The UK tourism industry is worth £114b and more than 8% of the total gross domestic product, research has found.
It also predicts UK tourism's value could grow to £188b within the next decade.
However, the report revealed that while UK tourism has the potential to grow significantly, it faces a series of challenges including increased international competition and the global economic downturn.
The report also highlighted a number of areas where public sector policy may be harming the industry, including transport infrastructure investment, the high cost of taxes and visas to enter the UK and climate change legislation.
A lack of information about what is on offer for visitors, skill shortages and transport difficulties were also cited as potentially harmful to the industry.
Christopher Rodrigues, chairman of VisitBritain said the report was "thorough and hugely important". "It highlights the enormous opportunities, but also the risks that our industry faces in the next few years," he said.
Liberal Democrat Shadow Culture, Media and Sport Secretary Don Foster said: "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."
By Kerstin Kühn
E-mail your comments to Kerstin Kühn here.
Looking for a new job? Find your next job here with Caterersearch.com jobs