The strong Australian dollar and low airfares have seen WA families take advantage of cheap overseas holidays instead of the traditional summer break in the South-West.
Holiday operators in Busselton and Margaret River are reporting vacancies during the usually frantic post-Christmas period.
Tourism WA estimated about 109,000 fewer West Australians visited the South-West, a 6.7 per cent fall, while total visitor numbers across the State fell 403,000, or 8.4 per cent to about 4.4 million people, in the year to September 2009.
Tourists spent $4.52 billion, or 9.6 per cent less, compared with the previous period.
Holiday operators in Busselton and Margaret River are still reporting vacancies just after Christmas and new year - once unheard of in what is typically the region's busiest season.
Tourism WA acting chief executive Stephanie Buckland said most of the fall was in domestic visitors.
Cheap air travel had contributed to an 8.4 per cent decline in West Australians holidaying at home, Ms Buckland said.
"We've seen an increase in WA holidaying overseas - as of 11.2 per cent at the end of June," she said.
"Here we are in this post global financial crisis world and we've seen an increase in people heading overseas and that's part of the reason why we've seen a decline in domestic growth, because people only have so many holidays.
"While low-cost airlines are bringing in new international visitors, they also provide a cheap access point across the world. The Bali holiday is the classic example, but also Malaysia and Phuket." Ms Buckland said this year had proved better than tourism operators had feared and pointed to an increase in international visitors.
"I think that most people look back on the year and think it hadn't turned out as badly as we thought it would," she said.
Augusta Margaret River Tourism Association chairwoman Rachel House said there were still some vacancies in the holiday hot spot period of January, "particularly among the higher-end properties".
Brookwood Estate general manager Gavin Cahill said anecdotal evidence suggested that many tourists and locals were heading overseas.
"We always hear that for what it costs to go to Margaret River you could go to Bali for four or five days," he said.
Break Beach Houses owner Amanda Fay said she had January vacancies for mid-range chalets in Gnarabup, where she was offering four nights for the price of three.
Bookings for the $350-a-night chalets - which sleep up to eight - were lagging for January, Ms Fay said."It's strange times," she said, noting that she would hate people to miss out on the region because of the price.