What is a capsule hotel? Capsule hotels originally debuted in Osaka, Japan, in 1979 to provide efficient, inexpensive accommodation. Each guest gets an individual capsule that typically measures about seven feet long by four feet wide and a little over three feet tall. Traditional capsule hotels stack sleeping bunks two tall and side-by-side, meaning you can have dozens of capsules in one big room. As capsules generally only have a pull-down shade or curtain for privacy, guests are typically assigned a locker for valuables.