According to the 2025 Post Office Travel Money report, the Algarve has topped the list of the places where holiday money will stretch furthest, for the first time in nine years.
The report includes a snapshot of a typical holiday shopping basket: a three-course meal for two with wine, a cup of coffee, a bottle of local beer, a can of cola, a glass of wine, a bottle of still water, sun cream and insect repellent.
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Spain is British holidaymakers’ favourite destination, but Portugal has similar attractions without its neighbour’s mass tourism flashpoints.
That figure is a third of what you can expect in New York – the most expensive place surveyed – where a meal will set you back more than £128.
Nice in the south of France is famously expensive – and the report discovered it’s the priciest European spot out of all the destinations surveyed (Photo: Alexander Spatari/Getty Images)The Algarve, where a filter coffee costs an average £1.27 and a bottle of local beer is £2.12, has also become more affordable thanks to sterling’s strength against the euro – up 1.8 per cent year on year and 6.3 per cent compared with March 2023.
Coming in at 19th place, the holiday items were £93.09 in the resort of Punta Cana, where prices fell by more than 26 per cent in the past year.
Cape Town retained its number two spot, with a barometer cost of £59.84 – while that is 11 per cent higher than a year ago, the South African city makes for an affordable trip, before factoring in flights, with wine just £2.07 a glass.
Strong pound
Twenty three of the Post Office’s top 30 currencies – including the euro – have weakened since last year, meaning sterling offers better-value exchange rates in many regions.
While the euro is still relatively strong – losing 1.8 per cent year on year against sterling – holidaymakers visiting the eurozone can receive almost £30 more on a £500 currency purchase than in 2024. Sterling also buys almost 5 per cent more Norwegian krone than 2024.
Mexico offers plenty of bang for your buck when it comes to currency exchange (Photo: Arkadij Schell/Getty Images)Turkish lira’s fall has continued, with a 17.5 per cent drop in value in 2024, following a 114.7 per cent collapse in 2023 – though inflation means that the resort of Marmaris comes in at 14th place in Post Office’s Holiday Costs Barometer, with costs (£86) up 26.4 per cent this year.
Post Office Travel Money Barometer results
Algarve, Portugal – £58.95 Cape Town, South Africa – £59.84 Tokyo, Japan – £63.34 Kuta, Bali – £66.88 Delhi, India – £69.52 Sunny Beach, Bulgaria – £71.46 Hoi An, Vietnam – £73.23 Prague, Czech Republic – £75.92 Phuket, Thailand – £76.10 Costa del Sol, Spain – £76.51 Mombasa, Kenya – £77.20 Penang, Malaysia – £83.05 Puerto del Carmen, Lanzarote – £85.42 Marmaris, Turkey – £86.00 Sliema, Malta – £88.91 Paphos, Cyprus – £91.26 Sharm el-Sheik, Egypt – £91.48 Toronto, Canada – £92.78 Punta Cana, Dominican Republic – £93.09 Santiago, Chile – £94.13 Read More Details
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