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Spain & Portugal cheapest holiday spots

Travel money sign at airportBritish holidaymakers will find their spending money goes furthest in Spain and Portugal this year, according to a new Post Office survey.

The cost of day-to-day spending overseas has tumbled at a number of destinations, particularly in Spain and Portugal.

This is according to the Post Office's annual Holiday Costs Barometer.

The findings are based on a basket of 10 typical holiday items - including a three-course meal, a bottle of beer, sun cream, and a British tabloid - in 20 favourite destinations.

Pound goes further in Spain & Portugal

Prices have plummeted by up to 20 per cent in Spain and almost 15 per cent in Portugal.

This means the basket of goods now costs £46.34 in the Algarve, £46.50 in the Costa del Sol, and £47.14 on the Costa Blanca.

These lower prices are the result of fierce competition at resorts on the Algarve and Costas.

Bulgaria and the Balearic Islands - which include Majorca and ibiza - also feature in the top five with the 10 items costing £47.32 and £55.46 respectively.

Dubai pricey for holiday spending

Outside of Europe, prices have also dropped since last year.

While sterling is 4.1 per cent weaker than last year against the dollar, holidaymakers heading to Orlando, Florida, will find prices much lower as costs have fallen by 21 per cent since last summer.

The basket of items there now costs £58.16.

In Sharm el Sheikh in Egypt, prices are more than 17 per cent lower than a year ago, with the total cost of the 10 goods coming in at £62.83.

By contrast, Egypt's mid-haul competitor, Dubai, was the highest-priced in the findings, with the basket of goods costing a hefty £103.23.

Research your resort costs

Although the pound may be worth less in Europe than a year ago, lower costs in certain resorts can easily offset the falling value of sterling.

It's worth remembering this when thinking about your holiday destination for this summer.

"Take some time to check out resort costs and add them to package prices, as this will help you find the best overall deal," says Andrew Brown of Post Office Travel Money.

"If you're looking to keep costs down, be prepared to swap destination, or to switch to a cheaper resort within the same country."

Given the continuing volatility of sterling, it's vital to budget carefully before heading off on your holiday.

"Make sure you take enough spending money to cover all the costs you are likely to incur while abroad," adds Brown.

Top travel money tips

As well as choosing a resort where prices are cheap, there are several other ways you can keep costs down when organising your travel money.

"If you're planning on getting foreign currency before jetting off, search around for the best exchange rate," says David Black from research firm Consumer Intelligence.

"While most outlets proudly say 'commission-free', there can be a big difference between the actual exchange rates and what they're offering."

Whatever you do, don't leave organising your currency until the airport, as you'll end up paying over the odds.

The best rates tend to be available online, rather than on the high street.  

Top cards for holiday spending

If you're planning on using debit and credit cards, seek out those specifically designed for overseas use, as these will help you avoid getting stung by a range of hidden fees.

For debit card users, options include Norwich & Peterborough Building Society and Metro Bank.

For credit card users, options include the Halifax Clarity, Post Office, Saga and Aqua Advance cards.

Finally, one of the best ways to take cash abroad is with a prepaid travel card from a provider such as FairFX or Caxton FX, where you can lock into a rate of exchange when you top up the card.

You can use the cards in shops and at ATMs, and as they are not connected to a bank account, they are a very safe and secure way of carrying cash. 

Click the link to read more on how prepaid travel cards work.

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Esther Shaw

Esther Shaw

Esther Shaw is a regular contributor to Confused.com and is the former deputy money editor at The Independent and Independent on Sunday. Before that, she worked as a money and City reporter on The Daily Express and Sunday Express.
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