The train taking Britain's travel bosses to Birmingham to ponder the fate of UK tourism this week was cancelled. But the national departure board is not as depressing as some would like us to think.

The boss of Britain's biggest travel company was blunt: "The British seaside holiday is in terminal decline". Charles Newbold, managing director of Thomson Holidays, laid into the landladies when launching his company's Summer '96 brochure last autumn. To back up the claim, Mr Newbold showed journalists a specially shot video of a wet Bank Holiday Monday in Margate, and contrasted it with the hectares of blue skies and bluer seas in the Thomson Summer Sun brochure. His was the latest salvo in the assault on British beaches that began, famously, with George V's deathbed pronouncement: "Bugger Bognor".

The summer of '95 was mostly splendid in Britain and mostly miserable for overseas tour operators. About 10 million of us were persuaded to sign up for a standard Mediterranean package, but often only at the last minute and after being bribed by absurdly low prices.

Bookings of holidays abroad this year are, to use a more polite term than most in the industry, disappointing. So it is not surprising that the tour operators should employ spoiling tactics against domestic holidays. But along with the scorn that is being ladelled on tourism in Britain, you may detect a dollop of wishful thinking among overseas tour operators.

In terms of the total holiday market, domestic tourism has been consistently slipping back against foreign travel for the last 50 years. But we still take more holidays at home than overseas. Millions are contributing to the pounds 3bn-plus that the British will spend on UK short breaks this year. And Butlin's is one of the companies that has helped the figure to increase by 60 per cent in three years.

Until recently, the company was fighting a losing battle on three fronts. Fuelled by Hi De Hi! television imagery, Butlin's holidays tended to be viewed as suitable only for those short, in equal proportions, of cash and imagination. Campers were escaping en masse over the Butlin's security fence to the Costa Brava, where a week in the sun could be had for as little as pounds 99 (and where, if you look carefully, it still can be). And an upstart, Center Parcs, brought the continental concept of holiday parks to the English countryside. In locations like Sherwood Forest, the new rival offers family fun in the sun - and the rain, thanks to a gigantic dome that could turn a slice of the Midlands into a fair approximation to Majorca.

Rank Holidays, which now owns Butlin's, needed to do more than merely bake the birthday cake for next week's celebration of 60 years of the holiday camp - sorry, Holiday World, as the original in Skegness is now known. To raise accommodation standards, Butlin's now employs "Bluecoats" as well as the traditional red-blazered entertainment staff, to supervise housekeeping. The first Oasis holiday village is being built in Cumbria; Rank sees it as taking all the best ideas of Center Parcs and reformulating them in a neat Nineties package. In London, residents of Bayswater are getting used to the idea that the Butlin's Grand Hotel is, after two years of operation, a notable success; where else in the capital can you get a week's centrally located accommodation, with breakfast and dinner, for pounds 219? Some people I know pay that in rent.

Yet several hurdles remain to taking a British holiday - at least in public perception. Three preconceptions are proving hard to shift: (1) It will rain; (2) It will be more expensive than a holiday abroad; (3) It will be hard to book.

You might think there is not much to be done about our capricious climate except hope for the best and build indoor attractions. But if holidaymakers studied meteorological statistics, they would see that the April to June period is substantially drier than July to September; Devon gets 40 per cent more rain in August than in June.

Prices are getting keener against Continental competition, though some of the new-found interest in Britain is as a result of the woeful performance of sterling recently; with the pound scraping against the seven-franc level, Wales suddenly looks more attractive than Britanny. Bookings for country cottages in Britain are estimated to be 7 per cent higher for this year. That prediction is from Country Holidays, the largest player in the market - and part of the Thomson group. Clearly the mass tourism conglomerate believes there is money to be made in old Blighty yet.

Anyone with a telephone and a credit card can book an overseas package holiday in five minutes flat. As Sunny Crouch, the vice-chairman of the Tourism Society, says, "If I want a week on the English Riviera I wouldn't know where to start." But as from this spring, you can call into a local tourist information centre and book a complete package across the other side of the country. A pilot scheme, beginning in Northampton, may convince us that organising a holiday in Britain is not so tough after all. But we are still way behind other countries in taking tourism seriously.

In a neat metaphor for Britain's belief in itself as a tourist destination, the official train bearing dignitaries to this week's British Travel Trade Fair in Birmingham broke down. When the soon-to-be-privatised train was replaced, and the delegates finally made it to the National Exhibition Centre in Birmingham, they spent part of yesterday discussing "Burning Issues in Tourism".

The first item on the agenda was as blunt as Charles Newbold's opening gambit had been. "Was Virginia right to fire Adele?" - referring to the Heritage Secretary's decision not to renew the contract of Adele Biss, chairman of the British Tourist Authority and the English Tourist Board. Defenders of the decision were as hard to find as cheerful cattle farmers; the consensus was that Ms Biss has performed brilliantly in promoting the notion that the British should consider the home nations as well when deciding where to take a holiday.

Back to Butlin's. Sir Billy would be pleased with the way things are shaping up elsewhere in the world. The boom sector is the all-inclusive holiday, where everything from breakfast to boardsailing is included in the price. Although Montego Bay may be a more glamorous destination than Minehead, this is just the logical conclusion of the Butlin's dream, which began 60 years ago this Easter.

Sandals, the swanky Caribbean chain of all-inclusives, shows no interest (yet) of opening up in Bognor. But I am looking forward to a four-day break at Butlin's "Southcoast World" in Bognor this July. I have paid pounds 70 for a four-day break, including meals and the train from London. The booking took five minutes to make, and I genuinely can't wait to try out the brochure's promise of "New interactive flume rides" and "the skin- tingling paradise of Aquasplash". And bugger George V.