With Early Success Of Chinatown's Pod Hotel, Modus Looking To Open Second D.C. Location

Visitors have been staying in Chinatown's new micro-hotel for about two months, and the owners of the Pod DC are so pleased with its early success they are looking to open a second iteration of the brand as soon as they can find a site. 

After seeing the success the Pod brand had in its first two locations in New York, the concept's creator, BD Hotels' Richard Born, partnered with Conrad Cafritz and Cafritz Interests subsidiary Modus Hotels to launch an expansion.

After getting a deal under contract in Chicago that ultimately fell through, the team decided to take the brand to another city with a large international audience, Washington. The team broke ground on the project at 627 H St. NW in June 2015. 

Modus Hotels CEO Aaron Katz believed the concept would be well-received in D.C., especially in the bustling Chinatown neighborhood. The project is a block and a half from the arena where the NBA Wizards and NHL Capitals play, Verizon Center.

Katz said the Pod filled up faster in the first month than any hotel he has ever opened. 

During the first month after its May 4 opening, while the hotel's amenity spaces and three food and beverage options were still under construction, Pod DC achieved roughly 80% occupancy, Katz said. 

"Eighty percent in the first month blows away our projections," Katz said. "We thought it would take a longer time to ramp up."  

For newly developed hotels, the average upscale brand nationwide achieves about 53% occupancy in its first month, according to a study by hotel market research firm STR. The study, which measured 46 new upscale hotels throughout the country, found it typically takes until the third month to reach 80% occupancy and more than a year to reach full stabilization. 

And the main selling points for the Pod, the socializing spaces, are just beginning to open. The first of three food and beverage options, the first floor Crimson Diner, opened last week. The rooftop bar, Crimson View, will open the week of July 10 and the downstairs Crimson Whiskey Bar will open late summer. The three venues, created by D.C. restaurateurs Ian and Eric Hilton, will all be open to the public.

"What does that portend for the future? Lots of very good things," Katz said. "We did that [occupancy] half under construction and without food and beverage or public space in a building and a brand that’s designed to be experiential. So we haven’t even started."

The hotel concept offers 150 SF rooms, roughly half the size of a typical U.S. hotel. Rooms start at $109 per night and they aim to keep rates about 80% of the neighborhood average. This gives the owners a better return per square foot than their nearby competitors, while guests get a cheaper option if they are willing to sacrifice some space. 

"The Pod is not about small rooms that are cheap," Born, the brand's creator, said. "The Pod is about an efficient and intelligently designed space. What you sacrifice in real estate you gain in quality and experience." 

Born is preparing to open Pod's third and fourth New York hotels in Times Square and Brooklyn's Williamsburg neighborhood. 

The hotel has rooms with double beds, queen beds and even bunk beds. Each room has its own bathroom and many have small desks. The rooms also have televisions that allow guest to plug in and stream content from their devices. 

The rooms were designed by New York firm Stonehill & Taylor. Each room features photographs of various D.C. neighborhoods taken by Pixellab Photography & Design.

Katz said the concept is perfect for travelers, who would rather be meeting people in a bar or exploring the neighborhood than in their rooms. Many of the guests so far have been millennials, as Katz expected, but he said people of all ages have embraced the concept. 

"The thing we were surprised by most is the affluence of people who had come in," Katz said. "We’re getting a well-heeled customer. That speaks to the fact that value works for everybody, not just those on a budget." 

The key to succeeding with a micro-hotel like Pod, Katz said, is the location. The hotel sits across from Gallery Place, which is consistently one of the busiest Metro stations in the nation's third-busiest public transit system. 

"In order to be successful in a small format hotel, you really need a location that is going to be accessible to all major public transit routes for the many people coming in that don’t have a car or are trying to get around on a budget," Katz said.

Cafritz and Katz are currently designing another Pod hotel in Philadelphia they expect to break ground later this year. After seeing the early success of the Pod DC, the team is actively looking for a site to create a second Pod in the District. 

Katz could not say what neighborhoods he is exploring, but he said he is looking for another vibrant area with access to public transit. 

"I would close on a deal tomorrow if the right site came up," Katz said. "It's simply a matter of finding the right location. When we find the right location we think fits the requirement of what it takes, and as soon as we get our hands on that, we’ll be onto Pod DC 2."

CORRECTION JULY 8, 1:50 P.M.: A previous version of this story stated that the Pod DC was D.C.'s first micro-hotel. The Hotel Hive micro-hotel by Abdo Development was actually the first when it opened in Foggy Bottom in January. The story has been updated.