Chair of the DCMS committee Julian Knight has written to tourism minister Nigel Huddleston demanding action to "kickstart" the sector, which is facing losses in the region of £22 billion.
The government’s digital, culture, media and sport committee, which also overseas tourism, has demanded a focus on promoting staycations this summer amid the coronavirus crisis.
It has also backed calls for an additional bank holiday in October to encourage domestic half-term holidays, and "provide an opportunity to celebrate keyworkers".
Knight’s call comes after industry representatives, including Visit Britain chief Patricia Yates, this week gave evidence to an inquiry into the effects of coronavirus on DCMS sectors.
Yates said while she hoped domestic demand would pick up as lockdown measures are relaxed, but stressed there was still a "worrying lack of demand" about travelling among the British public.
In his letter, Knight said travel and tourism was one of the first sectors hit by the coronavirus crisis, which had wiped out lucrative Easter and May bank holiday trade, while adding "significant uncertainty" remained about what parts of the sector would be able to reopen, and when.
"It is clear to the committee there is much the government can do to help the tourism industry recover, not least in working to restore the confidence of the British public that, when the time comes, it will be safe to holiday in the UK.
"As it stands, only 17% of the public are currently intending to take a holiday in the UK this year whereas in other European countries such as Italy, more than 40% of the population are planning a domestic holiday.
"VisitBritain is currently forecasting a loss in domestic tourism spending of approximately £22 billion. Without a concerted effort on the part of the government, the outlook for the British tourism industry will be bleak."
Knight asked government to set out measures to kickstart tourism; how it intends to promote UK holiday destinations; and whether it will back calls for an extra bank holiday.
"Tourism in the UK has been hit hard by Covid-19, with billions of pounds lost in revenues," said Knight on behalf of the committee. "We can’t sit by and watch businesses forced to close, while others face a bleak and uncertain future.
"Now is the time for the government to set out a recovery plan for the tourism industry and announce how it will be supporting traders facing huge losses at what should be the start of the holiday season.
"Boosting the confidence of the public to look close to home at our incredible holiday destinations must be part of this plan."
