A summer boost in domestic holidays has increased demand across the UK, but operators have warned that rising costs are preventing stronger bookings from translating into higher profits.

Revenue per available room increased 4.6 percent year-on-year in June, its fastest growth since last September, according to CoStar figures reported by the Financial Times.

Growth was particularly strong across coastal and rural destinations as more Britons opted for staycations, while major events also boosted demand in cities including Glasgow and Cardiff. However, holiday park and hotel operators said increased domestic travel has not been sufficient to offset higher payroll, maintenance and energy costs.

Butlin’s has also warned that proposals for visitor levies could undermine the opportunity presented by growing demand for UK holidays.

Chief executive Jon Hendry Pickup said uncertainty around overseas travel presented an opportunity for the domestic tourism industry.

“Uncertainty around overseas travel means there’s a real opportunity to back UK staycations but introducing a tax on holidays will have the opposite impact,” he said.

Edinburgh introduced Scotland’s first visitor levy last month, adding a five percent charge to overnight accommodation bookings.