Big-city hotel rooms are about to get even smaller. Commune Hotels & Resorts, a San Francisco-based hotel group, is launching a new hotel brand that caters to guests who don’t need spacious rooms: those who want to embrace “micro-living.” Playing off the popularity of tiny house and micro-apartment living, Tommie hotels feature 160-square-foot guest rooms designed for travelers who don’t plan on spending their vacation holed up inside.

With the first two hotels planned to open in New York City this summer and in 2016, Tommie is sort of the American equivalent of Japan’s capsule hotels, where guests sleep in coffin-sized modules placed in a wall. The average size of a room will be 160 square feet, smaller than the key on a basketball court. These hotels are designed to provide a top-notch hotel experience, but not one that happens within your room. Instead, the emphasis is placed on common spaces where guests can gather and meet each other. The model seems sort of like a really, really expensive hostel (but at least you don’t have to share a bathroom). Is this just a clever way to get people to shell out more money for less space in pricey real estate markets?

Tommie is targeted at “someone who is interested in experiences,” says Commune CEO Niki Leondakis (we hear that makes you happy, anyway). “They’re more socially curious–they like to interact with other guests.”

Leondakis places the appeal of micro-vacationing in the context of changing attitudes, saying that “more and more people today have a feeling that they want less.” She goes on: “People don’t want excess anymore, and they don’t want clutter.”

But it’s also just a good business plan. With smaller rooms, hotels can fit more guests into the same amount of building, leading to higher value per square foot for the developer. It’s no surprise that microhotels are also in the works in other U.S. cities with notoriously expensive real estate, like D.C. and Boston.

You can’t just shrink the average room size and expect guests to flock.

However, you can’t just shrink the average room size and expect guests to flock. Tommie hotel rooms feature customized furniture–like a desk that folds up into the wall, much like you would find in a tiny home–that fits into the space efficiently. Guests can personalize their rooms through complimentary items in the hotel general store, like fresh flowers or a throw blanket in the color of their choice, or choose to keep their room clutter-free and minimally decorated.

And because the developers have a higher profit margin with more rooms, they can feature luxury design at a not-so-luxury price. “Because the square footage is so limited, you can afford to use beautiful and more-expensive materials,” Leondakis says. “We’re able to provide the enhanced guest experience.” At Tommie Hudson Square, opening in lower Manhattan this summer, this will include a library, a rooftop bar, a listening room, on-site classes, and more.