A hospitality chief said the government had discriminated against the sector by increasing small company taxation while simultaneously scrapping tax advantages.
Bob Cotton, chief executive of the British Hospitality Association (BHA), also described the Government's decision to cut back national tourism agency, VisitBritain's grant by 20 per cent as "curious" and pointed out that British tourism was worth £100bn a year.
Talking at the BHA's centenary dinner held at the Foreign Office last night Cotton argued that because tourism relies so heavily on overseas visitors the grant cut could have a very negative impact.
Cotton said hospitality and tourism: "employs nearly two million people, and touches the prosperity of every part of the United Kingdom. From the tip of Cornwall to the north of Scotland, tourism and hospitality plays a key role in the economic and social life of the country."
As well as discrimination over taxation such as the Abolition of the Hotel Buildings Allowance and recent decisions on capital gains tax Cotton said the industry faced other pressures.
He said the hospitality sector needed to recruit more staff and develop their skills and get to grips with reducing energy costs, which have risen on average 45 per cent in terms of revenue over the past two years.
Cotton said that hospitality and tourism were estimated to be currently investing over £3bn a year in new facilities, extensions and refurbishments. Yet British resorts were not being invested in and increasing numbers of holidaymakers were going abroad, which the sector needed to address.
He said: "The imbalance of tourism payments - currently £19.4bn - is estimated to become £24bn by 2012. The UK tourism's biggest challenge is to encourage more British people to holiday at home. Government does not appear to appreciate this. Or, if it does, it doesn't seem to care."