While the industry could expect a difficult few years because of the international credit crisis, there was no reason why the province could not increase visitor numbers, Tourism Futures International managing director Bob Cain said.
Increasing the frequency of transtasman flights to Dunedin was one way to double numbers, but this was now a difficult proposition for airlines, facing high fuel prices and an economic crisis.
"Without these, I would have expected an increase in flights by now."
With fewer travellers from long-distance markets expected, the region would need to increase numbers domestically and from across the Tasman in order to manage the downturn.
Having been involved with Dunedin since the inception of Project Gateway, Mr Cain said initially there were not enough tourists to justify expansion into the Australian market.
"I interviewed people in the [Australian] travel trade and they didn't know much about Dunedin and had negative things to say, such as, `It is too cold.' But those who had some knowledge of the city were quite positive."
Since then, Tourism Dunedin had marketed the city to Australian tourism operators.
"What Dunedin has done over the last decade is push itself up to a new level."
As a result, an increasing number of Australians were aware of Dunedin's reputation as a university town with a rich cultural history, historic buildings and an abundance of wildlife tourism activities, he said.
"It is attraction-rich here: in a small travelling distance, you have a wide range of attractions."
A key component in that awareness had been transtasman flights, and the number of international visitors was increasing by an average 14% each year.
Australians accounted for a third of all visitors.
Mr Cain said he would like to see the percentage of Australians travelling here increase to 35% but for the number to be "double the size it is today".
More flight connections to Dunedin were needed, so visitors did not have to depart New Zealand from other airports in other regions, he said.
While Queenstown remained a high-profile destination for Australians, it did not have the same potential for growth because of its smaller residential population.
"Half of passengers who arrive and depart are Dunedin residents.
You don't have that in Queenstown - that is a limitation."
With a weakening Australian dollar, New Zealand remained an attractive option for Australians who still wanted an overseas experience at an attractive price.
