The amount of money Britons spent on holidays at the seaside, countryside and small towns in the UK has fallen sharply over the past year despite having the hottest summer on record.
Research by the New Economics Foundation reveals a £1.8 billion drop in spending on staycations in these areas in the 12 months to the end of September, compared with a year earlier.
The number of overnight stays by UK holidaymakers has fallen by 14 million over the period, meaning a decline of almost 65 million nights since 2022, the think tank said.
Alex Chapman, a senior economist at the think tank, said: “To see such a striking decline in domestic tourism despite the hottest and sunniest year on record is grim evidence of government policy failure.”
Chapman pointed to higher costs and tax reliefs for air travel for driving British holidaymakers abroad.
In the aftermath of the pandemic, the UK staycation market boomed amid tighter international travelling restrictions and cost of living pressures, providing relief to hospitality and tourism businesses that had been hit hard by Covid.
A recent report from Visit Britain highlighted how reliant hospitality sectors in the regions outside the big cities are on domestic tourism. For example, three quarters of overnight tourism spending in the southwest came from domestic visitors in 2024.
According to the tourism board, a total of nearly 1.2 billion domestic visits were recorded in 2024, with 91 per cent of these being day visits — an 11 per cent decrease from 2023. The report put the decline down to a combination of cost of living pressures and increased competition from international destinations.
A beach hut on Mersea Island in Essex
ALAMY
In November, the government announced plans to give mayors in England the power to impose levies on international and domestic visitors staying in hotels, hostels, guest houses, holiday lets and bed and breakfasts. Analysis from UKHospitality estimates that the tax will cost the public up to £518 million in additional tax.
After warnings of mass closures and job losses as a result of rising business rates bills coming in April, the chancellor offered pubs an immediate package to curb rates rises for the sector by 15 per cent. However the rest of the hospitality industry, including hotels, restaurants and nightclubs have been excluded from any relief measures.
Last week The Sunday Times reported that Heathrow was in line for a discount of nearly £900 million on its rates bill over the next year, representing a fifth of the £4.3 billion of relief set aside by the chancellor, fuelling further backlash from hospitality bosses.
Chapman said: “We need wholesale reform of business rates, taxing land hoarding instead of investment, and devolving power and money to local communities. We also need to stop subsidising air travel, and instead direct tax revenues to revitalising our historic destinations.”