More than a million holidaymakers came to Scotland in January, according to the latest figures.
Scotland is bucking the UK tourism trend
It represents an increase of 8% on last year, boosting tourism income by 20%.
Tourist body VisitScotland said more Scots and English visitors are taking shorter breaks at home, which is helping compensate for the decline in overseas tourists.
The reluctance to travel abroad, particularly by Americans, has starved the industry of vital revenue since the terrorist attacks of 2001.
This year, the outbreak of war and the Sars virus has compounded that reluctance.
The industry's really grasping the nettle, working harder together and that's the future
Scottish tourism businesses have had to turn to markets closer to home and the new focus appears to be paying off.
The first figures from VisitScotland for 2003 show that the number of overnight stays and short breaks is up and generating more income compared with last year.
VisitScotland Chief Executive Philip Riddle believes it represents a turnaround in fortunes.
"We're seeing better direct access, we're seeing some new routes opening up, we're seeing some new events coming in and that's very important for us.
"Most of all I think we're seeing much better partnership amongst the industry, the industry's really grasping the nettle, working harder together and that's the future."
And Scotland seems to bucking the trend, as domestic tourism in the UK overall has fallen.
John Lennon, from Glasgow Caledonian University's Moffat Centre for tourism and business, thinks there is great potential.
"Realistically you have to look to be a hero in your own back yard," he said.
"The Scottish and English market are there - they're waiting to be tapped into, 48 million English people not very far to the south of us, with budget airlinks and a reasonable road network into the country."