It said tourism, the student population, digital and tech industries and strong arts and culture programmes have a part to play in the city's success.
The report by the House of Lords Select Committee on Regenerating Seaside Towns was published today (April 4), and sets out how seaside towns must be inspired to reinvent themselves.
It said many seaside towns and coastal communities are in 'desperate need' of improvements to transport, housing and broadband.
In the report, Lord Bassam of Brighton, chairman of the select committee, said: "Keith Waterhouse once famously described Brighton as 'a town that always looks as if it is helping police with their inquiries'.
"The tag stuck until the late 1990s when it became the ‘place to be’ and achieved City status.
"Without ignoring the challenges the city faces, Brighton and Hove is probably the UK’s most successful seaside community, but it was not always that way, certainly not in the 1970s and early 80s. So what are the ingredients of success?
"It has a diverse local economy based around tourism, healthcare, higher education, ICT, the arts and the service sector. It is also unusual in having a strong retail offer with over 350 small and often quirky independent shops.
"With 35,000 students at its two universities and 57,000 knowledge economy jobs (41 per cent of the total economy), it has a dynamic employment base.
"Since 2011, 14,300 jobs have been created and there are 2,700 more businesses than there were in 2012. In 2015, there were 2,100 business start-ups alone.
"The key is education. Over 50 per cent of working age adults have a degree (national average is 38 per cent) and its schools are improving in quality. Earnings are higher than the average and the city’s population is rapidly growing, up by 13% over the past decade.
"There was a net inflow of international migrants, some 3,800 in 2016, and it attracts the second highest number of internal migrants leaving London.
"Tourism and hospitality focused on weekend breaks and conferencing attract some 10 million visitors a year and employ 20 per cent of the workforce directly and indirectly.
"A strong events programme across the city’s venues, coupled with a vibrant arts offering, make it a must-visit location.
"Substantial local and national investment, both public and private, has underpinned its desirability.
"The arrival of premiership football has also added to interest in the city.
"Innovation and sustained investment have helped cement its status.
"The key, however, is a diverse economy driven by its knowledge base and flexible workforce. Its reputation as a cultured city with creative businesses helps give the place its buzz and USP.
"The city’s diversity and the lifestyle appeal of Brighton and Hove enables it to succeed in spite of the difficulties it has with costly housing, poverty and health issues. Brighton and Hove’s welcoming feel (it is a city of sanctuary) adds to its sense of inclusiveness and wellbeing."
The report said improving digital connectivity would help struggling coastal areas, as would creating more access to education.
It said poor-quality housing is a significant problem for many seaside towns, and inadequate transport connectivity is holding back many coastal communities.
The report sets out a number of recommendations to the Government on how to improve infrastructure for seaside towns.
Lord Bassam said: “For too long, seaside towns have been neglected. They suffer from issues rooted in the decline of their core industries, most notably domestic tourism, but also in fishing, shipbuilding and port activity, and from their location at the ‘end of the line’. The potential impact of Brexit on these towns, particularly the hospitality sector, also remains an open question.
“A single solution to their economic and social challenges doesn’t exist. What is needed is a package of strategic initiatives and interventions where national and local government work together to address issues such as transport, housing, post-school education and high-speed broadband.
“Places like Brighton and Bournemouth have shown that ‘the seaside’ can successfully reinvent itself. The Committee is confident that if our recommendations are pursued seaside towns can once again become prosperous and desirable places to live in and visit.”
To read the report in full, visit: www.parliament.uk/business/committees/committees-a-z/lords-select/regenerating-seaside-towns/