Matamata Public Relations Association manager Sue Whiting says the organisation will be upgrading facilities to create a 'Hobbit-like feel' before the cast and crew arrive.

Ms Whiting said she believed the Welcome to Hobbiton sign is the most photographed in the country, and sculptures of Lord of the Ring characters had drawn hundreds of people, so it is important to maintain them.

"At the end of the day, it is all about bringing people to Matamata and creating a reason to visit. These visitors have dropped millions into the Matamata community so we want to ensure the town looks clean and tidy, just like the Shire."

Matamata-Piako District Council Mayor Hugh Vercoe said the council made an annual grant of $50,000 to the association to provide visitor services, and would assist with further upgrades.

"Council has identified the need to upgrade Hetana St to a modern streetscape," he said.

"This work is estimated at $450,000 and there is nothing in the 10-year budgets to undertake the work; however, with the anticipated increase in visitor numbers because of the filming, we are now proposing to include $450,000 in our budget for next year to allow the beautification to take part."

Each year the council plants the Broadway roundabout and other areas to complement the Matamata Floral Festival. Mr Vercoe said this year's planting would be timed for maximum colour and appearance during the filming of The Hobbit.

About 1.5 million people have used Matamata's visitor centre since 2002 because of the town's association with the Lord of the Rings franchise. About 200,000 people visit the centre each year, well up on the pre-2002 average of 50,000. Said Ms Whiting: "We understand the number of people who have come to Matamata because of the Lord of the Rings trilogy, so we are completely committed to ensuring that we gain worldwide attention again through The Hobbit."

The association is partner to an economic development report which will identify the exact level of economic benefits that the town has enjoyed and will continue to receive through its links with the LOTR trilogy and The Hobbit.