UK economy faces £22bn blow as Labour urged to act now or witness business disaster

The great British holiday is under threat from all sides as Labour is issued a dire warning of the impending £22billion blow to the economy. Brits are turning their backs on traditional staycation activities such as camping, plunging the domestic tourism sector into a potentially dark future. Despite three heatwaves already being recorded this year and the school summer holidays being in full swing, the picture remains bleak.

"Domestic tourism is such a valuable part of the economy and it's just been left to die," claimed Daniel Attwood of campaign group Back British Holidays. The organisation, set up by Out & About Live, has been tirelessly calling for urgent Government intervention to stem this decline and protect small businesses within the industry.

It published an extensive report revealing that domestic holidays are set to decrease from 42.3 million in 2022 to 25.5 million in 2025 - nearly a 40% drop.

Based on this downward trend, Back British Holidays predicted a staggering £22.24 billion loss to the economy by the end of this year, and £34.86 billion by 2028.

Spokesperson Daniel explained that rising costs are preventing people from enjoying staycations across the country, despite the recent period of warm weather.

He told the Express: "Prices have gone up and people have been required to spend more to get the same activity. This is all leading to the continuing decline in domestic tourism.

"And despite the recent weather, I think we're not going to see a break in that trend unless something urgent is done, and by that I mean Government action."

Daniel added that campsites are being particularly hard hit, with some already seeing a dip in bookings for the peak season.

Key sectors integral to British holiday culture, such as caravanning and camping, are forecasted to lose over £1.2 billion this year, marking a 39% drop in spending, according to the campaign group.

Mike Thomas, who runs Bay Ness Farm in Robin Hood's Bay, can attest to this. Despite the campsite's stunning panoramic views of the Yorkshire Coast and lush rolling hills, Mike said bookings are down 18% this summer and 15% overall this year.

After reviewing his disappointing year-on-year figures, he spoke to other tourism-dependent businesses in the area to discover that they, too, were suffering, with takings down as much as 20%.

"I was quite surprised, everyone seems to be slightly down," he said. Mike sees this as an unfortunate knock-on effect of the current troubling economic times, which have left people with less money to spend.

Those fortunate enough to have money to spend on a summer holiday or long weekend away are believed to be increasingly taking their business elsewhere, leaving campsites to be forgotten about.

He said: "There's less money about; people have got less money ... People are also saving more money because they fear we're heading towards a recession ... To be honest, going camping isn't cheap anymore."

Mike is not the only one living the reality of the staycation's decline. VisitEngland found that spending on overnight trips in England by Brits decreased by 12% to £1.9 billion in April 2025, compared to April 2024.

Brits took 5.9 million overnight trips in England during April, dropping 21% on April 2024 - a decline noted across all trip types, VisitEngland said.

Daniel fears that vulnerable coastal economies will be severely impacted if this concerning trend persists. "Worst case scenario, we're going to see businesses go under this year," he warned.

"We're talking not just about the impact on the local tourism, on the businesses that close, but the employment, the decline in business rates, all of the associated incomes that the tourist areas are reliant on, will start to reduce. It can very quickly become a snowball."