The south-west has lost its crown as Britain’s favourite holiday destination

The UK’s domestic tourism industry has been in steady decline for two decades but the pace of collapse has become acute since the pandemic. Recent NEF analysis showed that the number of nights spent on domestic holidays declined 5% last year, and has fallen 21% since 2022.

For generations, the south-west has occupied a special place in the nation’s heart. Dozens of seaside towns, from Bournemouth to Penzance on the south coast and St Ives to Weston-Super-Mare on the north coast have been a magnet for holidaymakers coming from across the country. The region has offered classic family holidays, rural retreats, festivals… and often better weather.

But our new analysis shows that the south-west has been the biggest loser in a national shift in travel habits. The latest data suggests that in 2025, the south-west lost its status as Britain’s favourite summer holiday destination by trip numbers – ending a reign that, in all likelihood (because data is scarce), has lasted generations. In 2024, it lost its status as recipient of the most domestic summer holiday spending. On both trip and spend metrics, the south-west has lost more than a third of its market share over the past decade and has been replaced by London. On only one metric — the total number of nights stayed — does the south-west maintain top spot, but this too is falling fast.

Figure 1: The south-west has seen its summer holiday market share slide rapidly since 2015

Market share of UK regions in domestic summer holiday (Jul-Sep) trips in 2015 compared to 2025

Figure 2: London has overtaken the south-west as the biggest recipient of tourism spending

Market share of UK regions in domestic summer holiday (Jul-Sep) spending in 2015 compared to 2025

While almost every region (bar London) has lost out over the past decade, the south-west has suffered greatest because of the nature of the shift. Demand for short city breaks has held up better against the pressure of competition from international destinations. Regions with major airports (mainly London and the south-east) have even benefitted directly from outbound travel, as passengers stay overnight on their way in or out of the country. The decline of seaside, countryside and small-town holidays has been steepest, particularly in the least accessible parts of the UK. The next biggest market share losses were experienced by Yorkshire and the Humber and Wales, while Scotland has also slipped down the rankings.

The pivot away from the coasts and into major cities is damaging for some of the UK’s most deprived communities, moving jobs and spending out of the areas that need them most. But it is entirely predictable. The sweetheart deal enjoyed by the UK aviation sector, which is backed by tax reliefs and widespread airport expansion, will always result in one of two possible outcomes. At best, it swaps domestic spending in small towns for international visitor spending in London and the south-east — because that’s where international visitor spending is concentrated. At worst, it leads to a net loss of spending thanks to the UK’s £50bn+ international travel spending deficit.

Set against the government’s strong support for outbound tourism is a raft of cost pressures faced by different parts of the domestic tourism economy. Recent changes to business rates, employer national insurance, and energy bills have all increased pressure on the hospitality industry. The spectre of a new nightly visitor levy has also caused concern. While these recent pressures are not the core driver of a decline that has sustained for two decades, most of them do warrant policy attention. Not least the high cost of energy and the anti-investment incentives baked into the current business rates system.

Meanwhile, our rail network has not exactly made it easier for people to choose to holiday in the UK. Above-inflation fare rises, service cutbacks, and infrastructure improvement delays have all hurt the competitiveness of the domestic tourism offering. Ultimately, most seaside and rural destinations have enjoyed nothing like the level of political support offered to airports when it comes to their transport infrastructure in recent years and the result is clear.

Only a transformative policy package, significant investment spending, and political leadership can bring back the Great British holiday. Despite a stated intention to do so after the Covid pandemic, the last government failed miserably, delivering an acceleration in the decline. With the USA’s illegal attacks on Iran disrupting global air travel markets, and UK consumers cutting their air fare spending, we are reminded of the importance of a strong locally-rooted economy, capable of weathering international storms. We should act now to lock-in a long-term shift back to the British coast.

Image: iStock