A capsule hotel is an accommodation operation where each guest sleeps in their own lockable pod equipped with lighting, a power socket, ventilation and typically secure storage. Shared facilities — bathrooms, a lounge, a kitchenette — reduce operating costs per square metre compared to a conventional hotel. The model generates passive income once established, but the setup phase is capital-intensive and time-consuming. Startup capital runs into hundreds of thousands of pounds, and the operation requires a team and property management. Suitable for investors with access to the right location and sufficient initial capital.