Figures from a Statistics New Zealand accommodation survey released this week show occupancy at Otago's hotels, motels and backpacker accommodation was 63.9% in January - up about 50,000 guests (5.2%) from January last year.
Nationwide, occupancy fell by 183,000 visitors (4.2%) to 4.2 million, compared with January last year.
Statistics New Zealand industry and labour statistics manager Blair Cardno said guest nights in the South Island fell 5.5% from January last year, the 18th consecutive monthly fall, and North Island guest nights also fell, by 3.3%.
Otago had the largest increase and was the only South Island region to record a rise. The increase was wholly due to domestic rather than international visitors, he said.
For the second time in the past 18 months, occupancy in Otago's motels and hotels outstripped Auckland's. Auckland generally has the highest occupancy rate in the country.
"Otago had the largest rise, due to an increase in Kiwi visitors.
"This is only the second time in the past 18 months that Auckland has not had the largest month-on-month regional increase, and both of these times Otago took the top spot."
Mr Cardno said the Canterbury region had the largest regional decrease (123,000, down 19%), due to the ongoing impact of earthquakes in the Christchurch area.
New Zealand Hotel Council Southern Lakes regional chairwoman Penny Clark said warm, dry weather drove the increase in domestic visitors to Otago.
"It's amazing what the sun can do in Otago when the rest of the country is wet.
"Kiwis went to play where it was sunny. Everyone in Queenstown had a very good month in January.
"I would have thought Wanaka was similar," she said.
Tourism Dunedin chief executive Hamish Saxton said Dunedin accommodation providers did not fare so well.
Guest nights were down 5% (81,463 room nights) in the city.
He believed much of the increase in occupancy in Otago was driven by increases of 7.2% in Queenstown (19,000 room nights), 23% in Wanaka (23,000 room nights) and 11% in Central Otago (8000 room nights).
Many of the visitors were people from Christchurch, taking a break from post-earthquake life in Canterbury, he said.
"Certainly, we've been seeing good numbers out of that region."
Mr Saxton said he would like Dunedin to have done better at attracting some of the Canterbury visitors in January.
Although occupancy at hotels in the city was up 6.6%, occupancy at motels was significantly down by 14.6%.
Otago Motel Association president Richard Hanning said occupancy in Dunedin was generally lower in January, and the sunny weather in Central Otago had lured potential visitors away from the city.
"I'm not surprised by the figures."
However, he said an improvement in the global economy meant motel bookings for the months ahead were looking good.
Holidays were the first thing to get deferred when finances got tough, he said.
"There is a settling down of the global economy. It's definitely improving."
