Overnight revolution: A new breed of luxury hotel is shaking up the hospitality industry

They deliver the things we need, the way we need them, says Mark Jones.

"OK. You are now a Citizen." Robin Chadha, a co-founder of CitizenM, hands me a black laminated card. All I've done is check into a hotel but Robin makes it sound as if I've joined some clandestine international movement. And, in a way, I have. CitizenM opens its new hotel on London's Bankside this week. The Dutch owners are already in Amsterdam and Glasgow; next is New York, then Paris.

Theirs is only the most out-there version of a new and fast-growing kind of urban hotel: one that's doing away with many of the things we've become used to for, oh, about 300 years or so. These hotels don't have check-ins, concierges, dining rooms, and they question something even more fundamental: the very idea of what "luxury" is and whether the star system is remotely relevant today.

Chadha points out the breakfast bar, then asks me to lay my hand on an iPad and repeat this oath: "I, a member of CitizenM, pledge to overthrow the existing system of hospitality wherever I encounter it …." I made that bit up, to be honest. But it's not that far-fetched. CitizenM is on a mission to shake up the business of sleeping, eating and staying.

On paper, they and the hotels like them – Yotel, Z Hotels, Qbic, Base2Stay – pose no threat to the big chains. "We have 85 rooms out of 125,000 in London," says Bev King of Z Hotels, which is just about to open its next outlet in Victoria. "A drop in the ocean." But the philosophy that people like King espouse is a challenge, and a serious one at that. After 25 years running London hotels, he was depressed by what as he saw as industry greed and extortionate charges. "Hotels," he says, "have forgotten a sense of pride in what they do."

CitizenM's slogan is Affordable Luxury for the People. All the rooms are the same because that's "democratic". So, at check-in you're not told: "I'm delighted to say that you have been upgraded from a superior luxury twin to a junior executive double." In fact, you're not told anything unless you are struggling with your CitizenM card. That's unlikely, though. You've paid up front and online, so you just swipe, get your room number and up you go. Chadha aims for a one-minute check-in and a 30-second check-out. If you need a copy of your bill, you can print "the world's smallest receipt". Going paperless and fuss-free is part of the mission.

So, I've seen the future; and it's not all that surprising when you think about it.

The CitizenM check-in uses the same technology as airports. Low-cost airlines are another obvious inspiration, only this time with fun and proper customer care. Part of the mantra is: don't be greedy – your margins will be high enough if you get it right. At Yotel, near New York's Times Square, you can still check in the old way – but 90 per cent of guests prefer the kiosks. On the ground floor, a robot takes your luggage and stores it in a glorified filing cabinet.

At CitizenM, you have to take your own bag, but it's hard to imagine many guests will feel short-changed. Think of the usual fuss, stress and palaver. A man in a uniform opens your taxi door and expects a tip. Another takes your luggage out of the boot before you can wrestle it off him. He expects a tip too. You queue at reception going through a tedious ritual of form filling and small talk. You finally get to your room and wait 10 minutes for another man to bring your bag. And you know what he expects.

That ritual is rooted in an atavistic idea of "good service". But Chadha, who put in his time as a conventional international traveller, doesn't hold with the word "service". It implies an inequality. In CitizenM's world, all are equal – cleaners, bar staff, cooks, all eat at the same tables as the guests. The porters don't, but that is because there aren't any: 21st-century luggage has wheels.

The living room is the main area of CitizenM. It's a low-slung, colourful space, part airport lounge, part student union bar. The first generation of urban-radical hotels took their cue from the Japanese capsule rooms and that very turn-of-the century obsession with minimalism. If you'd always wanted to sleep on the spaceship in Alien – or in a morgue – you were happy. Now things have warmed up. There are books everywhere, and the kind of odd things people – slightly weird people, perhaps – collect on their travels: a model puffer fish, a crocodile skeleton in a bell jar, a tiny Statue of Liberty.

CitizenM wouldn't exist without connectivity: M stands for "mobile". The Wi-Fi is free, of course, and there are screens dotted around. But the designers have embraced the spirit of therapeutic slowness. Its predominantly business clientele is on the go and online all the time, even inflight. Robin Chadha thinks – knows, because he is one – that sometimes business travellers want to switch off the phone and sit in a quiet corner with a coffee and a Grisham.

If you want to take your Grisham away and leave a Graham Greene, you can. The library works on an honesty basis, as does the food, placed in a 24-hour grazing area where you can get a Danish, sushi, sandwiches or a dish of something warm depending on what your body clock and metabolism are telling you. "I don't know where you are coming from," says Chadra, "so am I going to tell you when you come down at 9.31am – 'sorry, breakfast is over'?"

He's also not going to have waitresses bring you your cheque. If you want to fill up at his "pit stop", then leave without paying – well, frankly, you can. But he thinks people won't. And, as is the way in radical urban hotels, there's doubtless a cold cost-benefit analysis that says money saved on staff more than covers the occasional dine-and-dash guest.

The other, and crucial, piece of financial analysis is the room. The point about radical urban rooms is that they are not roomy. The smallest I've stayed in was at the Z Hotel off London's Cambridge Circus. Think of it as three strips. Strip 1 was a terrace, just wide enough to stand on. Strip 2 was the passage way, wide enough for a bedside table and a suitcase. Strip 3, the widest, housed the double bed and the bathroom. But here's the point: it felt luxurious. Firm organic mattress, 100 per cent wool-filled duvet, expensive lights, powerful shower. People don't spend much time in their rooms; the things that matter are a good bed and shower, and state-of-the-art technology. The CitizenM room is a bit bigger, a bit more expensive and the spec is quite a bit higher. You get a tablet which controls the blinds, the colour and mood of the lighting (party/relax/ romance/business) and a library of free movies.

The last place I saw that was this compact and luxurious was the new BA First cabin. That's no coincidence. When Simon Woodroffe – founder of the Yo! Sushi chain – got upgraded on BA, he came away with an idea. He'd seen capsule hotels in Japan and thought there was a better way. Jo Berrington, marketing director of the Yotel chain he created, puts it like this: "One: create transformable flexible spaces with great design. Two: create amazing luxury in a small space."

It wasn't a wholly revolutionary idea. In 1994, the Malmaison hotel group was founded to take on the Holiday Inns and Hiltons with the mantra "hotels that dare to be different". So, you got small rooms with massive shower heads, solid furniture and nice toiletries that you were urged to nick and a bar downstairs. It appealed to the urban "wet" crowd (those who spend lots on booze and food) and a new generation of business traveller.

The former chief executive, Robert Cook, has now taken over the De Vere Village hotels. He takes a big black box of a building, puts in a health club, a gastro pub and a Starbucks. The rooms, like CitizenM, are 18sq m. The bed is 2sq m housed in a wooden shack with surround sound and a 52in plasma screen. You begin to see how the new hotel arithmetic works. Add to that a "bloody good shower, fluffy towel and better linen", says Cook, and you have a formula that combines "great basics and brilliant touches".

All of which makes the old star rating for hotels pretty redundant for the new breed of user. Bev King of Z Hotels says his place wouldn't get a star under the AA and RAC system because the bed is against the wall. "As if," he says, "that matters."

Travel essentials

Staying there

CitizenM, 20 Lavington Street, London SE1 0NZ (020-3519 1680; citizenm.com). A double costs £113.05.

Z Hotel, 17 Moor Street, London W1D 5AP (020-3551 3700; thezhotels.com). A double costs £132.

Base2stay, 25 Courtfield Gardens, London SW5 0PG (020-7244 2255; base2stay.com). A double costs £124.

Yotel Heathrow Terminal 4 (yotel.com). A double costs £71 (12 hours).

All prices based on an overnight stay for two people on 20 July, room only.