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“That’s all I need.” Lydia Smyth, a 56-year-old representative for the Wisconsin Medical Society in town for meetings on health care, said she chose a micro-hotel because of the low room rates, spending a night compared with the 0 paid by some colleagues staying at the Grand Hyatt Washington.Modus, which also operates the Windsor Suites hotel on the Benjamin Franklin Parkway, said rates at Pod Philly would typically run about 20 percent less than market averages.The trend picked up steam domestically in New York and San Francisco, providing visitors some relief from otherwise stratospheric guest room rates.The format has begun spreading beyond those high-priced climes as budget-conscious travelers — empowered by Google Maps directions, Yelp restaurant reviews, and Trip Advisor attraction guides — spend more time exploring destinations and less in their hotel rooms, said Steve Michels, managing director of global hospitality for commercial real estate firm Cushman & Wakefield in New York.The hotel will rise at a 12,000-square-foot site of a former parking lot owned by Philadelphia-based Parkway Corp., which is partnering on the project.The hotel’s ground floor will be given over to a restaurant and a coffee shop, which are to be operated by Greg Root and Nick Kennedy, the team behind Fishtown’s Root and Suraya restaurants.
“You can generate more revenue on a lesser amount of square footage, and that can bolster the attractiveness of the investment,” he said. Hilton Hotels & Resorts, based in Mc Lean, Va., is said to be working on a new brand with guest rooms that are even smaller than the roughly 250-square-foot units at its Tru by Hilton chain.
Average nightly room rates in Philadelphia ran 0 in 2017, compared with 9 in San Francisco and 5 in New York, Cushman & Wakefield’s Michels said, citing STR data.
Philadelphia rates could soften further, too, as the city’s growing number of hotels compete for guests.
“The room is a comfortable bed; it’s a big TV; it’s a high-design bath,” said Conrad Cafritz, whose Washington-based Cafritz Interests is parent to Modus Hotels, one of Pod Philly’s developers.
“It’s everything you want or need in a room and nothing you don’t need, which is extra space.” The microhotel concept was born abroad in such cities as London, Paris, and Tokyo, where demand for overnight stays is high and space for building new hotels is scarce.
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Prominent brands specializing in micro- hotels include the Amsterdam-based citizen M chain, which has a New York hotel in addition to ones in London, Paris, and Taipei, and Yotel, a subsidiary of Yo! in London, which calls its guest rooms “cabins” and operates hotels in Singapore, New York, and Boston. While no statistics are available on the growth of micro-hotels, Michels said their increasing prevalence can be seen in New York, where — according to his analysis of data from hospitality-market-tracker STR — about a fifth of the 11,500 guest rooms under construction fit the classification.