A record number of foreign tourists is expected in Britain this year, according to VisitBritain, the organisation that markets UK tourism abroad.
An estimated 26.34 million international visits will be made to the UK - beating the record of 25.7 million in 1998.
The boom would suggest British tourism has recovered from the downturn which followed the 11 September attacks, the foot and mouth epidemic and the Iraq War.
Elliott Frisby, spokesman for VisitBritain, said: "Globally, people are travelling again. There is less of an impact from the fear of terrorism. People are well aware that terrorism is still around but we are not in the same situation as we were at the end of 2001, when people just stopped travelling."
The upbeat forecast follows a recent survey by the Deloitte consultancy showing that room occupancy levels in London's top hotels reached 83 per cent in September, compared with 77 per cent throughout the earlier part of the year. In 2003, only 70 per cent of hotel rooms were occupied. Much of the increase in business is believed to be coming from European rather than US travellers.
The US election is believed to have depressed transatlantic visits, but spare capacity has been filled by visitors from France, Italy and Germany. London, with its comprehensive air links and competitive hotel market, has become a favourite base for European business conferences.
Mr Frisby said the other main growth market was from previously peripheral markets like China, South Korea, Russia and Poland. "If you take the Russian example, in year-on-year terms, we are seeing growth of around 30 per cent compared to the slight drop from the US. These are the markets where a lot of our effort will be focused in the future," he said.
According to the VisitBritain figures there were 24.7 million visitors to Britain in 2003 - a 2 per cent increase on 2002. Those visitors spent £11.79bn.
VisitBritain's chairman, Sir Michael Lickiss, said: "British tourism is now well on the road to recovery following the challenges of the last three years. If the latest estimates on visitor numbers for 2004 are fulfilled, the British tourism industry will have much to celebrate."
Tourism is one of Britain's major industries, accounting for 4.5 per cent of gross domestic product and employing more than 2.1 million people.
Analysts believe the boom will continue and may grow next year. as Americans begin to travel again. Levels have remained low this year because traditionally, in election year, the US economy remains flat and its citizens are less likely to travel.
The United Kingdom is currently the strongest performing country in Europe with revenues up 9 per cent on the same period last year, double the European average.
Sir Michael said: "To achieve our joint vision of building a British tourism industry worth £100bn a year by 2010, we need effective strategies to ensure that visitors have a first-class experience. Investment in tourism is absolutely essential to achieving this aim."