Travel with Katie Butler: Post Office names Algarve as the new ‘best value’ destination

Katie Butler, Total Travel, writes: It goes without saying that weighing up where you go could have an impact on your overall holiday budget including what you intend to take to spend whilst you are away. Again, this year we have started to see a slight shift from all-inclusive to self-catering and it is definitely worth getting out a calculator and working out a rough estimate of what you would spend on food, drink and essentials if you were to choose self-catering over all-inclusive.

The Post Office report, which is now in its 19th year, looks at the costs of items in resort such as a cup of coffee, a three-course meal, bottled water and sun cream and then works out a barometer cost per destination, and from here the list is created.

The Algarve has moved up to the top spot from fifth place a year ago with a barometer cost of £58.95, 1.6 per cent less than in 2024. This is thanks to the continuing low price of meals and drinks. The average cost of a three-course meal for two with wine in Albufeira weighed in at £40.33 – the lowest recorded across the 47 destinations surveyed, and one third the cost in New York (£128.27).

Sterling’s strength against the euro has also helped to reduce prices for British visitors.

Post Office Travel Money’s Laura Plunkett said: “It’s interesting to see the Algarve back at the top of the barometer chart again 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 ten 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 has made the Algarve a great choice for holidaymakers who want to keep their holiday spending to a minimum.”

So, which other destinations were top of the list? Below are the Top 10 best value destinations according to the report and based on a survey of eight tourist items.

Algarve £58.95, Cape Town £59.84, Tokyo £63.34, Kuta (Bali) £66.88, Delhi £69.52, Sunny Beach £71.46, Hoi An (Vietnam) £73.23, Prague £75.92, Phuket £76.10 and Costa Del Sol £76.51.

Other popular holiday hotspots although not making the top ten did not come far behind including 13th placed Lanzarote at £85.42, 14th placed Turkey at £86 and Cyprus 16th place at £91.26.

Of course, and as mentioned above, the strength of the pound against the euro is making a difference with a gain of 6.3 per cent over the last two years, meaning that those travelling to Europe are receiving almost £30 more in euros based on a £500 purchase. As the saying goes ‘every little helps’.

A storming week for late-bookings last week with holidays to travel in the next 12 weeks accounting for a huge 36 per cent of our new bookings, it is amazing what a little bit of sunshine at home can do to our thought process.

Top-selling destinations were Tenerife, Majorca and Turkey.