12 October 2019
Ever wish to lie down when you are tired due to an odd time flight or waiting for a transit? Container Hotel Group (CHG), the operator of CapsuleTransit in Kuala Lumpur International Airport 2 (klia2), is mulling new additions to the airport to satisfy different demands.
Founded by two young entrepreneurs, Ryan Loo and Vincent Tan, CHG started the business in 2013 by opening its very first container hotel in Kuala Lumpur.
It is currently operating two container hotels in Kuala Lumpur and Penang, one capsule hotel dubbed CapsuleTransit in klia2, as well as two Cocomomo Urban Pets Hotels in Old Klang Road, Kuala Lumpur and Ardence Labs in Setia Alam, Selangor.
The capsule hotel opened in 2014 at level 1 of klia2’s landside area. Due to ample demand, CapsuleTransit underwent two expansions in 2015 and 2017. It now offers 204 pods.
Co-founder and CEO Loo tells EdgeProp.my that the company now wants to focus on airport hospitality.
“We started as a container hotel operator and found that our strength is in airport hospitality,” says CHG co–founder and chief creative officer Tan.
Despite competition from other hotels in klia2, Loo says the market is still underserved as the current room capacity available in the airport building only serves less than 1% of klia2’s traffic of 31.9 million passengers (in 2018), which translates to 87,290 passengers a day.
In the first eight months of 2019, passenger traffic at klia2 stood at 22.18 million or an average of 90,522 passengers per day.
New options for air passengers
In 2019 and 2020, the company is planning three new offerings for klia2, including a second CapsuleTransit hotel at the airside of klia2. The new capsule hotel will house 72 pods and is expected to be launched in November 2019.
In addition, a new brand called CapsuleTransit Max is set to be launched in May 2020 to serve those who would like to enjoy enhanced privacy and facilities.
CapsuleTransit Max will offer 112 compact rooms with attached bathrooms at level 1 of klia2’s landside.
Tan elaborates that while CapsuleTransit requires only a minimum space of around 200 sq m to operate, CapsuleTransit Max on the other hand would need a minimum space of around 1,000 sq m.
“However, if you have a space of 50 sq m and above, Interstellar would be a marvel product,” he enthuses, introducing its third offering called ‘Interstellar by CapsuleTransit’.
Tan discloses that Interstellar pods are something new to the market. These portable modular pods could be assembled in different ways to fit pocket spaces of different shapes in the airport, with a few sleeping pods sharing a common lounge area. “One pod takes around five to six square meters, hence a pocket space of 50 sq m could fit around four or five pods,” he explains, adding that the company has spent the past few years designing these unique pods.
CHG plans to deploy the first few prototype pods in KLIA and klia2 sometime in the first quarter of 2020. “The airport building is huge, and the boarding gates are spread far apart. If we can utilise the space near boarding gates, Interstellar could serve as a last-mile option for passengers to locate a place that is nearest to their boarding gate to rest,” says Tan.
Apart from these, the company is also working with Malaysia Airports Holdings Bhd to identify places in KLIA to open a new CapsuleTransit, hopefully by end-2020.
To link up its range of offerings to provide better customer services, CHG has developed its own cloud-based management system to monitor the status and show live updates of all rooms in different locations. A new QR code-enabled door lock will also be introduced this November to facilitate self-check-in especially for Interstellar pods.
No. 1 airport capsule hotel operator
According to Loo, the airport transit hotel business is a very niche market, hence there are only a few providers in Malaysia.
“Operators need to have enough experience and a certain level of brand reputation, because brands in the airport also represent the country’s image,” he offers, noting that as an airport is a very controlled environment, only a certain number of players are able to comply with the requirements.
Unlike some hotels that are very dependent on seasonal factors for their occupancy rates, hotels in airports enjoy relatively consistent occupancy.
Operating an airport transit hotel is very different from operating a city hotel, he points out. People usually check in to a city hotel from 2.30pm to midnight, whereas an airport transit hotel has a much shorter cycle with guests checking in and out within a few hours.
“Airport transit hotels are like ‘fast food’ among hotels, hence the skill sets, system, design and layout are also very different,” he elaborates.
“Many of our guests only have less than one night to stay. If they have more than a night to stay, they will more likely stay in the city. Hotels are their destinations, while we serve our guests when they are in between their journey,” notes Tan.
CapsuleTransit provides for transit passengers who need to endure early morning or late night flights, or those who face flight delays.
The duo are very optimistic about the demand for airport transit hotels. The International Air Transport Association (IATA) predicts that the number of global air passengers could double to 8.2 billion in 2037.
The association also forecasts that there will be an extra 2.35 billion annual passengers by 2037 for flight routes to, from and within Asia-Pacific, to carry a total of 3.9 billion passengers. The number of air passengers in the region is estimated to register a compound annual growth rate (CAGR) of 4.8%, the fastest growth globally.
According to Loo, the company is currently talking to a few airports in neighbouring countries.
“The market is huge. In the coming 10 years, we are going to be a specialist in airport transit hotels especially capsules,” he says, in the hope that CHG would become the no. 1 airport capsule transit hotel in South East Asia within the next five years.