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Capsule Hotels in London

E-gad! The world is really shrinking. London's radical innovation in hotel rooms shrinks the price of hotels, along with the room to a 10' x 10' space. While targeting business travelers now who need to rent a room for a few hours in between flights (or during flight delays) or for the night on a lay over, what's to stop other hotels from shrinking space for regular vacationers?

Yotel Hotel, the company making this move, has a quote on their site from CEO Gerard Greene saying, "A wake up call for the hotel industry. We have been bold enough to take steps that no other hotel has taken before, allowing us to offer luxury accommodation at an affordable price." For now, these mini-hotel rooms ("capsule hotels" as Diversion Travel labels them, but Yotel calls them cabins) are slated for Gatwick and Heathrow airport areas in 2006 and then in London proper for 2007.

I'm curious what others think of this phenomenon. I can see it being useful for the business traveler, but I wouldn't want to stay in a shoebox while vacationing. My guess is they would arrive as an efficiency technique, at a reduced price, but then shortly thereafter, regular "big rooms" would increase in price because they'd be relatively "spacious" when compared to a 10' x 10' space. Too skeptical?

Gadling raves about it. I do have to admit when having a long layover in London on international flights, it'd be nice to have a luxurious place to chill, iPod lulling me to sleep.