The city was once known as the "Venice of the East", but today it is still emerging from the effects of decades of neglect under Saddam Hussein, a series of wars and a bloody insurgency.
But British Consul General Nigel Haywood says it now sees itself as a future rival to Dubai - albeit with much more to offer.
He said: "The tourism potential for Basra is actually quite phenomenal. It's just not there yet."
Mr Haywood cited the example of a bird watcher he met at a party while he was back home in the village of Corfe Castle in Dorset.
The ornithologist enthused about the Basra warbler and the fact that the province is on major bird migration routes, leading the Consul General to wonder whether British RSPB members might one day flock to southern Iraq.
Basra already has one five-star hotel nearing completion and Iranian investors are proposing to build a second.
Mr Haywood said: "It sees its future as a major cosmopolitan trading city on one of the key transport routes from East to West...
"(Dubai) is the direction of travel that Basra would like to take - except that it would see itself as having much more than Dubai."
But he added: "I think it's going to be a long time before people come out here for beach holidays.
"The city itself has the potential to look absolutely stunning, but there's a long way to go."
Basra was on the itinerary of a small group of adventurous Western tourists - among them five Britons - who visited Iraq earlier this month in the first trip of its kind since the 2003 invasion.
Mr Haywood has seen the security situation in the city improve dramatically since he arrived in April 2008.
But he is not keen to encourage other British tourists to visit Iraq in the immediate future.
He said: "Foreign and Commonwealth Office advice remains what it says on our website, which is: Don't come here unless your travel is essential.
"It's still arguably a risky activity, we still have people held hostage here. That always has to be borne in mind.
"While investors are likely to be able to put in place good security arrangements for their visitors, individual tourists are less likely to."
Mr Haywood is not expecting a rush of UK holiday makers to arrive in Iraq, and anticipates that the British consulate in Basra will become focused primarily on promoting business ties.
"Consulates abroad are there for the protection of British citizens, although increasingly if you look at the way our consulates operate, much of the work is promotion of trade and investment," he said.
"That's the kind of consulate I would expect to see here in the future."