Car rental and tourism operator Jucy has opened a "pod hotel" in Queenstown aimed at millennial travellers in a city feeling the squeeze from the tourism boom.
Jucy said the five-storey, 276-bed hotel was expected to provide relief from a worsening shortage of accommodation in the region.
Chief executive Tim Alpe said the latest government figures showed the town's rapid tourism growth was accelerating.
"At its current rate of growth, Queenstown will receive three quarters of a million tourists in just over a year's time - more than a fifth of the total number of visitors to New Zealand annually," Alpe said.
"In February this year, hotel occupancy rates in the area were at 94 per cent and supply shortages have led to price increases. The last thing we want to see is this impacting on the country's reputation among international tourists," he said.
"The expansion of Jucy Snooze into Queenstown is designed to meet the needs of the millennial traveller - who are particularly vocal on social media, and our new offering is expected to help provide support for the tourism brand."
Rooms accommodate eight travellers in a "bunk room" style configuration, with guests able to make private, individual sleeping spaces by closing blinds. The new accommodation would be a mixture of pods and private rooms with en suites.
Technology would enable visitors to self check using a terminal in the lobby or a smartphone app which could also be used to unlock rooms, which also had USB chargers, free Wi-Fi and storage lockers.
Most of the pod units would be priced from $45 with private rooms starting at $130 during the high season, and rates reduced for off-peak travellers.
"We believe the pod hotel concept will offer a low-cost alternative for the budget tourist, whether it's a backpacker or a couple," Alpe said.
The company launched the micro accommodation concept first in Christchurch and also operates the Jucy Snooze brand in Auckland.
The hotel would provide employment for about 30 local staff and the company planned to expand the concept to other locations across New Zealand and Australia.
Alpe said the pod hotels could also help meet demand from short-term workers.
"There is some indication that rental accommodation prices are also on the rise as local landlords move to a more lucrative short-stay rental model," he said.
"The new hotel is centrally located which cuts down on transport costs and may make it more economical for workers wanting a short-term solution whilst looking for a room."