Mumbai-based company brings the capsule hotel concept to India catering to a large segment of travellers looking for a short stay on a budget.
At a Glance
Founders: Hiren Gandhi, Shalabh Mittal, Berlin Lee
Year it was founded: March 2017
Where it is based: Mumbai
The problem it solves: Bring in the concept of sleeping pods for budget travellers
Mix travelling on a budget with futuristic design and expensive real estate - the Japanese came up with sleeping pods, and now, we have them too. Most times, all a traveller wants is a clean bed, a place to charge their phone and laptop, and they are ready to fly.
Mumbai-based hospitality startup Urbanpod is offering the answers to these needs. It has aesthetically designed state-of-art pods with ample amenities and a design to ensure privacy. While the pods have minimal décor, the spacecraft design is strangely enchanting. The company aspires to be the one-stop destination for businessmen and backpackers looking for a short stay in a city.
Inspired by the Pod
Hiren Gandhi, Co-founder, Urbanpod, says, “While staying in Singapore on some work assignments, Shalabh Mittal, one of the Co-founders of Urbanpod, got a chance to stay and experience an elegant Pod hotel. He absolutely loved the concept, business model, service and the quality that was offered. He shared his thoughts with me, and as I am a hotelier myself, I decided to visit Singapore to get a first-hand experience. I must say that my experience was thoroughly enriching, and I was convinced about the product.”
Before starting Urbanpod, Hiren ran his family hotel business in Gujarat. A background in the hospitality industry was an added advantage for him to start this company. Hiren says he still oversees the family business. Shalabh is also an entrepreneur – and worked in his family's shipping business. Hiren and Shalabh were batch mates at SP Jain Institute of Management and Research.
“After being convinced about the Pod concept, we roped in our third partner, Berlin Lee, a veteran in the architectural design and interiors business. Berlin Lee has designed Urbanpod, and brings-in his experience in setting up Pod hotels in Singapore and China,” says Hiren.
Urbanpod is currently an 18-member team based in Mumbai.
Speaking about the challenges they faced, Hiren says,
“Being the first Pod Hotel in India, and the first-site for Urbanpod, we did face teething problems around getting the design right, which is critical; regulatory challenges, and having people to accept the service model. Since location is a strategic asset, we took about 8-10 months to zero-in on areas in Mumbai, which could be the best location for setting up the hotel.”
“As the concept was new to the Indian audience, we had to educate them initially. In fact, it is an on-going exercise for the ones who are still first-timers, though typically this is not a new concept for the global travellers, who are used to staying in the Pods,” he says.
Urbanpod has one property at Andheri, and plans to expand to six to eight locations in the next two years in cities such as Bengaluru, Delhi, and Mumbai, and increase the number of pods from the current 140 to 800. “We are looking to break even by mid-2020. Next month, we will be operationally profitable. We are also structuring a pricing policy for travellers who stay for less than six hours.”
Revenue and profits
The startup claims it has served over 10,000 guests so far. On an average, its occupancy rate is 60 percent, and it sees around 2,500 guests per month now. In total, it has 140 pods in the property. Hiren says: “We will be operationally profitable by next month. Our pricing is dynamic and varies between Rs 1,000-2,500 for different categories.” The rates are inclusive of breakfast.
The tourism and hospitality sector’s direct contribution to India’s GDP in 2017 was $91.27 billion. This is expected to reach $194.69 billion in 2028, implying a CAGR of 7.2 percent during 2012-28. A 2017 report by WiseGuy Research Consultants shows that the global capsule hotels market was valued at $159 million in 2016, and is expected to reach $226 million by the end of 2022. The report says the Asia-Pacific region will occupy a greater market share in the following years, especially in China, India and Southeast Asia regions.
Competitors and differentiator
The startup claims to have no competitor in the business segment as of now, but it concedes that budget hotels can be seen as competitors to some extent.
Urbanpod considers hygiene and discipline as its biggest USP. “There are three types of pod - Classic pod (one room, many pods), Suite pod (double bed), and Private pod (ensures complete privacy). Like any hotel, these pods also have a locking system.”
“We are very particular about hygiene and cleanliness. We don’t allow wearing shoes beyond a certain area. We provide individual lockers and each pod has its own locker, which can be locked from inside. Other facilities inside a pod include a television, a safe deposit, A/C, mirror, and a small hook to hang clothes. We provide headphones for TVs, as there are no speakers, to ensure there is no disturbance,” says Hiren.
“The venture, so far, has been funded through the private investments of the Co-founders. We are planning to raise funds through private equity, venture capitalists, and HNIs (high net worth individuals). The funds raised will be used in expansion, brand-building, technology innovation, talent-acquisition, improvising on the design, exploring newer formats, and so on,” says Hiren.
The startup is gearing for a planned collaboration with IRCTC. Hiren says, “We are talking to IRCTC to revamp retiring rooms at various railway stations and introduce pods at locations specified by them. For this, we are also working with other contractors”. So, watch out for pod hotels the next time you travel by Indian Railways.