New data from Tourism WA shows the Busselton and Margaret River regions have experienced a spike in overnight visitor numbers for the year ending June 2019.
Registered Accommodation Providers of the Margaret River Region spokesperson Debbie Noonan said the latest figures had given their industry hope they might have a brighter future.
Accommodation providers in the region had experienced a downturn partly caused by the popularity of online booking sites.
Some booking sites allow unregistered accommodation providers to list their entire homes for short stay accommodation.
A parliamentary inquiry found there were at least 20,000 short-term rentals in WA listed online with a majority being unhosted accommodation.
Ms Noonan said since the findings from the inquiry were released and the ATO announced it would hold Airbnb legally accountable to supply data, there had been a drop in the number of entire house listings on the booking platform.
"The upturn in tourism numbers combined with a downturn in Airbnb listings from 1552 to 1396 in the City of Busselton and 1020 to 919 in the Augusta Margaret River Shire would contribute to a brighter future in the region," she said.
"I believe there are pockets of the industry which are now seeing an increase in business.
"It has been reported Busselton businesses had a same or slightly better year to date, while our Margaret River businesses had still reported a downward trend."
Margaret River Busselton Tourism Association joint chief executive officer Steve Harrison said they initiated their own visitation and spend survey after noting not all members were feeling the benefits of tourism growth.
"The pattern we are seeing emerge through these surveys is that around one third of members are performing substantially better than the same period the previous year, and one third are performing significantly worse," he said.
"This is not a normal pattern, as we would expect the majority of businesses to see figures which are close to previous years, with smaller percentages at the plus and minus ends of the range."
Mr Harrison said the flattening of that normal response curve is likely indicative of supply outstripping demand in some sectors of the industry.
"Demand (visitation) has been rising but supply, especially in sectors such as accommodation and tours, has been rising faster.
"This creates a situation of increased competition and customer choice.
"A further inter-related factor is the changing expectations of visitors, which include their preferred methods of booking, time constraints and the way in which they plan their holiday online."
MRBTA has also identified an increasing need to assist businesses to survive and prosper in challenging times.
"During 19/20 we are putting additional resources into opportunities for information, education, training and mentoring," he said.
"This will have to be responsive to individual needs and circumstances.
"To assist with this work, we are delighted that Pip Close will be available to bring her unparalleled knowledge and expertise to assist MRBTA members over the next six months."
WA HomeStay director Amanda Walker said intrastate visitors were their main market.
"Historically, on average 80 per cent of visitors to the South West are from intrastate, which is why we focus our marketing campaigns on West Australians via social and local media," she said.
"The South West is a long time favourite for West Australians.
"With money being tighter, I am not surprised that there has been an increase in domestic visitors."
For the entire South-West, Tourism WA reported 87 per cent of the 3.2 million people who visited were from WA and the total spend (including domestic and international travelers) was calculated at $1.7 billion.
In Busselton, domestic overnight visitors (which include both those living within WA and interstate) jumped 9.2 per cent with 881,000 people opting to stay compared to 807,000 in the previous year.
The number of international overnight visitors slightly declined by 2.4 per cent dropping to 51,800 from 53,100.
In Margaret River, the number of international overnight visitor numbers jumped 18 per cent, with 102,000 people staying compared to 86,600 for the previous year.
Domestic visitors jumped 3.4 per cent in Margaret River going from 580,000 in 2018 to 600,000 for the year ending June 2019.