The promise of reviving the Great British Seaside holiday

Good afternoon from New Economy Brief.

As schools break up for the summer this week, many families will be heading abroad for summer holidays. Meanwhile, Andy Burnham has taken office as Prime Minister and put a pledge to radically rebalance the UK’s deeply London-centric economy at the centre of his offer to the country. 

For this week’s New Economy Brief, we take a deep dive into the challenges facing Britain’s seaside towns and villages, and ask whether revitalising domestic tourism is a route to restoring some of Britain’s most deprived areas.

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A short history of Britain’s coastal economies 

A major 2019 House of Lords report on the future of seaside towns detailed the state of former holiday hotspots. It showed that though each area is different, many of these towns share complex challenges produced by the decline of core industries over several decades, that has been compounded by underinvestment.

Many areas were developed in the late 19th century with the growth of domestic tourism, which fuelled strong hospitality and tourism industries that diminished with the rise of cheap overseas holidays since the 1970s. Other traditional industries such as ports, shipbuilding and fishing have also declined. Relative geographical isolation and lack of funding for transport and digital connectivity has made it harder for economies to diversify, and many areas are now dominated by low wage, seasonal, and precarious work. 

These issues have been compounded by a severe housing crisis. Ballooning numbers of second homes and short-term lets have pushed up rents, whilst many former hotels and bed and breakfasts have been converted into poor-quality Houses in Multiple Occupation (HMOs). The Lords concluded that the proliferation of these substandard HMOs, which often house vulnerable tenants, is one of the most urgent challenges seaside communities face. 

The levels of deprivation are devastating. Home to around 15% of the population of England and Wales, nine out of 10 of England’s most deprived neighbourhoods are in seaside towns and villages, and levels of deprivation are similarly high in Welsh coastal towns. Health outcomes are some of the worst in the country, as are numbers of deaths from avoidable causes.  

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Is revitalising domestic tourism the answer?

A key question is whether strategies should focus on revitalising tourism, or diversifying local economies. For some, efforts to bring back the domestic seaside holiday look like a no-brainer – it would both cut aviation emissions and boost coastal economies. 

Analysis from the New Economics Foundation (NEF) found that after a brief post-pandemic revival, a 21% drop in spending on domestic holidays from 2022 to 2024 meant spending in coastal regions fell almost a third over the same period. 

Further NEF analysis found that domestic tourism spending kept falling throughout 2025, with coastal areas suffering while spending in cities increased. NEF’s Alex Chapman argues that this doesn’t reflect changing preferences, but “years of government neglect” of the industry. He cites the tax system favouring air travel over hospitality and leisure, as well as rising ground transport costs and a lack of investment in domestic destinations. According to NEF’s estimates, taxing ‘ultra-frequent flyers’ more fairly could discourage overseas travel while bringing in £6 billion in revenues that could be used to make UK holidaying cheaper.

However, though the climate crisis provides a clear rationale for boosting domestic tourism, it poses a whole other set of challenges. Coastal areas are particularly exposed to climate change, and many areas are already suffering catastrophic impacts from coastal erosion. As sea levels rise and flood defences crumble, options under consideration for classic holiday destinations like Mablethorpe or Skegness include a ‘managed retreat’ from the current coastline. 

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Reaching breaking point. 

Cambridge University’s Stefania Fiorentino instead points to the need to go beyond tourism and put what communities need at the fore. She argues that attempts at tourism-based regeneration are too often shallow – according to Fiorentino, what’s needed is “coordinated action at national, regional and local levels, alongside tailored measures that rebuild institutional trust, restore basic services and meet everyday needs.”

This sentiment echoes previous calls for greater community ownership and empowerment. Back in 2016, NEF argued for a ‘Blue New Deal’ for coastal communities, with putting local people in control a key pillar of any programme to guard against communities being priced out and not seeing the benefits of investment. Similarly, CLES argued that community wealth building should be at the heart of revitalisation efforts so that “income is recirculated, communities are put first and people are provided with opportunity, dignity and well-being.”

A decade on, it is striking how little progress has been made. A 2023 follow-up on the Lords’ report concluded that coastal communities continue to experience a “persistent sense of disconnect” in the face of little progress – a disconnect that is now playing out electorally. Though Labour won 63 of 105 ‘Sea Wall’ constituencies in 2024, support for Reform is high. The far-right party won three of its five seats in coastal constituencies, and polls suggest it could win 76 Sea Wall seats at the next election. 

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Can Burnham turn the tide? 

Some changes under Labour have already been substantial. Reforms to the Treasury’s Green Book to rebalance spending in favour of places that need it most have been celebrated as a “game-changer” by MPs representing coastal constituencies. But Labour’s flagship programme of community-driven investment, Pride in Place, still misses out many coastal towns in dire need. 

What is clear is that a step change is needed. Boosting domestic tourism may help, but it’s clear that it won’t be enough to achieve the locally-rooted, diverse economies that areas need to thrive in the long term. And with devolution at the centre of the new Prime Minister’s policy offer, a key question will be how an agenda so often framed in terms of a ‘North-South divide’ can deliver for coastal areas and tackle the rise of the far right.