Vancouver City Council to consider encouraging new pod hotels

Could the Japanese solution of small overnight accommodation options help fill the gap in supply and dearth of affordable hotel options?

Next week, Vancouver City Council is expected to approve a member motion calling on City of Vancouver staff to explore the possibility of amending various policies and development requirements that would help catalyze pod hotels.

Originating from Japan, pod hotels are known for providing highly affordable overnight accommodations within very small capsule-like bed configurations, often within a stacked/bunk configuration. Similar to a hostel, the pod hotels’ toilet, shower, dining, lounge, and other amenities are shared amongst the guests.

In recent decades, pod hotels have also been established in high-demand tourist hotspots elsewhere in Asia and Europe, especially in destinations where real estate for hotel development comes at a premium. As well, such an accommodations typology also reduces expensive operational labour requirements.

Some local examples of pod hotels include the 2018-opened Pangea Pod Hotel, which replaced strata residential uses in the core of Whistler Village with 88 private sleeping pods after a $10 million renovation, and the 2019-opened Panda Pod Hotel in Richmond City Centre, where a retail space previously used as a thrift store and condominium presentation centre was transformed into 64 sleeping pods.

Pangea Pod Hotel, Whistler. (Daily Hive)

pod hotel

Pangea Pod Hotel, Whistler. (Daily Hive)

On Google Hotel’s reviews, both properties — deemed to be three-star calibre hotel accommodations — have favourable guest ratings, with Pangea Pod Hotel holding a 4.7/5.0 rating based on over 1,400 reviews to date, and Panda Pod Hotel earning a 4.3/5.0 rating based on over 300 reviews to date.

Nightly rates this weekend at these pod hotels in Whistler and Richmond start at $59.00 and $89.00, respectively, which amounts to just a small fraction of the rate of traditional three-star hotel properties.

Pangea Pod Hotel was deemed as Canada’s very first pod hotel, while Panda Pod Hotel is the first of its kind in Metro Vancouver.

According to Panda Pod Hotel’s website, it has served over 30,000 guests since it opened five years ago, and it is looking to perform an expansion with addition locations through a franchise model. Its pod hotel model “offers cost efficiency with lower construction costs, space optimization, higher revenue potential, and a lower initial franchise fee compared to traditional hotel franchises.”

Panda Pod Hotel richmond

Panda Pod Hotel, Richmond. (Panda Pod Hotel)

Panda Pod Hotel richmond

Panda Pod Hotel, Richmond. (Panda Pod Hotel)

Panda Pod Hotel richmond

Panda Pod Hotel, Richmond. (Panda Pod Hotel)

The motion by ABC city councillors Sarah Kirby-Yung and Lisa Dominato would also direct City staff to specifically explore simplifying the ability to convert existing office space into pod hotels. According to the city councillors, the Vancouver Building Code currently requires cost-prohibitive full-building upgrades for such a change of use, while other British Columbia municipalities under the BC Building Code demands simpler “project-based building structural upgrades for life safety and seismic hazard.”

City staff would analyze temporary, pilot, or permanent pod hotel uses in existing office spaces.

“Smaller room hotel accommodation (for example, ‘pod hotels’) can meet the near-term (as well as longer-term) demand for affordable, high-quality, and well managed overnight accommodation as part of Vancouver’s hotel room mix, and reduce the immense pressure for short-term rentals on Vancouver’s limited rental housing stock,” reads the motion.

The City recently approved some applications to build new major traditional hotels, and it is in the midst of reviewing various proposals. But it is increasingly highly unlikely that any of these brand new purpose-built hotels will be ready in time for the 2026 FIFA World Cup, when demand is expected to skyrocket.

Furthermore, according to a report by local tourism bureau Destination Vancouver in early 2023, it is estimated 20,000 additional hotel rooms are needed across Metro Vancouver over the coming decades, including 10,000 within Vancouver where demand is highest and 10,000 elsewhere in the region outside of Vancouver. The hotel room shortage is expected to begin during the peak season in 2026 within Vancouver, and quickly grow to other periods of the year and other parts of the region over subsequent years.

Furthermore, hotel room rates — even for lower-tier accommodation options — have steadily skyrocketed due to high occupancy rates and a lack of competitive supply.

It should be noted that Destination Vancouver’s estimate was made prior to the provincial government’s announcement towards the end of 2023 on new short-term rental restrictions.

However, Kirby-Yung and Dominato believe pod hotels created from converted office space can “help fill the gap, support innovation, and provide a more affordable visitor accommodation option, leading up to and in time for FIFA 2026 and beyond.”