A new pod-style hotel is the first of a number of new ventures aimed at easing the accommodation shortage in Queenstown.
High prices and a shortage of beds has forced some tourists to think twice about staying in the resort town.
Jucy's Snooze pod hotel is a new budget offering for millennial travellers, with 250 beds all within walking distance of bars and shops.
Queenstown Mayor Jim Boult says the venture is "fantastic".
"Because they don't need a rental car to go anywhere. And getting vehicles off the road in our town is very important to us."
It is popular overseas, with travellers picking a pod from around $50 a night.
It is a shared accommodation billed as 'business class for backpackers' - each pod coming with a lockable safe and privacy shields.
Jucy Chief Executive Tim Alpe says it is fit for a range of travellers.
"Both your 18-35 traditional backpackers, but also to people a lot older than that who don't want to spend huge amounts on accommodation, are quite happy to be in shared accommodation but want their own privacy."
Mr Boult says it makes sense because "a lot of people spend less on accommodation, but they still spend on activities and food and wines and the like".
The price of accommodation is out of reach for some when the town is near capacity - but this latest increase in beds is good news for travellers.
Jucy Snooze is just the second new hotel in downtown Queenstown in the last decade, and more are on the way with another 54-bed hotel opening next month.