Nestled in a relatively quiet east Amsterdam neighborhood, a new kind of hotel has been racking up occupancy rates topping 90 percent for the past two years.

Zoku is a modern take on the extended-stay hotel, where the visitors stay in fully outfitted micro-hotel rooms of 260 or 320 square feet (24 or 30 sq m) and relax and connect in the common areas on the top floor.

User testing of six prototype spaces directly informed how the Zoku project took shape. “We knew people would love it by the time we opened,” Hans Meyer, Zoku cofounder and managing director, said at the ULI Netherlands conference in Amsterdam in May.

Located in a former office building, Zoku houses 133 rooms in which every square centimeter of space is put to use. The stairs to the loft where the bed is located slide into the wall when they are not needed, and drawers and cabinets are packed into every space, making the small room feel surprisingly airy. The central feature of the room is a table large enough for four people to gather—rare for such a small hotel room. Guests can swap out the art in their room for communal art on the walls in the hallway.

Rather than having the lobby on the ground floor as most hotels do, Zoku created an open communal space on the top floor that feels like a very large living room. “Hotels bring people together, but [the [guests] hardly ever interact,” Meyer said. Creating a community where people can feel at home and make new connections is the whole point of Zoku, which takes its name from a Japanese word for family or clan.

Nearly 40 percent of the bookings are for traditional hotel stays of four days or less; the rest are split between short-term stays of up to a month and long-term stays of more than a month. Though satisfied guests ask if they can live in Zoku for longer periods, that is not allowed under the current hotel zoning, though it is a concept Meyer and his team are investigating. High property prices and increases in single-person households in European capitals such as London, Berlin, and Paris make the communal living concept attractive.

Zoku occupies half the building; the other half is occupied by shared-workspace company WeWork, a fitting neighbor. When Zoku first opened, the top-floor lobby was open to the public, but it quickly got too crowded. Now nonresidents can pay €25 (US$30) for a day pass that includes the lunch buffet, or buy a monthly coworking pass for €149 (US$175) to be part of the scene. Some events such as regular jazz nights are still open to the public.

As is the case in many European cities, the tourism industry in Amsterdam has boomed in the past decade, leading to hotels operating at near capacity. At the same time, the city government has announced it will lower the number of nights residents can rent out their apartments on portals such as Airbnb from 60 per year to 30, putting even more pressure on the hotel market.

Unlike Zoku, traditional hotels can often feel impersonal and overly formal, Meyer said. “This is more like staying in a friend’s home. As people stay longer, they start to feel like they live here,” he said. “One guy who’s staying here a long time—when he goes to the bar, he picks up empty glasses on the way.”

The Zoku team aims to have 50 of its hotels open around the world in the next decade. Meyer said the next two European locations will be announced later this year once the permits come through. Zoku is also exploring locations in the United States. Meyer prefers to renovate existing buildings for the character they offer, as well as the accelerated timeline: once the permits come through, his team can have a new hotel ready for guests in 12 to 15 months.