The Cut Tourism VAT campaign has submitted its case to the Chancellor ahead of the Autumn statement on 5 December.
The submission summarises the economic evidence in favour of a VAT reduction for hospitality using the Treasury's own economic model to highlight the financial benefits to the country.
It claims that between 2006 and 2011 the UK lost market share in 28 out of its top 33 markets by visitor volume.
Reducing VAT to 5%, the submission says, would be revenue neutral and contribute £4b each year to the UK economy.
As it stands tourism is the sixth largest export earner for the UK but the only sector whose exports are subject to VAT.
Merlin Entertainments chief executive Nick Varney said: "The Government is currently promoting its export credentials but has failed to recognise that tourism is an export sector. It has loaded tourism with taxes, such as VAT, and increased other barriers to a point where we are now losing market share to our rivals.
"Price competitiveness is the single biggest obstacle to more international visits and more people holidaying in the UK. A reduction in VAT on tourism would go a long way to improve our international standing and help ease the cost of living burden for staycationers."
Graham Wason, chairman of the Cut Tourism VAT campaign added: "A significant prize in terms of growth and employment will be won by the Government which reduces Tourism VAT. In addition the Chancellor will be known as the politician who finally gave British families the opportunity to enjoy UK holidays taxed at a competitive rate with holidays abroad - a level playing field with mainland Europe at last."