The Algarve in Portugal has been crowned the best-value holiday destination worldwide, according to the Post Office Travel Money’s 19th Holiday Money Report. The report, released today, highlights that prices for everyday holiday essentials such as food and drink have dropped significantly in this popular resort region.
The affordability boost has been further aided by sterling’s strength against the euro, which has risen by 6.3 per cent compared to March 2023.
The Holiday Money Report examined the costs of eight essential items across 47 popular travel destinations to determine the most budget-friendly spots.
These eight items included:
- A cup of coffee
- A bottled beer
- A bottle of Coca-Cola or Pepsi
- A glass of wine
- A bottle of water
- Suncream
- Insect repellent
- An evening meal
The Algarve has claimed the top spot for the first time in nine years, with a three-course meal for two (including wine) averaging just £40.33 — the lowest among all destinations surveyed. The combined cost of the eight items reached only £58.95, nearly £1 cheaper than the second-place contender.
Cape Town in South Africa secured second place. While often costly to visit, the city’s wine prices averaged £2.07 per glass (compared to £2.80 in the Algarve) and beer typically cost £2.07 per bottle (compared to £2.12 in the Algarve).
Despite rising by 7.4 percent from last year, Tokyo, Japan, ranked third, with all eight items totaling £63.34.
Kuta in Bali and Delhi in India claimed the fourth and fifth spots, respectively, with costs remaining under £70.
Interestingly, four long-haul destinations appeared in the top five this year, suggesting cheaper expenses may offset higher flight costs upon arrival.
Hoi An in Vietnam emerged as the most budget-friendly drinking spot for beer enthusiasts, with beer averaging just £1.53 — over 50p cheaper than in Cape Town.
Popular summer locations such as Prague, the Costa del Sol, and Lanzarote also featured in the top 15, ranking eighth, tenth, and 13th, respectively.
Conversely, New York topped the list of the most expensive destinations, with the eight essential items totaling £167.85 — nearly three times the cost of the Algarve. A glass of wine in New York averaged £11.08, while a beer typically cost £7.07.
Other pricey destinations included Hawaii and Nice in France, where expenses reached £155.80 and £153.03, respectively.
Laura Plunkett, Head of Travel Money at the Post Office, commented: “Despite fluctuations and some uncertainty about sterling when it fell against key currencies earlier in the year, it has bounced back from its January dip and currently looks stable.”
She added: “More encouragingly, the two-year rate comparison in our Exchange Rate Monitor shows that sterling has risen in value against practically every holiday currency since March 2023. This is a reassuring trend for holidaymakers planning trips abroad this year.”