Developed in the UK, the first Yotel is due to open in May in the South Terminal of London's Gatwick Airport.
Entrepreneur Simon Woodroffe is behind the concept.
Woodroffe is Chairman and Founder of YO! Everything, a quirky conglomerate leveraging on the success of the successful YO! Sushi chain he founded in 1997.
Woodroffe claims: 'Yotel's innovative design with 10sqm rooms/cabins and internal rather than external windows allows it to go boldly where other hotels can't – tricky central city locations, airports, even underground.
'Reduced land costs add to Yotel's ability to provide affordable prices.'
Designed by Priestman Goode, which has worked with Airbus, the cabins come in two classes – Premium and Standard – and include features such as:
Techno wall with universal port for i-pod or MP3 player, workstation, flat screen LCD TV, free internet access, double beds, luxury bedding and bathroom fittings including rain shower, automated check-in, internal window and storage.
'We believe it is one of the world's most radical hotel concepts and will offer a solution to expensive and boring hotels around the globe,' Woodroffe says.
Pricing appears reasonable by London standards, although it does not look like such a bargain once the pound has been converted into Aussie dollars.
Standard will cost from A$128 (£55) while Premium Cabins start at A$194 (£80) overnight.
Cabins can also be booked in four hour blocks.
International expansion is on the cards but is not likely until at least 2008.
Cities the company has nominated are Amsterdam, Barcelona, Bucharest, Berlin, Copenhagen, Hong Kong, Singapore, Madrid, Paris, Rome and Sydney.