Strong growth in the Australian tourism market resulted in Otago accommodation providers recording a 13% increase in international visitors in February this year.
The increase is expected to be used by providers to regain some of the profits lost during tough times last year.
Figures released by Statistics New Zealand this week showed guest nights in Otago increased 21,000, or 5%, in February compared with the corresponding month last year.
The region also recorded a 13% increase in the number of international guest nights as 33,000 more visitors came compared with February last year.
Queenstown again led the charge for Otago, as guest nights in the resort were up 19,000, or 8.8%.
International guest nights were up 17.8% to 177,881 in the same month.
Destination Queenstown (DQ) chief executive Tony Everitt said the results were fantastic on the back of what could have been a tough season.
DQ marketing to the international market, particularly Australia, had proved successful, he said.
Looking ahead, the outlook was positive but accommodation providers still needed to be a "little cautious" heading into the low season.
Hospitality Association of New Zealand chief executive Bruce Robertson said "any increase in nights is a positive indicator" and believed strong growth in the Australian market was behind it.
The increase was needed to provide "return in yield" lost during the recession.
Room rates would return to what they were pre-recession in response to this, so guests could expect to pay a bit more, he said.
New Zealand Hotel Council chairwoman Jennie Langley said there would not be as many package deals in the market because of the increase in demand for rooms.
Figures for the period from December to February were "significantly higher" than predicted, she said.
Tourism Dunedin chief executive Hamish Saxton said tourism operators were reporting high performance during February while Queenstown had a "stellar month".
As Dunedin had not been victim to a plague of empty beds, he expected room rates to remain stable.
Nationally, guest nights increased 2%, or 3.3 million, and international guest nights increased 6%, or 94,000, in February compared with the same month last year.
