[Start-it-up] How to start a Pod Hotel?

IRCTC has announced setting up a pod hotel at the Mumbai Central railway station by the end of 2020.

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With the rise in budget conscious and solo travellers looking for affordable lodging opportunities, starting a pod hotel can be an interesting business proposition. A pod hotel or a capsule hotel is a new-age, innovative lodging concept that provides a tiny size accommodation, typically of the size of one single bed for travellers who are looking for a budget-friendly and safe stay just to rest in a space for some time. 

Capsules in a pod hotel are arranged one after the other and also one over the other. Each pod contains a bed with a mattress and proper bedding, a personal television set with headphone facility, adjustable lights, charging points, free wi-fi, adjustable air-conditioning facility, a dresser (wall mirror) and a sliding door (shutter) with locking facility.

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Pod hotels have shared washrooms, a locker room for luggage and a cafe where the residents can sit and order food or work if they want to.

The concept of capsule hotels originally came from Japan and is now becoming known to the rest of the world. Singapore, UK, USA and other countries have also come up with pod hotels.

The first pod hotel was opened in Mumbai, India in 2017 called UrbanPod. The concept is still new and you can have the first-person advantage by starting your own Pod Hotel now.

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The Investment

The most important thing to keep in mind before setting up a pod hotel is the location. The location where you want to set up a pod hotel should be central or close to the points of transit like the railway station or airport. The ideal location should also be nearby tourist and business spots. 

Your investment will include buying a suitably located property. The prices will vary from city to city. You can also enter into a revenue-sharing model with someone who owns the land. You can also try to strike a Public-Private Partnership with the government authorities as IRCTC announced setting up a pod hotel at the Mumbai Central railway station by the end of 2020.

You can buy or lease out 9,500 sq ft space. It will house 140 pods with the accommodation capacity of 150 people.

Once you work out the location, you will have to make an investment of around INR 12 - 15 crores. The size of one pod ranges between 50 square feet and 90 square feet. Setting up one pod, which includes all the facilities provided to the customer will cost INR 6 to 7 lakh. 

To make the process smoother and receive guidelines, you can also take the franchise route.

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Return On Investment

Each pod costs anywhere between INR 1,000 to 3,000 for different categories (a classic pod, a suit pod, private pod etc.) The rates are inclusive of breakfast as well. With an occupancy rate of around 65 per cent, you can achieve breakthrough in little over a year.

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