Organisers of Bristol's bid to be European Capital of Culture 2008 say they are disappointed that the city was not chosen.
The city is well known for its summer balloon fiesta
Liverpool was announced as the winner by Culture Secretary Tessa Jowell on Wednesday, and can now expect to receive up to £400m in revenue.
Andrew Kelly, who organised Bristol's 2008 bid, told the BBC: "We are pleased for Liverpool, but this is not a defeat for our city.
"Nor is it the end of our work. We are committed to making Bristol a capital of culture and will deliver on the projects we have proposed.
"We would like to thank the judges for a fair competition, carried out with integrity and rigour."
Bristol's attractions include: Brunel's Clifton suspension bridge, the SS Great Britain and the hot air balloon fiesta.
On a more cultural note, the West's capital boasts the Old Vic - one of Europe's oldest theatres - the Colston Hall, the Watershed and the Arnolfini.
Not to mention the famous animated characters Wallace and Gromit.
Sir Jeremy Isaacs, chairman of the judging panel and the former head of the Royal Opera House, said: "Some people thought Bristol had most European feel of all the cities we went to, because of the good things it
has done at the waterfront."
But he added that the city was still struggling with several issues, including the
way its districts were separated by motorways.
"It's getting there, it's a wonderful place to go to, we were very impressed with Bristol," he said.
Those involved in the bid can take comfort from the fact that the city was recently voted as the smiliest in the UK.
The result will put that reputation to the test.
Six cities were shortlisted - Newcastle/Gateshead, Liverpool, Birmingham,
Cardiff, Bristol and Oxford, with Newcastle/Gateshead the bookmakers favourite. Bristol was second to last on 8/1.
Glasgow was the last UK city to
hold the title - in 1990 - and the city's Lord Provost Liz Cameron said she was in no doubt that the title brought great benefits to the city.