New Zealand's tourism sector is bracing for a tough year as the credit crunch catches up on consumers and fewer foreigners book holidays.
Overseas visitor arrivals dropped by less than 1% last year, a smaller drop than expected given the global economic turmoil.
In the month of December, visitor numbers hit a record high for a single month of 322,200, an increase of 2% compared with the December 2007.
ASB Bank economist at Jane Turner said the strong result was because tourists had booked their holidays months ago, and fewer are likely to book ahead in coming months.
Tourism New Zealand is expecting visitor arrivals to continue declining this year, predicting a drop of about 10%.
Many tourism operators said low budget travellers have been making up a large proportion of their business in December and January.
However, overall bookings appear to be slowing down towards the end of March, they say.
There were 2.459 million visitor arrivals during 2008 - with a record number from Australia.
Fewer people from from Korea, Britain and Japan visited New Zealand, and the average length of stay fell to 22 days.
