
Matamata is the town closest to the sheep station where Hobbiton was built and filmed. The contract the film company signed with the owners of the station included restoring the site to its original state. When filming was completed they started restoring the site, but rains interfered.
When they came back several months later to complete the job, the owners had had enough requests to see the site that they had rethought this restoring business! They opened quite a thriving little tour business that's booked out of the Info site, and the town makes the most of it.
Here's Terry at the info site where we bought our tickets.

The sheep station is just gorgeous; looks like a big green lawn with Hobbit holes, just like the movies. Sans a few gardens and such. This is part of what's left. Where the original holes are no longer there, such as Sam's house, they've put up pictures from the movie.

Bag End's hillside.