The latest Post Office Travel Money annual Holiday Money Report names the Algarve as best-value eurozone resort, with a survey of eight tourist items, including drinks and meals, costing £44.13.
It beat nearest eurozone rival Costa del Sol, where the basket costs £57.96, but was behind Marmaris (£37.19) and the cheapest option, Sunny Beach in Bulgaria, which totalled £27.71.
Prices in the Algarve have fallen 16.5% and helped Portugal pull away from the Costa del Sol, which is 31% pricier.
The Costa has fallen from fifth to seventh place in the Post Office’s top 10 after registering a 3% price rise. Bali and South Africa make up the top-five best value destinations, while another Portuguese destination, Madeira, with a £62 basket, has edged out Cyprus from 10th place.
The second new entrant to the best value top 10 is Sri Lanka, in ninth place, replacing Japan, where prices in Tokyo have risen 24% to £66. The 16% reduction in prices to £59 in Sri Lanka is a consequence of the weak rupee, the survey said, “since local prices remain on par with a year ago”.
Further down the table, Iceland, a green list destination, showed poor value, with the basket costing £130.34, putting it in 44th place behind Seychelles and Barbados, but ahead of Ras Al Khaimah and worst-value destination, Abu Dhabi, where the basket cost £159.
The report also surveyed consumers. Greece, Portugal and the Spanish mainland were given the top-three good-value ratings by those who had visited, with Dubai bottom of 28 destinations, behind Scandinavia and Japan.
The research looked at 46 destinations, nine more than last year, and found costs had fallen in more than 75% of the 37 resorts and cities surveyed in 2020.
Post Office Travel Money’s Nick Boden said: “Sterling’s strength against the majority of holiday currencies means it really ought to play an important part in decisions about where to travel abroad.
“The purchasing power of the pound means people changing £500 into US dollars or East Caribbean dollars, the currency for Antigua, St Lucia and Grenada, will get the equivalent of around £61 extra.”
The report also found 49% of Britons said they would not travel this year and 18% were undecided.
