Chinese holidaymakers replaced New Zealanders as the largest group of international tourists to NSW in 2013.
As NSW looks back at the year that was, Premier Barry O'Farrell said tourism-related industries throughout the state have every reason to be optimistic about 2014.
The state has ended the year as Australia's most popular destination for both domestic and international visitors, with recent figures showing an 18 per cent increase in Chinese tourists.
"China has passed New Zealand to top the list of international tourists to NSW," he said on Tuesday.
In the past year, Chinese airlines had increased the frequency and capacity of flights to Sydney, bringing in tourism dollars.
The most recent International and National Visitor Survey showed Chinese tourists stayed a total of more than 11.6 million nights and contributed $1.4 billion to the NSW economy.
This was an increase of $178.5 million on the previous year, Mr O'Farrell said.
"We expect the trend to only gain momentum in 2014 so it should be a great year for our tourism operators, as well as hotels, restaurants, retailers and taxis."
Meanwhile in the year to September the state also experienced a 10 per cent increase in Australian holidaymakers, with spending up by 14 per cent.
