup that sells a 45-square-foot cabin for airports, offices, and other locations.
The retail sleep sellers also want to be located inside security checkpoints to help minimize customer hassle. No one wants to deal with long lines or TSA staff more than necessary.
But there are obstacles to the blossoming of this new, personalized hotel industry. Historically, airports have had a symbiotic relationship with nearby lodging that supports crew layovers, convention business — and stranded passengers. Airports may be reluctant to be seen as competing with this ecosystem of accommodations both on the airport grounds and in surrounding areas, many of which have an airport shuttle as a standard feature, said Scott Humphrey, deputy director of the Bozeman Yellowstone International Airport.
Most retail sleep operators would also want a longer-term lease commitment from airports to realize a proper return, said Jo Berrington, a vice president at Yotel, where the average YotelAir stay is about seven hours, with a starting price of around 35 euros ($42) for four hours. She said the company’s ideal airport business size is about 60 to 150 cabins. YotelAir, which has outposts in Amsterdam, Paris, and London’s two largest airports, has had discussions with North American airports but no agreements yet, Berrington said.
Minute Suites says its business is consistent, but that it uses dynamic pricing to adjust for periods of low and high demand. The company evaluates airports with an eye toward international flights and heavy connecting traffic. Rates start at about $32 per hour; an overnight stay at the company’s two DFW Airport locations is about $140, roughly $100 less than a room at the airport’s Hyatt Regency near Terminal C.
“Our business model isn’t just based on delays and cancellations,” said Christopher Glass, a vice president with Minute Suites, which was formed by two ophthalmologists from Iowa, including the daughter of the late television psychologist Dr. Joyce Brothers. “Flight crew members hop in and take a nap. Pilots love it.”
At Washington Dulles, the primary international airport for the nation’s capital, the Metropolitan Washington Airports Authority issued a call for proposals last month for “a quiet and comfortable place within the airport to sleep, relax, or work while waiting to board a flight” that could be almost 1,300 square feet and available 24 hours per day, year-round. “The atmosphere should be similar to what a traveler would experience in a small hotel room or similar private area,” the airport said in its pitch to potential operators.
A Design Paradigm Taken Directly From the Sarcophagus
Of course, the idea of tight quarters for a quickie nap or short overnight snooze is hardly a new one, with Japan being the pioneer in the concept of sleep capsules aimed at densely packed urban areas, clubbing locales, and railway stations. In many Asian versions, the sleep pod is the hotel stripped to its basic essential—a mattress and little else—with a design paradigm taken directly from the sarcophagus.
Most of the current designs being pitched to U.S. airports are dramatically larger. “We have a very Americanized model of what there is available overseas,” Glass said. “We as Americans love our space.” The company is planning to double the number of locations by the end of next year but won’t reveal its likely next venues.
Chambers says U.S. airports are rapidly shifting their focus from increasing “dwell time,” or the interval travelers choose to spend in an airport shopping or drinking, to “enhancing” that time. The right mix of amenities, including a clean, quiet, secluded place to rest, is likely to make travelers choose one airport over another when they connect.
“I think that’s why we’re seeing a lot of major airports finding space for all these units,” he said.
The general business model is one of high automation, with a vending-machine approach. Human employees are on duty to clean the cabins once they’re vacated, and at Washington Dulles, officials want the attendant to provide security, too. It was unclear whether such pods would be restricted to one person at a time, though YotelAir models can accommodate families.
These pods aren’t just horizontal rubber rooms: They have televisions, Wi-Fi, mobile phone chargers, and plugs. Minute Suites sells almost 150 items to go with your nap, such as toothbrushes — but many do not. The idea isn’t to replicate a hotel, especially as low overhead is critical to success.
“I don’t claim to be a hotel, I don’t want to be a hotel,” said Rosenfeld, who is working to sign NapCity’s first lease. “We’re here to help the public.” The company will charge $45 for one hour, the minimum stay, and then $20 for every subsequent 30-minute period in its cabin.
“It’s a high-margin business. … The difference is we do need staff,” he said, calling the airport sleep cabin a “micro-luxury, a price that anyone basically can afford.”
After he tackles the airport business, Rosenfeld sees a future home for nap cabins that could be even more lucrative — hospitals.
©2017 Bloomberg L.P. This article was written by Justin Bachman from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to firstname.lastname@example.org.
Subscribe to Skift Pro
Subscribe to Skift Pro to get unlimited access to stories like these ($30/month)Subscribe Now
Photo Credit: NapCity America's napcabs are part of a growing trend in sleeping pods at airports. NapCity Americas via Bloomberg
Non-Hub U.S. Airports Get $766 Million From FAA to be Safer and Greener
Uncle Sam is giving to airports improvement grants an upgraded freebie, without matching requirements. Are airports going green because it's beneficial for the environment or beneficial to them?
Ruthy Muñoz, Skift | 3 weeks ago
Could Other Airports Follow Pittsburgh’s Lead to Diversify Revenue?
The pandemic and the push for sustainability are forcing airports to think outside of the box. The more creative, the bigger the win, it seems. But are some of these revenue-generating ideas here for the long run or only until travel recovers?
Ruthy Muñoz, Skift | 2 months ago
Australia’s Skyfii Targets Airport Tech Market Globally With Its Computer Vision Acquisition
Skyfii's acquisition of the startup CrowdVision highlights how computer vision is becoming a key technology for the travel sector. The tech lets airports and other companies generate data and insights to ensure safe and efficient crowd control and optimal retail sales.
Sean O'Neill, Skift | 2 months ago