Domestic tourist spending was up 11 per cent to a record figure of almost $10 billion in the year to March 2012, according to a Ministry of Economic Development study.
The increase in spending from the prior year comes at a time when international travel has been under pressure due to the European economic problems and the impact of the global financial crisis.
Domestic travelers - New Zealanders traveling within New Zealand - spent $9.95b in the year, the ministry's domestic tourism survey showed.
MED's tourism research and evaluation manager Peter Ellis said it was a positive sign for the industry.
"Domestic tourism is slightly larger than international tourism here so while it's not export dollars, it's still very good for the firms selling these services," he said.
He added that it was not just obvious tourist activities like bungy jumping and the like but also their travel, accommodation, food and beverages."
Hotel occupancy did not benefit as much, despite the record spending. "Interestingly, it was not as positive as would have been expected from these figures," said Ellis.
"A reasonable amount of the increase in expenditure happened in non-accommodation areas."
Much of the increase could be explained by people visiting friends and relatives who did not require hotel accommodation but would spend in areas like stores, eating out and traveling.
The latest statistics show a continuing improvement in the domestic market after a slump in the 2010/11.
In total there were 18.2 million overnight trips and 32.4 million day trips during the year ending March 2012.
A total of 7.3m overnight trips were recorded for travelers visiting friends and relatives, 1m more overnight trips compared to the previous year.
Transport accounted for the largest increase in domestic tourist expenditure, at $3.4b in the year ending March 2012, up 10 per cent from the previous year.
Food and beverage spending was $2.6b, an increase of 12 per cent. Accommodation spending rose to $1.3b, up eight per cent from year ending March 2011.
The domestic travel survey is an annual phone survey of 15,000 New Zealand residents.