A room is seen inside China's first capsule hotel in Shanghai February 23, 2011. The rooms can comfortably fit most Chinese guests as the no-frills capsules measure 2.2 meters (2.4 yards) in length, with a height and width of 1.1 meters (1.2 yards). Each capsule room is equipped with electrical sockets, adjustable lights, clocks with alarm functions, television sets and internet services.

SHANGHAI - Fire authorities in Shanghai denied certification for China's first capsule hotel, refusing to issue a license due to fire and personal safety concerns.

Though acclaimed for its ingenuity in housing budget-conscious travelers in limited spaces at cheap prices, Xitai Capsule Hotel, which is located near the city's railway station, was found to have used flammable materials during construction, said the local fire department.

Furthermore, inspectors said that the average space for each guest, which is measured at 2.4 square meters, did not meet the city's basic requirement for renting houses and may pose difficulties for emergency evacuation.

Modeled after capsule hotels in Japan, the 300-square-meter hotel consists of 68 "capsules," or "coffins" as critics called them. Each capsule is simply equipped with bedroom facilities, and costs a basic 28 yuan (the price of two McDonald's burgers) for 10 hours.

The lavatory and shower facilities are shared -- the hotel is only opened to men. It has also set aside an area for snoring guests.

Ta Zan, the owner of the hotel, said that without a license, he had never booked a guest since construction was completed last October.

"We've only seen curious visitors, but not a registered guest," said Ta.

Ta regretted the denial of a license, but said that he would not give up the idea of opening capsule hotels in China.

Capsule hotels first became popular in Japan as cheap overnight accommodation for low-income earners and travelers. Xitai is the first such facility opened in China.