The Algarve has topped a chart of best value destinations for the first time in nine years.
Prices in the Portuguese resort have dropped almost 2% year-on-year, according to the annual Holiday Money Report from Post Office Travel Money.
The Post Office report, now in its 19th year, takes the price of in-resort items, such as meals and drinks, to work out a barometer cost per destination, to create the list.
The Algarve’s barometer cost of £58.95 means it has moved from fifth place last year to the top spot. The cost of a three-course meal for two with wine is £40.33, the lowest recorded across the 47 destinations surveyed.
Sterling’s strength against the euro, up 1.8% year-on-year and 6.3% compared with March 2023, has also helped to reduce prices for British visitors.
Post Office Head of Travel Money Laura Plunkett said: “It’s interesting to see the Algarve back at the top of the barometer chart and this is largely down to the remarkable consistency in its low prices for meals and drinks. Even though the Algarve has featured in the best value top 10 since 2010, it has struggled to match the cheapest long-haul destinations on price in recent years. Now prices have risen in its closest competitors but remained low in Portugal. This makes the Algarve a great choice for holidaymakers who want to keep their holiday spending to a minimum.”
Long-haul destinations have outperformed European ones to claim five of top six places in this year’s barometer.
Although costs are 11% higher than a year ago, Cape Town in South Africa has retained runner-up position with a barometer cost of £59.84.
Tokyo has risen one place, to third, but prices have risen by 7.4% to £63.34; Bali has moved up from eighth to fourth place, but prices are 5% higher than last year, at £66.88.
In addition to the Algarve, there have been price falls in four other top 10 destinations – all of them new entrants this year.
Delhi is the highest placed of these, rising to fifth from 13th place a year ago on the back of a 10.7% drop in prices to £69.52.
Sunny Beach, Bulgaria is sixth, at £71.46, and Hoi An, Vietnam is seventh at £73.23.
The other new entrants to the Post Office top 10 are Prague, in eight place at £75.92, which saw a significant price fall of over 20%; Phuket in ninth place, at £76.10, where prices are down by 2.7% and Costa del Sol in 10th, at £76.51, where costs have dropped 6.4%.
New York is the most expensive of the 47 destinations surveyed, with a barometer total of £167.85, up 15.6%. Two new entrants to the chart, Mahé in the Seychelles, at 44th and Hawaii at 46th, are almost as expensive as New York, with the barometer prices at £152.21 and £155.80 respectively. Prices in Nice, France, at 45th on the list, have risen 27% to £153.03, making it the most expensive European destination surveyed.
At £92.78, prices across the US/Canadian border in Toronto are almost half those of the same items in New York. In 18th place, Toronto is rated the best value of eight new destinations featured this year.
Laura added: “Despite fluctuations and some uncertainty about sterling when it fell against key currencies earlier in the year, it has now bounced back from its January dip and currently looks stable. 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.”
The biggest year-on-year gain for sterling has been against the Mexican peso, which had surged in value in the early months of 2024. Sterling has recovered well and the peso has now weakened by over 21%, giving visitors £87 more on a £500 purchase.
Top 10 best value destinations according to Post Office Money
1 Algarve
2 Cape Town
3 Tokyo
4 Bali
5 Delhi
6 Sunny Beach
7 Hoi An
8 Prague
9 Phuket
10 Costa del Sol
