Pod hotels in a bid to take New York by storm

Size doesn't matter. At least that's what a handful of hotels in New York hope lodgers will think when they stay in their small, yet functional and affordable rooms.

At The Jane, a tiny red-brick hotel overlooking the Hudson River in West Village, Manhattan's ultra-bohemian neighborhood, space is at a premium.

"In my room, I can turn around, and that's about it," said Kai Neuhaus, 33, of Germany.

With their wood paneling, velvet benches and Oriental carpets, most of the 150 rooms occupy just 50 square feet (4.6 square meters) and recalls boat cabins. A large mirror hangs on the wall to counter any claustrophobic feelings.

The century-old building, which long welcomed sailors then disadvantaged people, now attracts tourists the world over who, for 100 dollars a night - 125 dollars for bunk beds - don't fret about sleeping in close quarters.

"But for two days in New York, it's good enough: very well located, not too expensive, and I really use it just to sleep," said Neuhaus, who chose to save on his lodging so he could better enjoy the city, with his hiking bag on his back.

Considered one of the most expensive cities in the world, New York averages 260 dollars per night for hotel rooms. The least expensive rooms with Hyatt and Novotel hotels are 300 to 350 dollars, while W Hotels' starting rate stands at 600 dollars.

Bolstered by the economic crisis, several popular sites like Jane offer cut price lodgings, with a narrow bed and a shared shower room on the landing.

Pod hotels can generate higher returns on real estate investment. And by their very nature, they're not service oriented, so they have low requirements for staffing, explained Bjorn Hanson, dean of New York University's Tisch Center for Hospitality.

"To the extend that pod rooms feature both low real estate costs and low payroll costs - which are the two biggest costs for hotels in NYC - they operate on a niche market which has extremely favorable economics," he said.

The precursor to the trend was the Pod Hotel, which opened in 2007 amid the skyscrapers of Midtown Manhattan. This trendy spot offers 345 rooms, with sizes varying from 85 to 130 feet squared (eight to 12 meters squared) for 89 to 169 dollars a night.

Their minimalist design recalls the interior of a plane, from stainless steel sinks embedded into the wall to lighted signals indicating whether the shared bathroom on the landing is free.

With an average occupancy of 93 percent, the Pod's success is such that it plans to open a second location near Grand Central Station in 2012.

As early as next spring, British chain Yotel plans to open at a new location on Times Square, complete with 669 "capsules" of less than 160 square feet (15 meters squared) for 150 dollars a night.

Already present at London and Amsterdam aeroports, the British chain already proposes cabins inspired by Japan's capsule hotels, complete with purple neon lighting and featuring a bed, retractable desk and shower.

These hotels promise "micro-luxury:" air conditioning, a safe, a flat-screen television and free Wi-Fi. The Jane also offers its clients a bathrobe and slippers.

"We don't sell a bed, we sell a room," said Pod Hotel managing director David Bernstein. "The atmosphere is much cleaner and more upscale than in a hostel. The size is really what makes them affordable."

Pod hotels also offer shared common areas. At the Pod Hotel, guests can enjoy two terraces. Yotel features a lounge of over 19,400 square feet (1,800 meters squared).

At The Jane, where some 40 permanent residents still live, the sleek bar attracts a crowd of hipsters each weekend, offering clients a uniquely New York experience, at a bargain price.