Capsule hotels, whose rooms have just enough space for sleeping and no more, were first started in Japan as a cheap way to house salarymen who worked too late or drank too hard to get home for the night. Today, they are low budget accommodation for travelers and renters alike.
The 300-square-meter (yard) Xitai Capsule Hotel is located close to one of Shanghai's busy railway stations and consists of 68 beds housed in rows of capsule-sized rooms.
Ta Zan, a 32-year-old Shanghai resident and owner of the hotel, said he was inspired to open it after staying and working in a capsule hotel during his university days in Tokyo.
I was quite interested in this concept. I thought if I wanted to start one, I would add my own ideas, he said.
The rooms can comfortably fit most Chinese guests as the no-frills capsules measure 2.2 meters (yards) in length, with a height and width of 1.1 meters (yards).
Each capsule room is equipped with electrical sockets, adjustable lights, clocks with alarm functions, television sets and internet services. Guests can use a shared toilet and shower facility, a guest recreation area and a smoking room.
The hotel is only open to male guests and Ta said he plans to separate the hotel into three zones according to the snoring habits of different guests, looking to group heavy snorers away from light sleepers.
We are targeting single travelers who are looking to spend less, about one-third or two-thirds less than the prices of a regular hotel, Ta said.
Room rates start from a basic 28 yuan ($4.22) per person for up to 10 hours with an additional hourly charge of 4 yuan ($0.60). The hotel offers a rack rate of 68 yuan ($10.24) for a stay of 10 hours and 88 yuan ($13.26) for 24 hours.
Room rates at regular hotels in Shanghai can range from between 100 yuan ($15) for a budget hotel to more than 1000 yuan ($150) at a five-star accommodation.
Ta hopes his hotel will be officially open in a few months' time as he works to complete the paperwork and inspections needed for such accommodations with the local government. Local media reported that the authorities are still considering his application, with concerns about fire safety and personal security risks.
Travelers at a Shanghai train station had mixed reactions.
If you book early at those budget hotels, you can get good rates of between 160-170 yuan ($24 to $26), said 27-year-old Zhou Kejun. If you pay 88 yuan, you still have to share living in those capsules.