THE ALGARVE offers much more than just sunshine and golf.
The resort region in Portugal is now officially the best-value holiday destination globally, according to the Post Office Travel Money’s 19th Holiday Money Report.
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The data, released today, shows that prices for everyday holiday essentials, such as food and drink, in this popular family getaway destination have plummeted in 2025.
And this has been helped even further by sterling’s strength against the euro, which has increased by 6.3 per cent compared with March 2023.
The report looked at the price of eight everyday items in 47 popular travel destinations across the world to calculate which regions offer the best value.
The items are: 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 and an evening meal.
This is the first time in nine years that the Algarve has come out on top with the cost of a standard three-course meal for two (with wine) averaging just £40.33, lower than any other holiday spot in the report.
The eight holiday items totalled just £58.95, which was almost £1 cheaper than the next most affordable destination.
Cape Town in South Africa, although pricey to get to, came in second.
The cost of booze in this hot spot was shown to be cheaper even than the winning destination, with wine averaging £2.07 per glass (compared with £2.80 in the Algarve) and a bottle of beer typically £2.07 (compared with £2.12 in the Algarve).
Despite achieving second place in the chart, Cape Town’s prices have shot up by 11 per cent since last year.
Significant price rises have also taken place in the third most affordable destination — Japan’s capital Tokyo.
Prices were up by 7.4 per cent on last year, but overall costs were still low with all eight items totting up to £63.34.
Kuta in Bali and Delhi in India came fourth and fifth respectively with totals for each less than £70.
With four long-haul destinations occupying the top five spots this year, shelling out on flights to a far-flung country may not be such a bad idea when costs can be kept low on arrival.
If you’re a big beer fan, perhaps set your sights on Hoi An in Vietnam.
The Post Office data shows that a bottle of beer here will cost just £1.53 on average, more than 50p cheaper than in South Africa’s Cape Town, the second cheapest spot for drinkers.
Favourite summer destinations such as Prague, the Costa del Sol and Lanzarote also made it into the top 15 most affordable destinations — eighth, tenth and 13th, respectively.
At the opposite end of the scale, New York is seeing huge hikes in prices with the eight holiday items totalling an eye-watering £167.85 — almost triple the cost in Algarve.
You may save yourself a fair bit of cash if you decide to go teetotal for the visit, though as a glass of wine averages £11.08, while a bottle of beer will set you back £7.07.
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Hawaii was proven to be another pricey location, as was the chic French coastal city of Nice where total costs came to £155.80 and £153.03 respectively.
Laura Plunkett, Head of Travel Money at the Post Office, said: “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.”
