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.