Airport chief executive Steve Sanderson said the number of passengers to pass through Queenstown airport fell to 684,331 in the 2008-09 financial year, from 700,640 the year before, a decrease of 2.3%.
He said 4132 flights passed through the airport last year, a decrease of 1%.
International passengers were up 19.7% to 74,538 and international flights were up 20% to 330.
International flights were on average at 77% capacity, on a par with the year before.
"I'm very happy with the international figures," he said.
Australians were choosing to take short-haul holidays to Queenstown rather than long-haul trips, because of the recession, he said.
He said 609,793 domestic travellers passed through the airport, a decrease of 4%.
The number of domestic flights fell 3%, to 3802.
He said the gap between Qantas dropping two flights in autumn and the addition of Jetstar in June could explain the dip.
Mr Sanderson said 20% more flights were diverted or cancelled because of adverse weather at Queenstown or other airports, or engineering faults.
A total of 219 flights, carrying about 21,000 passengers, were diverted or cancelled during the year.
"The weather was more adverse than last year, somewhat explaining why our domestic numbers are down," he said.
The coming year was looking positive, he said.
Air New Zealand and Qantas had put on extra flights for summer and Pacific Blue would be flying two weekly Sydney flights from September.
Destination Queenstown chief executive Stephen Pahl the figures were consistent with trends throughout New Zealand.
"New Zealanders are not travelling," he said.
Destination Queenstown would focus on the domestic tourism market to attempt to pull back the decline, he said.
He wanted to focus on attracting business conferences to Queenstown to boost domestic traveller numbers.
"I'm keen to stimulate a greater demand out of Auckland over the next 12 months. It's a good opportunity for Queenstown to develop that business more aggressively over the coming year," he said.
He was not surprised by the increase in international visitors, given investment in the transtasman marketing campaigns.
"It's a result not only the airport but the Queenstown community should be proud of. It's a result of hard work by the tourism industry and airlines," he said.
Destination Queenstown was devoting 50% of its marketing budget to the Australian tourism market for the coming year.
