A record-setting surge of about 2850 Dunedin tertiary students will graduate this month, generating "fantastic" benefits by sparking higher demand for hotel beds and restaurants, and boosting the economy.

The previous record for the largest number of people graduating in person from the University of Otago and Otago Polytechnic in December was more than 2600, in 2016.

More than 2440 Dunedin tertiary students graduated in person from the two institutions in December last year.

Overall, Otago University graduation numbers rose about 90 from last year, from 2532 to 2625, including a rise of about 50 in people graduating in person.

But most of the huge rise in overall December numbers has been generated by the polytechnic, where overall graduation numbers are expected to rise massively from last year’s December record of 1463 to about 2200.

This includes about 800 people graduating in person, up heavily from 644 last year.

The first two of eight Dunedin tertiary graduation ceremonies this month will be held by the University of Otago at the Dunedin Town Hall today at 1pm and 4pm.

Otago Polytechnic external relations and communications director Mike Waddell said the big rise in polytechnic graduation numbers was "a very positive outcome for the polytechnic and the city".

The polytechnic was providing "tremendous benefits" for the city, including by providing skilled staff who could contribute strongly to city businesses and to the overall economy.

The polytechnic was a successful "innovative organisation", which was helping to counter some marked shortages in particular skills in the city, and throughout the country, Mr Waddell said.

"I think it’s fantastic for the city," Otago Peninsula Trust marketing manager Sophie Barker said of the graduations.

She believed that the Government’s policy of fees-free first-year tertiary studies was contributing to the overall tertiary growth.

Many graduates also liked to show their out-of-town parents around Dunedin attractions, including the Royal Albatross Centre, this month, she said.

Otago Chamber of Commerce chief executive Dougal McGowan said the high graduation numbers reflected "the strength" of the city’s two main tertiary institutions and their "tremendous value to the city".

A key challenge for Dunedin in the future was to attract as many graduates as possible to continue to live in the city, or to return in the future, to help meet some of the city’s key workforce challenges, including the need for more construction workers, he said.

Otago University will hold two more graduation ceremonies next Wednesday and next Saturday, and next Friday the polytechnic will for the third time hold two ceremonies.

Enterprise Dunedin director John Christie said the rising graduation numbers reflected "just how strong our tertiary sector is", and the high quality and success of both the university and the polytechnic.

The outcome also reflected "increasing demand for tertiary education qualifications".

john.gibb@odt.co.nz