Striking more devolution deals to improve regional transport, infrastructure and business support — all key to boosting tourism — could give local groups such as combined authorities the ability to maximise tourist spending.
The UK's tourism sector is set to grow by nearly three per cent every year over the next decade, according to research from the LGA, outstripping growth of 2.5 per cent expected in the overall economy.
The LGA said the government's new Tourism Action Plan, which includes policies such as tweaks to licensing regimes for B&Bs and new rail tourism offers, is a "step in the right direction" but more should be done to give power to local leaders.
Councils and their partners will be the best-placed actors to identify and enhance the distinctiveness of destinations, according to the LGA.
"The tourist economy is one of the UK's fastest growing economic sectors and councils have the opportunity to align their devolved responsibilities to improve their tourism offer to best showcase their unique identity and heritage, from food and drink and natural landscape to historic buildings and traditional festivals," said Ian Stephens, chair of the LGA's culture, tourism and sport board.
"Decisions about these critical success factors for boosting tourism are best taken at the local level, which devolution deals stand to make possible through combined authorities and similar local governance arrangements."
Offering higher quality destination experiences could lure overseas tourists out of London and attract UK residents to engage with the growing "staycation" trend and holiday in the British Isles.
At present, the UK's tourism deficit, the difference between money spent by UK residents at holiday abroad versus the amount spent in the UK by overseas visitors, has fallen from a peak of more than £20bn in 2008 to under £14bn in 2014.
Although less than 40 per cent of England's total holiday spend goes on domestic tourism, it is one of the few areas of the economy touted to grow in the wake of the vote for Brexit and fall in the value of sterling.
The LGA also emphasised that the move to full localisation of business rates in 2020 means it will be "even more important for councils to support and attract tourism-related businesses", where it will be a local growth priority.