He said: “With proper Government attention and support the visitor economy will grow strongly over the next few years.

 

"But if market failure is allowed to continue and policy barriers are not addressed, the economic impact could be considerable.

“The recent fall in sterling and the approaching Olympics in 2012 give us a tremendous opportunity to promote Britain’s attractions as a destination to the world, provided we are given the appropriate financial tools and policy support, but the onset of the global recession makes our work and the support we receive from Government ever more critical.

“The world travel and tourism market is highly competitive, and Britain needs to invest and support this sector to maintain our market share.”

 

It followed the publication of report by business advisory group Deloitte which revealed that the total economic contribution of the ‘visitor economy’ to Britain is £114 billion, or 8.2 per cent of total GDP - higher than previous estimates since it takes into account the direct and indirect impact of travel and tourism in the economy.

The report, jointly commissioned by VisitBritain and the Tourism Alliance, revealed that the sector directly employs more than 1.3 million people.

It predicted that the sector’s economic impact could grow to £188 billion by 2018 although still accounting for around eight per cent of GDP.

 

The London Olympics in 2012 in particular is expected to provide a significant boost to tourism and travel revenues.

But the report details a number of risks, including the “very real potential” for a recession in 2008 and 2009 and a further increase in international competition.

Deloitte highlights a number “market failures and policy barriers” that it says “could prevent the visitor economy from optimising its potential”.

These include a lack of information about what is on offer for visitors, skill shortages, transport difficulties and overcrowding.

The report also points to areas where Government policy could also risk the success of the visitor economy, such as transport infrastructure investment, the high cost of taxes and visas to enter the UK and climate change legislation.

While the report examines the long-term potential of the visitor economy and presents the possible impact of the global recession, VisitBritain is calling for more immediate action through a public-private partnership and fund to promote Britain’s value for money in a spring campaign.

It will take advantage of hoteliers and carriers delivering offers as well as sterling depreciating against both the United States dollar and the Euro and remind Britons that holidaying at home supports UK jobs.

Deloitte suggests that - although the longevity and depth of a recession remain unclear - over the next three years, ‘Gross Value Added’ for the visitor economy could be £11 billion lower with 114,000 fewer jobs created as a result of the global economic downturn than would otherwise have been the case.

The report comes as the British Tourism Framework Review (BTFR) is nearing completion.

 

The Government review is leading to a restructuring of VisitBritain to separate VisitEngland with its own chief executive.

Rodrigues said: “We believe the BTFR, when complete, will go a long way to support the industry but no single organisation can do it alone.

 

"There needs to be wide-ranging backing from the highest levels of Government for the visitor economy to achieve its potential.”

Rashid Bashir, author of the report and a senior economist at Deloitte, said: “The visitor economy is critical to Britain and should not be taken for granted. 

“Neglecting the travel and tourism sector could lead to competitive disadvantage and diminished economic outcomes for UK PLC.

 

"The current downturn highlights the need for a diversified economy to maximise employment and enterprise opportunities for people at all skill levels.

“Effective support and investment now will position the sector to take advantage of the next upturn, which could gain extra momentum from London 2012.

 

"Combined, these two factors could act as a major boost to the UK economy.”

Liberal Democrat Culture, Media and Sport spokesman Don Foster said: “This report shows the enormous value of Britain’s tourism industry.

“Tourism should be boosted by the 2012 Olympic Games but Ministers are in grave danger of squandering that opportunity.

“The Government’s cuts in tourism funding show its continued failure to take tourism seriously.

“With all the pen-pushers and consultancy firms dedicated to the Olympics, the Government should have realised that now is the time to be investing in the tourism industry, not after the curtain has fallen on 2012.”