The report found that while France welcomes more than 1 million visitors from China each year, the UK only receives 328,000 Chinese visitor applications.
This is despite Chinese travellers being named among some of the highest spenders in the UK, splashing out an average £2,688 a head and preferring to use credit cards.
Overseas visitors to the UK spent £2.5bn in July this year, which was a 4% increase on July 2015.
Visitors from China can take out a Schengen visa – allowing them to visit 26 European countries – but need a separate visa to cross the channel.
David Morgan-Hewitt, managing director of The Goring and BHA member, said: “London is the greatest city in the world but it’s lagging behind its European neighbours in terms of attracting Chinese tourists and it’s time to take action.
“Hoteliers want to capitalise on what is likely to be a much more mature market in five or ten years’ time, but we need to be proactive today.”