Capsule hotels are a cheap alternative to expensive accommodation in London for office workers.
Sawdah Bhaimiya
Workers who have moved out of London for remote work are under pressure to return to their office in the city, with some opting to stay overnight in Japanese-inspired sleeping pods for as little as £30 ($40).
I traveled to Piccadilly Circus in the heart of London to spend a night in a newly opened capsule hotel after two of my colleagues who live outside the city recommended I stay there.
The Zedwell Capsule Hotel, a Criterion Capital brand, opened in September and features nearly 1,000 capsules measuring 1 meter long, 1 meter wide and 2 meters deep – probably the smallest hotel rooms in London.
Although it's located in the historic London Pavilion building, originally built as a music hall in 1885, it looks rather unassuming from the outside. The entrance is around the corner from the busy train station and is accessed through some black doors.
Private sleeping capsules side by side at the Zedwell Capsule Hotel in London.
Sawdah Bhaimiya
According to real estate company Knight Frank, the cost of a hotel stay in central London is staggering, averaging £265 per night in the third quarter of 2025. In comparison, the average daily rate at hotels across Europe was 125 euros over the summer, according to an analysis of over 600,000 reservations from 2,000 independent hotels by RoomRaccoon.
Halima Aziz, head of hotels at Criterion, told me that the capsule hotel fills a gap in the market between budget hostels and affordable accommodation.
“We've created that sweet spot between the two. We're not a budget hostel. We're not going to pay you £15 for a bunk bed in a steel room,” she said.
“When we decided to do capsules we really took inspiration from Asia and the capsule concept came about in Japan in response to very similar pressures we face in London.”
In Japan, the first capsule hotel was built in the city of Osaka in 1979, primarily as a low-cost overnight option for salarymen who worked long hours and preferred to stay out to drink and socialize rather than spend more money on the ride home.
As a result, a number of capsule hotels have emerged in New York, from sleep pods at Kama Central Park to Nap York, a sleep station with private capsules for short naps or overnight stays.
Now that the concept has arrived in London, I was keen to see for myself what the UK version had to offer.
In a sleeping capsule
In a sleeping capsule at the Zedwell Capsule Hotel in London.
Sawdah Bhaimiya
It's a Monday evening and instead of my usual home office routine of preparing to go into the office the next day, I crawl into a brightly lit sleep pod.
I pull down the garage-like shutters and lock them from the inside as I prepare to sleep. My head is just a few inches below the ceiling of my capsule, which has a light dimmer, two coat hooks, an air purifier, a wide mirror that extends along the top of the capsule, and charging ports.
Even though I feel my luggage – a backpack and a shopping bag – at the foot of my bed and the bottom of my coat hanging on the hook, I am surprised at how comfortable and cozy the bedding is.
I turn off the lights and the loud air purifier and am surrounded by pitch black silence. It feels scary, but with nothing to distract me, I quickly fall asleep.
Each capsule is 1 meter long, 1 meter wide and 2 meters deep.
Sawdah Bhaimiya
Earlier in the day I checked in at one of the hotel's four kiosks, and as I strolled through the hotel I noticed that the walls were painted black to match the exterior – and that there wasn't a single window in sight.
I drove to the first floor and used a key card to gain access to my female dormitory. My capsule was one of seven capsules stacked side by side or on top of each other, some of which were only accessible via steps.
A female-only dormitory at Zedwell Capsule Hotel.
Sawdah Bhaimiya
I learned that despite the low initial cost, there were a range of additional amenities that guests could pay for, from an extra £10 for accommodation in a female dorm, to £8 for a padlock, to £15 for secure luggage storage.
The hotel seemed unfinished. The entrance was covered with scaffolding and a faint sound of drilling could be heard from inside the building.
That's because it's “still a work in progress,” Greg Walsh, Zedwell's general manager, told me. The drilling noises came from underground, where a larger reception was being built with a direct connection to Piccadilly Circus Station.
CEO Aziz confirmed that the building was not yet finished, adding that the additional cost of the women's dorms was largely due to improved amenities, including a towel in the cabin and a women-only beauty room with hairdryers – although this is still under construction and currently inaccessible.
“At the end of the day, if you don't just target the traditional hostel market and want to expand access, you have to respond to people's needs, and people have needs for laundry, for beauty, that are not normally taken into account,” she added.
As I explored the building, I found communal toilets and showers playing classical music, as well as vending machines at reception selling snacks, drinks, slippers and eye masks, among other things.
I went out for dinner and with Oxford Circus, Leicester Square and Covent Garden all within walking distance it wasn't hard to keep myself entertained.
The Zedwell Capsule Hotel is located on Piccadilly Circus in London.
Sawdah Bhaimiya
The workers return to the city
During my time at the hotel, I discovered that I was one of the many professionals in the building. I spotted several guests arriving in suits, ties and briefcases. One chef from Newcastle even told me that he paid a total of £284 for a two-week stay at the hotel to work in London.
During the Covid-19 pandemic, many office workers in London moved away from the city, where it was cheaper to rent or own a home, as remote and flexible working options became the norm.
“The cost of commuting from Oxford, Cambridge and city centers not accessible via the London Underground system is quite high.”
Halima Aziz
Head of Hotel Division at Criterion
A 2021 City Hall report said it was likely that London's population had declined during the pandemic. The number of employed people in London fell sharply by November 2020, by around 210,000. The report said flexible work arrangements made moving out of the city easier.
The trend continued and in 2022, 43% of UK commuters lived more than 30 minutes from their place of work, driven by higher property prices in central areas, according to a report from commercial property firm CBRE, which surveyed over 20,000 people worldwide.
Additionally, CBRE found that 41% of people worldwide plan to move to more remote locations either in the same city or to a different city in the next two years.
However, 2025 has seen a sharp pullback in remote working offerings as major companies from HSBC to JPMorgan, Amazon, Salesforce and John Lewis enforce a return to the London office.
A typical dorm room with about a dozen capsules at the Zedwell Capsule Hotel.
Sawdah Bhaimiya
Zedwell's Aziz said one of the hotel's core demographics is young professionals and hybrid workers who use Zedwell as a “base in the city” due to their flexible work patterns that require being in the office a few days a week. About 20% of the hotel's customers are company employees, Aziz said.
“The cost of commuting from Oxford, Cambridge and city centers not accessible via the London Underground system is quite high,” she said. “Our product is often cheaper than the commute or overnight trip home.”
The return-to-office mandate has resulted in workers who don't live in cities looking for cost-effective ways to stay in the city without resorting to unattractive options like dormitories.
“Where traditionally they wouldn't consider a hostel product, we found that they would actually consider a capsule hotel because it offers them privacy,” Aziz added.
As a Londoner, the commute to the office usually takes just over 30 minutes, so the hotel doesn't offer much convenience for me, but I can see the appeal for those staying further from the city.
When I woke up in the morning, I almost forgot that I wasn't at home in my bed. After a quick shower, I got ready in my capsule before heading out and joining the crowd of commuters in central London.