The Post Office’s ‘Holiday Money Report’, which was launched this week, has highlighted Portugal for offering the best value for money within Europe, based on the cost of living.

 

Launched on Tuesday this week by Post Office Travel Money, the fifth annual Holiday Money Report has outlined interesting changes within the traditional travel market.

It rated Portugal as offering the best regarding value for money, according to the report’s barometer of living costs, while prices in Spain were found to be at a record three-year low.

In what will be welcome news for Portugal, the report stated that families looking for the best value in Europe “will get the most for their money in Portugal and Spain.”

“Falling resort costs and a 7.4 per cent rise in sterling’s value against the euro saw prices fall 49 per cent in Portugal year on year - making it cheapest in the 2011 Post Office Worldwide Holiday Costs Barometer”.

Sarah Munro, Post Office Head of Travel Money, said: “Over the past two years popular resorts in the Algarve and the Costas suffered badly from a drop in UK visitors, put off by the prospect of higher costs because of the weak pound.

“Restaurants and bars responded by slashing prices in a battle for business and competition between the two, together with an improving exchange rate, has resulted in a price crash in Portugal and Spain.”

The report found that in Portugal’s most popular tourist destination, the Algarve, £32.84 (approximately €38 at the time of going to press) would buy eight items including dinner for two with wine, sun cream and drinks, less than half of what it would cost in Sorrento, Italy (£73.44) - the only eurozone country to show a rise (+1 per cent).

Elsewhere, the report also concluded that, because of the slide in sterling, Far East resorts that were until now perceived as ‘cheaper’ long-haul destinations for UK tourists, are becoming more expensive.

“UK tourists travelling long haul face paying more this year in countries traditionally regarded as cheap destinations - with Thailand and Malaysia among the worst hit”, it explained. Egypt and Kenya were the only two ‘further-afield’ destinations named by the report, where it was found that sterling had strengthened against local currency. However, The Post Office Holiday Money Report listed an unexpected quartet of countries for success after their currencies topped the Post Office chart of Fastest Growing Currencies in 2010: - Brazil, Mexico, Bali and Latvia. In fact 2011 has been tipped as the year when Latin America “hits the jackpot” after recording heavy increases in sales of the Brazilian real and Mexican new peso over the past 12 months.

However, Egypt was highlighted by the report as the holiday hotspot for 2011, even though prices there have “mushroomed”.

“Egypt has been the outstanding mid haul holiday success of recent years with currency sales up five per cent last year and 110 per cent since 2005. We expect to see more growth in 2011 because the Egyptian pound is one of the few longer haul currencies to have weakened against sterling, the country is in a low band (B) for the increased Air Passenger Duty, making it ‘relatively’ cheap to fly there, and holiday packages are the lowest-priced in the longer haul market”, Mrs. Munro explained.

The Post Office Holiday Money Report, published by the UK’s largest provider of travel money, reviews travel trends for the past 12 months and identifies holiday hotspots for 2011, based on exchange rate trends and resort costs.