Once the domain of Japanese salarymen crashing after a night of partying in Ginza or gap-year European student travelers traipsing around the world on a shoe-string budget, the micro-hotel concept seems to be sweeping the hospitality industry, and though it may be a bit early to call, this trend could pay big dividends to travel affiliates.

Many hospitality industry gurus are high on the micro-hotel model: Tom Botts, who covers the hospitality industry at consulting firm Hudson Crossing said “It’s certainly the right product for the times,” while Bjorn Hanson, a long-standing industry expert now with New York University’s Tisch Center for Hospitality, Tourism and Sports Management says that interest in the US micro-hotel model has intensified as the economy has weakened.  Based on TravelDividends’ research, it’s not just the U.S. that this phenomenon is growing.

From the canals of Amsterdam to the bank-lined streets of Basel, to London’s bustling Heathrow Airport, the booming cities and towns of the Malaysian archipelago, or Akihabara, Tokyo’s electronic discount store and Anime Mecca, the ‘hotel room that’s the size of a suburban bathroom’ is sweeping the budget sector of the hospitality industry (and since we mention bathrooms, it should be noted that in many of these properties, the bathroom is public and shared).

Take the aptly named Pod Hotel in New York City; a 64 sq foot room equipped with a free wireless, flat-screen TV, an mp3 or iPod docking station and an in-room safe starts as low as $69.00 per night.  Larger rooms are available, but of course you must pay more; for a room with a queen -size bed, private bathroom with rain-head shower, sink, and WC, expect to pay around $199.00, which is still dirt cheap by NYC standards!

The Jane Hotel, another New York City micro-hotel which extols all the efficiencies of the lodging niche but cleverly mixes in an ambiance that is straight out of a classic schooner of yore, offers 50 sq. ft. “Standard Cabins”, each fitted with a single bed, luggage rack, free wireless internet, telephone with voicemail, 23″ LCD TV, DVD player, and iPod dock. And yes…all the Standard Cabins share the communal bathroom located on each floor.  For those who are willing to ‘splurge’, The Jane has 150 larger rooms, called “Captain’s Cabins” that include private bathrooms and have a nice view of the Hudson River.

Want to sleep cheap in London?  Try the easyHotels which are scattered throughout the city.  The brainchild of legendary cheapo travel magnate Stelios Haji-Ioannou, the founder of easyJet Airlines, rooms at these budget-beaters can be had at around $60.00, which for London is outrageously inexpensive.  Looking for airport accommodations? Then the Yotel Hotel chain might be your answer, with airport hotels at London Heathrow and Gatwick airports as well as Amsterdam Schipol Airport, with their “cabin rates’ starting at around $38.00 per night.  It’s also important to note that Yotel cabins can be booked in increments of four hours, so a getting some shut-eye over a long layover is no longer an expensive option at these three leading European airports.

A bit more expensive, but also offering a more of an extended-stay hotel type ambiance and less of a claustrophobic experience, Base2stay Hotel in swanky Kensington, London may be the answer for many travelers. The guest rooms at the Base2stay provide kitchenette, microwave, fridge & kettle, as well as air conditioning (which is not a standard feature in many London hotels) as well as state of the art communication, including a flat screen televisions with satellite channels, films, music and free internet access.

How successful are these hotels?  Well, according to recently published reports, occupancy rates are “hovering near 90%” at New York’s The Pod, while easyHotel’s London properties are experiencing rates of 80% or more.

Each of these hotels we profiled, as well as a growing number of other micro-hotel players like Qbic Hotels in Europe, Tune Hotels in Malaysia and Capsule Hotels in Japan provide a great product with lots of value for the budget minded and thrifty traveler.  However, TravelDividends likes Base2Stay Hotel best for the simple fact that it sells it’s product through the travel affiliate channel.

TravelDividends believes that unlike some of its competitors, Epoque Hotels, the brand that promotes Base2Stay and other luxury boutique and one-off hotels, is ahead of the pack when it comes to using the travel affiliate marketing channel as a key element of a hotel’s distribution strategy.  Epoque is generally acknowledged as offering one of the highest hotel affiliate commission rates in the hospitality industry, and because their lodging products are focused on a “luxury collection of design and boutique hotels,” travel affiliates tend to generate higher conversion rates through Epoque’s hotel affiliate program than with competing brands.

TravelDividends thinks the micro-hotel model will grow (we are big proponents of travel niches) and that the hotels and chains in this promising sector will follow Epoque lead and distribute through travel affiliates.  We also believe that travel affiliates can help their own cause by contacting The Pod Hotel, The Jane Hotel, Qbic Hotels, Tune Hotels and Capsule Hotels and urge them to offer a travel affiliate program.

Let us know whether you agree on both counts…we’re always interested in hearing your views! You can contact us anytime.  Thanks!