Domestic holidays and "staycations" will contribute over £108bn to the UK economy by 2017, according to a new report by Barclays.

The expenditure of tourists who wish to holiday at home is expected to rise by 25% in the next four years.

London is set to be the biggest beneficiary as the capital will see domestic tourist spend of £17.5bn in 2017, 16% of the overall spend on staycations. The south east and south west of England will also reap sizable hospitality and holiday revenues, according the report.

Scotland stands in fourth place with an expected domestic tourist income of £13.1bn.

Explaining why tourists are set to opt against holidays abroad, Mike Saul, head of hospitality & leisure at Barclays, says: "The economy is improving and confidence is certainly growing, and while this will lead to a gradual rise in the number of consumers looking to holiday abroad again, it is unlikely to precipitate a return to the holidaying habits we were seeing prior to the downturn."

Pubs and restaurants will be the greatest benefactors, with spend expected to rise by 26% to £37 billion as more people dine out. Hotels and B&Bs will see domestic tourist spend increase by 25% to £17 billion and leisure attractions by 27% to £15 billion, said Barclays.

"With domestic tourism set to be big business for the UK's hospitality and retail sectors, those with a clearly targeted strategy are set to benefit. It is key that operators understand their customer base and crucially how to communicate with them via the channels their clients prefer to use, be it through social media, print advertising, television or radio," said Saul.

Ranking2013 Staycation Income2017 Predicted Staycation Income
1London - £14.1bnLondon - £17.5bn
2South East - £11.1bnSouth East - £14.0bn
3South West - £10.5bnSouth West - £13.2bn
4Scotland - £10.3bnScotland - £13.1bn
5North West - £9.5bnNorth West - £12.1bn
6East of England - £6.3bnEast of England - £7.6bn
7Yorkshire - £6.0bnYorkshire - £7.6bn
8East Midlands - £5.3bnWales - £6.8bn
9Wales - £5.3bnEast Midlands - £6.6bn
10West Midlands - £5.0bnWest Midlands - £6.3bn
11North East - £2.7bnNorth East - £3.3bn
12Northern Ireland - £374mNorthern Ireland - £462m