Sydney opens Australia’s first capsule hotel

Sydney is now home to Australia's first capsule hotel boasting rooms of 1.2 metres by two metres for just $50 a night.

A phenomenon in Japan since the late 1970's, the hotel is regularly used by business people on the run or travellers on a budget.

One guest told 7 News it feels a bit "like being in a car".

The room is 1.2 metres by two metres. Photo: 7 News
The room is 1.2 metres by two metres. Photo: 7 News

"You have your own little air vents and your own things," he said.

"I've been here for two weeks now and I really enjoy it - you have your own space and it's really quiet," another guest said.

Located in the heart of Sydney's CBD, tourism operators are giving the idea their tick of approval.

The idea is similar to both hotels and backpacker hostels. Photo: 7 News
The idea is similar to both hotels and backpacker hostels. Photo: 7 News

"We need more in the budget category in the city," Carol Giuseppi from Tourism Accomodation Australia said.

"The occupancies for hotels are 88.5 per cent - we need diversity of product."

The idea has elements from both hotels and backpacker hostels.

Carol Giuseppi said the concept is needed in the hotel market. Photo: 7 News
Carol Giuseppi said the concept is needed in the hotel market. Photo: 7 News

And for some, the price is cheaper than a taxi home.

"We do get a lot of people checking in at night," Hotel Manager, James Oliver said.

James Oliver said many choose to stay at the hotel rather than get a taxi home. Photo: 7 News
James Oliver said many choose to stay at the hotel rather than get a taxi home. Photo: 7 News

While some might feel the space is too tight or that you could get trapped, Mr Oliver assures that can't happen.

"For example, if the power went out, the doors would release because they're magnetic lock," he said.

There's also the option to upgrade to a deluxe room that includes a queen bed, a bigger tv and a bigger door.