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Luxury Capsule Hotels and Customer Experiences Research Paper


The entry of small tiny spaces utilized as bedrooms popularly known as ‘capsules’ gave a new face to Japan’s hospitality industry. The uniqueness of these small spaces, which take the form of a ‘spaceship,’ is a thing that makes several tourists who visit the country wonder in amazement. Due to their sizes, the capsules can only accommodate one person per night, a factor that makes the facilities very convenient for lone travelers. Although the western countries have tried to venture into a similar sector by introducing a replica known as ‘pods,’ the product has not received the hype witnessed in Japan. It is also fundamental to explain that the love for the capsules extends beyond Japan’s borders because more people around the globe are beginning to enjoy spending time in these little rooms. This paper aims to explain the impact that luxury capsules have on client experiences in Japan.

Luxury Capsule Hotels in Japan

History and Target Clients

Capsules have a rich history that dates back to 1979 when busy working Japanese individuals missed their trains back home and decided to spend the night in small pocket-friendly accommodation facilities. According to Romero (2015), the demand for capsules also owes its introduction to the drunken individuals who wanted a place to stay due to their inability to drive or walk to their residence places. The increasing number of clients visiting the accommodation facilities is associated with the dynamic nature of Japanese people who spent several hours working. Other countries, including China, India, Belgium, and the Philippines, started offering capsule services from 2014 to 2017. Notably, these countries’ service did not enjoy the fame and popularity associated with their counterparts in Japan.

The target clients who frequent capsules range from travelers, working individuals who missed their train back home, or busy students. Since the facilities provide accommodation at prices within reach of the average and the middle class, it is common to see several individuals seeking accommodation in the capsules. Moreover, unlike other accommodation facilities around downtown areas, capsules are well designed in a manner that matches the expectations of those individuals who want to spend a night alone (Valdani & Arbore, 2011). It is imperative to highlight that although the primary target consumers of services offered by capsules were drunken individuals who could not drive or walk home, the spectrum has widened because of the nature of services offered. Free internet access, accompaniments such as TVs, radios, and lockers are additional elements that have made the capsules gain popularity in and outside Japan.

Size and Extent of Penetration

Capsules are small and can only accommodate one person per night. The space provided may not fit those consumers traveling in large numbers or families on vacation and those who want to store luggage in their rooms. People who have luggage can always store them safely in lockers provided by the service providers. In the perspective of Julier (2017), capsules are about 1.25 meters, a space that is enough for a person to stretch, turn, and even sit while watching TV, listening to music, or browse the internet using their gadgets. The space ship appearance of the capsules implies that an individual cannot stand inside the facility. As such, the facility meets the needs of those clients who want to spend some time alone or are late and want to pass the night before proceeding to their next destinations. It is important to assert that besides their small sizes that, in most cases, accommodate one person and a few amenities, the services enjoyed are almost equivalent to those accrued in modern hotels.

Surprisingly, although capsules are famous in and outside Japan, their services are not present in other countries. As such, the facilities have become exclusive to Japan. In effect, capsules have, over time, become some of the tourist attractions for people who visit from other parts of the world. Every year, people from places such as the United States, Africa, and Europe visit these facilities and even spend their time in one of the numerous capsules in Japan’s downtown areas. Ivanova, Ivanov, and Magnini (2016) state that although some countries in the west and Europe tried to develop pods similar to capsules, the facilities did not receive the expected number of target individuals as in the case of capsules. Several researchers claim that people’s preferences in Japan are diverse concerning those of individuals living in Europe and the west. Therefore, these researchers associate the divergent preferences to the exclusive nature of capsules.

Customer experience in Japan

Enhanced Satisfaction and Accessibility

One of the greatest experiences introduced by capsule hotels in Japan is satisfaction from the consumers. The additional services introduced, especially in early 2000, made the facilities exceptional and very satisfying. In effect, modern consumers love products that match their expectations concerning the value and quality. Therefore, when capsules emerged and offered services priced in a pocket-friendly manner, the level of satisfaction derived by consumers augmented (Lin, 2011). The amplified satisfaction is one of the factors linked to the increasing number of visitors who frequent capsules. In the challenging economic times, consumers are concerned with high priced facilities that surpass their purchasing power. However, the advent of capsules that offer similar services under minimal cost proved to be more rewarding and satisfying for the domestic and foreign clients who need accommodation.

Since the capsules’ primary objective was to cater to the needs of the busy working individuals, their location is always near a terminus. The location of the facilities makes them very accessible in and outside the downtown areas of the city. It is not a challenge to locate numerous capsules near a train station in Japan. By ensuring that the facilities are close to terminuses and downtown areas of the city, the designers of capsules achieved clients’ desired expectations (Bowie & Buttle, 2013). As a result, the facilities are very pivotal for individuals who want to undertake their activities within the city and, at the same time, enjoy superb accommodation. This is unlike many rated hotels, which offer services in areas that may not be easily accessible, necessitating taxis and private vehicles. In a capsule, one can easily walk into the city or take a train back to work in the morning, an element that makes the facilities resonate well with the middle class and adventurous consumers.

Affordability and Enhanced Privacy

Another factor that determines customer experience and the impact of capsule hotels in Japan is the price. The price of the facilities is way below that of several hotels, which offer similar services. With a price within the buying power of several middle-class individuals in the society, the popularity of capsules has augmented. According to Wassler, Li, and Hung (2015), the prices charged by service providers in capsules range from ¥2,000 to ¥4,000 while that of hotels is from ¥3,000 to ¥4,500. The variance demonstrated in pricing dictates the drive to spend a night in a capsule. Besides the low price that determines the experiences of customers, the capsules have several facilities that make it appealing to consumers from various parts of the country and around the world. Their sleek and clean state resonates well with consumers in the middle and rich levels of the society.

Privacy is another factor associated with the amplified popularity of capsules in Japan. Unlike other modern hotels and accommodation facilities, capsules have the capacity of only one individual. The implication of the limited capacity is enhanced privacy for the consumers. As such, people who do not want to be disturbed by the hustle and bustle of the city and other individuals can opt for a capsule and spend their time inside the facility. Although some of the components in the facilities are communal, several services offered are exclusive to a single consumer (Gupta & Maurya, 2014). Inside the capsule, individuals can watch their favorite programs, listen to channels of choice, or browse sites that they love without interference. The uniqueness derived from the capsule has made it appealing to individuals who may want to work overnight in safe and free places from unwanted disturbances.

Convenient and Interactive

Capsules are very convenient, a factor that enhances customers’ experiences who spend their time in one of them—the convenience enjoyed by the capsules occasions because of the exclusiveness associated with their policies. Robinson (2011) states that unlike many accommodation facilities where consumers acquire rooms without regard to gender, capsules uphold gender regulation. As such, there are capsules for men that are separate from those occupied by women. Matsunaga (2016) explains that in cases where capsules have floors, some floors may be occupied by men and others occupied by women. The implication of exclusivity is a high-end level of convenience where clients can do their activities without the worry of clashing with consumers of the other gender. It is common for people from the opposite gender to, at times, clash, especially in facilities that have small and secluded rooms like capsules. However, by ensuring that the rooms occupied by men are separate from those of women, the issue reduces, and the experiences of clients heighten.

Besides ensuring that men and women occupy separate rooms, capsules provide fascinating experiences for adventurous tourists. Tourists from countries outside Japan can have a moment of their lives as they interact with employees working for capsules. Notably, adventurous tourists can learn some Japanese language just by staying in capsules because the facilities serve domestic tourists, and employees who work there may not be fluent in foreign languages like English or French (Bunda, 2014). Moreover, a majority of individuals who spend their time in capsules are middle-class employees who missed their train back home or those who want to work overnight. As such, there is a high possibility for one to interact with people of the Japanese dialect and acquire some aspects of their culture, language, and lifestyle. The closeness of capsules gives people a chance even to initiate a conversation with their neighbors as long as they are willing, a factor that substantiates the rate of interaction acquired by staying in capsules.


Objectivity is another factor that makes capsules famous in Japan. The capsules have their primary objective, which is to serve travelers in need of accommodation and add a few additional elements to amplify their comfort during their time in the facility. The implication of this objectivity is a clear set of consumers who visit the facilities in need of their services. In the explanation of Ruzzier, Hisrich, and Edward Elgar Publishing (2013), a visit to the capsules reveals the fact that their focus is on providing accommodation. Therefore, it is very unlikely for travelers who want recreational services to visit capsules, but instead, they visit rated hotels. By segmenting themselves and providing a certain set of services, the capsules have, over time, gained a reasonable market share in the accommodation sector. Students in search of jobs or people who are late from work do not need to incur expenses that recreational individuals incur. Instead, these individuals can visit a capsule, spend a night, and take a train back to work in the morning.


Capsules have gradually gained popularity in several parts of Japan. Regardless of their sizes, the accommodation facilities have become the best option for individuals who are late from work, drunk, or are on vacation. The price, additional services, and the beautiful appearance of the capsule are some of the factors that make it distinct from other hospitality facilities in the country. While the facilities are famous in Japan, they have not become popular in other parts of the world. Therefore, tourists enjoy having the experience of a capsule each time they visit Japan. Indeed, capsules have had an impact on the experiences of both domestic and foreign consumers in Japan.


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Ivanova, M., Ivanov, S., & Magnini, V. (2016). The Routledge handbook of hotel chain management. New York, NY: Routledge.

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Wassler, P., Li, X., & Hung, K. (2015). Hotel theming in China: A qualitative study of practitioners’ views. Journal of Travel & Tourism Marketing, 32(6), 712-729.

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