The Otago accommodation sector has checked in big with occupancy rates, having recorded the largest increase in guest nights for the whole country, with its hotels leading the way.
Nine out of the 12 regions recorded more guest nights in March this year compared with March 2009, with Otago again leading the way, Statistics New Zealand said.
Otago recorded the largest increase of 27,000 (up 7%) guest nights in March, compared to a national increase of 3.3 million (up 2%).
Queenstown, Wanaka, Waitaki, Dunedin and Clutha all recorded increased guest nights, with Queenstown up 8.8% and Dunedin up 3.5%.
Across the country, international visitor nights contributed 1.6 million guest nights in March, an increase of 42,000 (3%), with the South Island accounting for 57% of total guest nights.
Otago recorded 25,000 (10%) extra international guest nights, the only double-digit increase in the country.
Three of the four accommodation types recorded an increase in guest nights in March, with hotels up 49,000 (4.6%), holiday parks 17,000 (2.9%) and motels 13,000 (1.3%). Backpackers recorded the only drop with 5000 (down 1.1%).
New Zealand Hotel Council chairwoman Jennie Langley said the increase in Australian visitors had helped the sector overcome a difficult 2009.
With new hotels planned for both Queenstown and Dunedin, it would take a while for the "extra inventory to be absorbed", but the sector would be assisted by a growing tourism market, she said.
Hotels would not enter a market unless they were confident it would be a success, she said.
"They are expensive to build and expensive to run. You don't go into [hotels] unless the long-term outlook looks good."
On Tuesday, it was announced the former chief post office in Dunedin was to be developed by Distinction Hotels owner Geoffrey Thomson.
The Hilton hotel group has also confirmed it is planning opening a hotel in Queenstown at an as yet unconfirmed site.
