Southern Portugal: A Top Destination for British Holidaymakers
Southern Portugal has been recognized as the best-value destination for British holidaymakers, according to the 2025 Post Office Travel Money report. For the first time in nearly a decade, the Algarve has claimed the top spot in the list of locations where holiday money stretches the furthest. This significant finding is backed by a broader analysis revealing that the pound has gained strength against 29 out of 30 popular foreign currencies over the past two years.
The report includes an insightful snapshot of a typical holiday shopping basket, which features 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, as well as essential items like sun cream and insect repellent.
Read Next
The best all-inclusive cruise line – and other no-fly, cheap options
This year’s study encompassed 47 destinations and revealed a promising trend: prices have decreased in half of the resorts and cities surveyed compared to last year. While Spain remains the favorite destination for British travelers, Portugal offers similar attractions without the overwhelming mass tourism often found in its neighbor. The Algarve has impressively risen from fifth place in 2024 to first this year, with an average cost of £58.95.
This improvement is largely attributed to the ongoing affordability of dining out. A three-course meal for two, including wine, costs merely £40.33—the lowest recorded among all surveyed destinations. This is notably a third of the price one would expect to pay in New York, which stands as the most expensive location surveyed at over £128 for a similar meal.
Moreover, Nice, located on the southern coast of France, has been identified as the most expensive European destination on the list. Prices there have surged by 27 percent since 2023, accumulating to more than £153.
In the Algarve, the cost of a filter coffee averages £1.27, while a bottle of local beer is priced at £2.12. The region’s affordability is further enhanced by the strength of the pound against the euro, which has risen by 1.8 percent year-on-year and 6.3 percent compared to March 2023.
Long-haul Value
Interestingly, the Dominican Republic stands out as the only Caribbean island among the top 20 in this year’s cost barometer, landing in 19th place with holiday items costing £93.09 in the resort of Punta Cana. Prices there have plummeted by over 26 percent in the past year.
In fact, many long-haul destinations have outperformed European ones in terms of value this year, claiming five out of the top six spots. Cape Town has maintained its second position, with a barometer cost of £59.84. Although this reflects an 11 percent increase from the previous year, the South African city remains an economical choice, especially when considering that a glass of wine costs just £2.07.
Japan has climbed to third place, up from fourth last year. Despite a 7.4 percent increase in prices in Tokyo, the barometer cost remains a reasonable £63.34, with local beer priced at £2.94.
Strong Pound: A Boon for Travelers
According to the Post Office, 23 of the top 30 currencies, including the euro, have depreciated since last year, enhancing the value of sterling for travelers. Although the euro remains relatively strong, it has lost 1.8 percent year-on-year against the pound, allowing holidaymakers in the eurozone to receive nearly £30 more on a £500 currency exchange compared to 2024. Sterling also buys almost 5 percent more Norwegian krone than it did last year.
Moreover, Mexico presents excellent value for currency exchange, as the Mexican peso has recorded the most significant year-on-year depreciation against the pound, weakening by over 21 percent. This means visitors can gain an additional £87 on a £500 currency purchase. The Turkish lira has also continued to decline, with a 17.5 percent drop expected in 2024, following a dramatic 114.7 percent collapse in 2023. Despite inflation, the resort of Marmaris ranks 14th on the Post Office’s Holiday Costs Barometer, with costs averaging £86—up 26.4 percent 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
