Shipping container hotels: Pop-up hotels filling a niche

Spending the night in a shipping container doesn't sound appealing, but these mobile crash pads are popping up at the summer's biggest events, discovers Simon Usborne

The shipping news: a typical Snoozebox construction (Snoozebox)

For a select few fans of colonial-era sports attending the Commonwealth Games in Glasgow, home is a windowless metal box on a derelict former gasworks. The converted shipping containers appeared in just five weeks on Dunn Street, offering tiny hotel rooms to non-claustrophobic guests and boosting the profile of a man more used to spacious – and fast – living. Snoozebox hotels have become a familiar sight this summer at events as varied as Glastonbury and the Edinburgh Festival, trading on a traditional shortage of accommodation as well as the profile of the company's president, David Coulthard. The former Formula 1 driver helped launch the firm in 2012. After negotiating some financial chicanes, it is now flying.

Used containers, which are imported from China, are converted to include four air-conditioned rooms, each with a front door that lets in at least some daylight via a frosted glass porthole. Up to three people may occupy a double bed and single bunk above, sharing an "en suite wet room shower".

Coulthard, who retired from F1 in 2008, has for years been linked to the hotel trade, often investing large parts of his on- and off-track millions into new projects. In 2001, he joined forces with Ken McCulloch, who had founded the Malmaison hotel chain, to buy a modest property in Monaco, where Coulthard has one of his several homes. They turned it into the swanky Columbus, the sale of which in 2010 reportedly earned the driver £30m.

The new Glasgow site includes 80 rooms but the company nearly missed out on the event after confusion about the planning status of a temporary hotel. A separate clash with Games organisers required a last-minute name change to agree with branding rules (the place is now simply called Snoozebox Glasgow, with no mention of the Commonwealth). The unusual nature of the business has caused bigger problems still. Last year, its founder and chief executive Robert Breare stood down after the company surprised investors with a profit warning. Breare, who died suddenly last July, was a serial entrepreneur who had been inspired to launch Snoozebox after a miserable camping experience at Le Mans. He opened his first 40-room hotel at the 2012 British Grand Prix, which is where Coulthard came in.

Early signs were positive but profits suffered as a result of "uncertainties" over expected revenues from a deal to accommodate G4S security staff during the 2012 Olympics Games. Contracts since with Glastonbury as well as Edinburgh's Festival Fringe and the Ryder Cup at Gleneagles have helped turn the business round, despite tariffs as high as £2,000 for five nights at Glastonbury.

David Morrison, the company's chairman, admits rooms are compact at best. "You're not going to wish to sleep there 365 nights on the trot, but it takes a bit of time before the feeling that this is a small place takes effect." He says that the pop-up hotels fill a big niche between local hotels that can be booked up years in advance, and camping.

"Even when things were not all that great last year, what kept us going was the level of demand we've seen. We've had incoming demands from over 40 countries. We're launching a new generation of room in autumn this year. Once we've proved the economics of those, the story is how rapidly and sensibly we can scale the business."

Snoozebox is far from alone in realising the potential in used shipping containers. The steel boxes have been adapted for uses as varied as cafes, shopping centres, classrooms in the developing world, lavatories, indoor gardens and disaster shelters. The trend can partly be explained by a global trade deficit. Containers that arrive full from Asia often go back empty. It can be cheaper, therefore, to flog them and buy new containers in, say, China. Something to think about when you wake up from a nightmare in which the walls are closing in.