More visitors are heading to Rotorua, giving the local economy and accommodation sector a substantial boost - but one local expert says it can still be hard for lodgings to make a healthy profit.
Statistics New Zealand's Accommodation Survey revealed guest nights in February this year increased 6.5 per cent from February the previous year, from 179,280 to 190,945.
Rotorua Association of Motels chairman Barry Mabey said it was still hard to get good returns in the sector.
"It has been a struggle for accommodation providers to make a healthy income because of the [state of sector].
"A number of hotels are offering discount accommodation which affects the sector but hopefully that will self correct as we get busier," he said.
Guest arrival numbers increased 9 per cent, jumping from 102,775 in 2014 to 112,052 in 2015.
The survey records the number of guests staying in hotels, motels, backpacker accommodation, and holiday parks in New Zealand each month. Each guest night is equivalent to one guest spending one night at an establishment.
Mr Mabey said Rotorua had been "rediscovered" as a destination by New Zealanders and was getting busier.
"I think there has definitely been more international tourists and probably the destination is getting more light from New Zealand visitors as well.
"It was certainly a good start to the year and the summer was good. There was definitely an increase in overseas tourists," he said.
Hotels were also seeing a boost in occupancy rates, which is being attributed to major events like Crankworx and Chinese New Year.
Statistics from the Tourism Industry Association, which has 10 member hotels in Rotorua, shows occupancy rates are up for the first three months of 2015.
Tourism Industry Association hotel sector manager Sally Attfield said it had been an excellent start to the year for Rotorua hotels.
"In addition, the Pete's Dragon film production has contributed more than 4400 room nights to four of the major hotels in Rotorua, with a similar number in other local accommodation options. This included extensive food and beverage spends," she said.
In the first three months of 2015, the association's 10 Rotorua hotel members enjoyed 87.3 per cent occupancy, up 6.7 per cent on the same period of 2014. This puts Rotorua hotels above the national occupancy level of 85.1 per cent.
Nationally, guest nights were up 5.4 per cent in February this year compared with the same month in 2014, marking the 11th consecutive month of rises.
Guest nights were up for all four accommodation types in February 2015, compared with February 2014. Hotel guest nights were up 4.9 per cent, motel guest nights up 5.9 per cent, backpacker guest nights up 1.1 per cent while holiday park guest nights were up 8.4 per cent.
Chief executive of Tourism New Zealand, Kevin Bowler, said a growing market of international visitors and the worldwide popularity of the Hobbit films had contributed to a boost in New Zealand's accommodation sector.
"You can see in the data that the international guest nights are the fast growing area. They are up 8.6 per cent and what we are seeing is an increase in arrivals from a lot of different markets."
"Arrival growth right through summer has been very strong and that has driven the commercial accommodation numbers up.
"The emergence of a stronger middle class in developing nations like China and India and then the halo effect of the Hobbit films have also had an impact," he said.