The disappearance of the Great British holiday

With beautiful, sandy beaches from Great Yarmouth to Blackpool through Newquay and Scarborough, stunning walks in the Brecon Beacons, Peak District and Yorkshire Dales, buzzing cities like Brighton, Liverpool and Glasgow, the UK has an absolute abundance to offer people on their holidays. But even with 2025 being the sunniest year on record, new NEF analysis shows the UK’s domestic tourism industry was in steep decline, with coastal and countryside destinations facing the biggest collapse.

In 2021, as the Covid-19 pandemic slowed down and life began returning to normal, the government set out its plans for the future of the UK’s domestic tourism industry. The ambition was to ​“embed domestic travel as a sustained behaviour”, ensuring that people who took domestic trips during the pandemic ​“do so again and again”. This blog evidences the government’s failure to deliver on that goal, a failure which has led to a storm of despair for Britain’s ailing hospitality industry.

Using VisitBritain’s Great Britain Tourism Survey, we find that the number of nights people spent on overnight leisure trips declined by 5% between 2024 and 2025, a fall of around 14 million nights. Since 2022, 75 million nights have been lost, a fall of 21% (Figure 1). In 2025, real (i.e. inflation-adjusted) spending on overnight domestic tourism was down 8% (£2.6bn) compared to levels in 2022 ). The sector’s decline is worse still when considered against the backdrop of a growing population.

Figure 1: Nights (left) and money spent (right) on domestic overnight tourism by GB residents, 12-month rolling totals by quarter

Source: NEF analysis of the Great Britain Tourism Survey, trips for a business purpose are excluded, spending is adjusted to 2025 prices using the ONS CPIH inflation index

The declines have not been evenly spread. The fall in activity is far greater on the coast, in small towns, and in the countryside. The number of leisure nights spent in these three destination categories declined by around 30% (65 million) between 2022 and 2025 (Figure 2). Real (i.e. inflation-adjusted) spending in these destinations was down 25% (£4.6bn) over the same period, while cities and large towns saw an increase in spending of 14% (£2.1bn). In only 12 months between Q3 2024 and Q3 2025 seaside and coastal destinations, many of them among the most deprived parts of the UK, lost £640m in domestic tourism spending, shedding £1.4bn since 2022.

Figure 2: Spending on domestic overnight tourism in £millions, by destination type, 12-month rolling totals by quarter

Source: NEF analysis of the Great Britain Tourism Survey, trips for a business purpose are excluded, spending is adjusted using the ONS CPIH inflation index

The trends described — particularly in the period between 2022 – 2023 — may have been impacted by the legacy of the pandemic. Pent-up demand for international travel may have affected the trend. However, with the post-pandemic economic recovery long since complete, recent changes are eye opening. Moreover, the figures presented are ​‘propped-up’ by an increase in spending in the UK by households who are on their way out of the country, for example, a family that stays overnight in Essex the night before a flight out of Stansted. Without this category, classed ​‘UK stay as part of outbound’, the spending decline on coasts, in the countryside, and in small towns would have been even larger, at 29% (£5bn).

For the declines described above to take place in 2025, the same year the UK saw its hottest and sunniest year on record, reflects years of government neglect of the UK’s domestic tourism industry. The latest debacle with business rates, which has left the wider hospitality industry out in the cold, is just the latest example. For years the tax system has penalised hospitality and leisure, destinations have been starved of investment, and road and rail transport costs have risen fast. In contrast, the outbound tourism market, principally the air travel sector, has enjoyed generous tax breaks and sustained political support for airport expansion. The large business rates discount recently extended to Heathrow airport is the latest example.

Sticking plasters, like the business rates discount offered to pubs and music venues, will not solve the systemic problems facing high streets,hospitality and domestic tourism. Wide reaching reform is needed. We could start by replacing Business Rates with NEF’s twin proposal: a new, much lower, property tax, that is fully devolved to local decision makers; and a tax on land owners, that incentivises investment instead of land-hoarding. NEF’s proposals would create a more redistributive system, lowering the burden on high streets and hospitality in held-back areas, like many of our once thriving coastal destinations.

We also need to tackle the other side of this equation. The under taxation of air travel, offered through exemption from VAT, fuel duty, and effective carbon taxation, sends the wrong message to households, encouraging them to spend precious disposable income overseas instead of on highstreets and in domestic tourism. The money raised by properly taxing air travel, up to £6bn by our calculations, could be used to directly cut the cost of domestic holidays, ensuring that fulfilling domestic holidays remain affordable. In addressing the struggles of the UK economy in 2026 we should consider not just how much money households have to spend but where they are spending it.