Last night roads in much of the central city were closed to traffic and barriers were erected in preparation for the laying of a 500m red carpet along Courtenay Place leading to the doors of the Embassy Theatre ready for the movie's stars and its maker, Sir Peter Jackson.
Sir Peter is expected on the red carpet at 4.30pm and the film's screening will start shortly after 7pm.
An extra 45 police officers have been brought in to help with the expected crowd.
There will be a live feed of the event on a large screen in Waitangi Park, where a Hobbit Artisan Market has been set up.
An i-SITE spokeswoman said almost all hotels and motels had been booked since the end of last month, with only a handful of places coming free after a few cancellations.
Those wanting accommodation were having to go to Hutt Valley and Porirua because there was nothing left in the city.
Many travellers visiting the city had left accommodation bookings too late, as they weren't aware of the event, and were unable to book the places they had wanted, said the spokeswoman.
Prime Minister John Key yesterday dismissed suggestions competing with other countries on tax incentives for films would help ensure future big budget movies are made in New Zealand.
His comments came after Sir Peter Jackson told Radio New Zealand more might need to be done to attract future movie deals.
* Visit nzherald.co.nz later today for full coverage of The Hobbit red carpet and premiere. Live updates will begin at 12pm and a live stream of all the action will start at 3:50pm.
