The Rise of Micro Hotels in the U.S. Hospitality Market

Robert Hendrickson
Twenty years ago, who could have imagined that 150 to 200-square-foot guest rooms would be hot commodities in leading urban markets like New York City?

The rising costs of hotel space combined with a desire for more affordable housing options in the United States and international markets have transformed the nature of the hotel market. Today, there is a significant and growing market for hotel accommodations that combine the finishes of a luxury hotel in a space that’s often half the size.

A micro-hotel features 150-160-square-foot guest rooms with intricately designed custom layouts and high-end finishes that maximize the purpose of every inch of space. The ground-up construction of these structures presents a unique challenge in terms of engineering, design and project management. Faithful+Gould has recently helped a number of major U.S. hotel operators plan and execute micro hotels in New York City, and we expect the trend toward smaller hotel spaces to expand to many other markets over the next few years.

A micro-hotel features 150-160-square-foot guest rooms with intricately designed custom layouts and high-end finishes...

Following in the design trends of the European and Japanese markets, the U.S. hotel industry has recently seen a sharp increase in the number of micro hotels in urban regions, initially with boutique hotels and more recently with larger operators. This trend is both design-driven and development-driven, as the design allows us to keep the overall operational cost down while increasing the number of rooms within a specific structure, thus increasing the financial success of the hotel.

The concept appeals to developers of ground-up hotels in large cities with high real estate costs, like New York. For virtually the same cost, hotel chains can develop and sell more hotel rooms within a smaller space and meet the ever-growing demand for lower budget rooms.

The market’s clientele is mostly composed of budget-conscious millennials and business travelers who are visiting urban areas with the intent of experiencing the city rather than spending much time in a hotel room. The user experience focuses on the same quality standards and high-end finishes that are expected in large branded hotels, but with the idea that the room is a functional space primarily for sleeping, within the larger oasis of the city. Micro hotel rooms are usually more economical than a typical hotel room, providing half the size but adding in comfortable common spaces outside of the room itself that influence the overall experience.

The user experience focuses on the same quality standards and high-end finishes that are expected in large branded hotels...

Although a fraction of the size, micro hotels typically contain the same amenities as a standard hotel room. The rooms contain queen-sized beds, quality linens and en-suite bathrooms and shower, but the reduced square footage of the room requires an open floor plan devoid of any wasted space. Hotels frequently incorporate frosted glass or some other design element to create a separation between the sleeping area and the bathroom, but the typical entryway of a standard hotel room is eliminated for space saving purposes.

The furniture for these spaces requires custom design as each element becomes multi-functional (e.g. a desk may serve as both a standard desk and vanity). Unlike larger projects that allow for some room for flexibility, these projects require caution, as every detail of the construction process from the walls to the furniture itself must adhere to the initial project plan or things simply will not fit. Our project managers rely on a hands-on management approach so that both the operator and developers are satisfied with a functional guest room.

This type of hotel also typically features a restaurant or bar equipped with Wi-Fi. The colorful and well-designed common spaces draw the visitors out of their hotel rooms and into the cities. Public spaces within the lobbies and on selected floors of these hotels invoke more interactions around the common areas and transform the nature of the hotel experience.

Due to the small footprint of the micro hotel rooms, they demand meticulous attention to detail on all ends of project management.

Due to the small footprint of the micro hotel rooms, they demand meticulous attention to detail on all ends of project management. These projects are best executed by a firm that offers true hospitality project management services and tangible experience controlling and delivering micro hotel construction projects within the contracted budget and schedule.

Faithful+Gould’s ability to minimize risk while maintaining the utmost levels of quality to deliver a project stems from years of experience. Our team has the necessary knowledge to anticipate and prevent typical problems that might occur over the course of a project that could have adverse effects on the schedule and budget. The average time frame from start to completion is 18-24 months, and the level of coordination required from the start of design through construction completion is far greater than in other projects since these spaces have less actual square footage than typical hotel rooms. Our project managers must constantly mediate between the construction managers, the architects, designers and hotel operator to oversee that every detail is according to the initial design.

The overwhelming success of the micro-concept hotel in the boutique market will undoubtedly been seen in major U.S. urban areas over the next few years. The mutual benefits for both developers and major hotel chains will add to the demand of this concept and will likely transform the hotel industry across the country. Faithful+Gould’s experience in executing micro-hotel projects makes us the ideal firm to help clients deliver a high-quality hotel experience in half the square footage.