Are micro-hotels here to stay?

Zoku Loft room with bunk bed.

Micro-hotels have made waves in the hotel scene in recent years, popping up in prime travel locations across the world offering a new kind of accommodation.

The downsized, pared back offerings put a twist on the conventional hotel design, usually with fancy tech or another unique twist substituting the traditional luxuries.

Earlier this year, Mi-pad Queenstown opened in Queenstown, dubbing itself New Zealand’s first smart hotel.

It’s built around the micro-hotel concept, taking away every unnecessary function. It has no kitchen, no on-site restaurants, only the “need-to-haves”. It implements technology whenever possible, lighting, air conditioning and key cards are all controlled through guests’ phones through the hotel’s app.

“In terms of eco-initiatives and removing clutter in the room there are benefits, in terms of key cards then there are none to lose or to recode or recycle,” said Stephen Borcoskie, Mi-pad hotels.

A consistent theme in micro-hotels is setting up in key, expensive locations. New Zealand’s first Mi-pad setting up in Queenstown was no surprise, as the accommodation prices there have skyrocketed. The city has an ADR of $242.62 with an occupancy rate over 82 percent according to Colliers International’s October 2018 New Zealand  Hotel Market Snapshot.

Internationally, one of the biggest micro-hotel brands is YOTEL, which focusses on cutting-edge design to create small but thoughtfully curated cabins in key locations.

YOTEL justifies its minimalism as “removing the unnecessary extras, we give space for our guests to enjoy their stay in city centre locations without the city centre prices.”

The claim that micro-hotels cost less though is dubious, as per their size these micro-hotel rooms can cost guests just as much or more for the area they get.

For a 16 sqm room at Mi-pad Queenstown for instance, guests pay $15.30 for every sqm. At the Cordis, Auckland on the same night, guests could get a room for $9.70 per sqm.

Micro-hotels would be quick to point out its not just size and cost that matters to its guests. They target millennial travellers who want original, engaging or enthralling experiences in the most desirable and expensive locations.

But there is a limit to how small the hotel rooms can go before they violate New Zealand Housing Improvement Regulations. These laws regulate that rooms must not cover an area less than 6 sqm, must be 1.8 metres wide and have at least one window situated in an external wall to get adequate light.

The One Room Hotel in Antwerp is a micro-hotel that would push those boundaries – the three-storey hotel is just 2.4 metres wide. The hotel has just one bedroom, hence the name, and is mostly filled with staircases.

What started as a niche alternative has leaked into mainstream hotel brands, with hotel giants Hilton even launching its own micro-brand Motto.

“The launch of Motto by Hilton emphasizes our relentless commitment to creating innovative brands that meet what today’s want”, said Phil Cordell, global head of new brand development, Hilton.

The brand aims to separate itself from the crowd by being adaptable to guests’ needs, creating the whole experience around individuals. Rooms can change size, move beds, toilets and furniture around for when they’re not needed. For groups of travellers, Motto also gives the option for guests to books rooms that connect and link to each other, creating shared experiences. It also sells itself on the same principles as YOTEL, with affordable accommodation in prime locations.

“The unmatched flexibility of Motto offers tremendous value by empowering travellers to tailor every stay to their specific needs.”

Prime locations and novelty experiences and are what draws people to the micro-hotels. The younger generation of travellers don’t need the surface area or pampering of traditional luxury hotels, instead are looking for things they haven’t seen or done before in places they need to stay.