The Algarve has claimed the top spot for the best-value destination, marking its first appearance at the top of the list in nine years.

Budget-conscious holidaymakers

The Algarve’s rise to first place is a significant leap from its fifth position in 2024, thanks to its consistently low prices for meals and drinks. The cost of a three-course meal for two with wine is just £40.33, making it the most affordable option across the 47 destinations surveyed. This makes the Algarve an excellent choice for travellers looking to get the most out of their holiday budget while still enjoying beautiful landscapes, stunning beaches, and rich culture.

According to Laura Plunkett, Head of Travel Money at Post Office, the Algarve offers incredible value for money, making it an attractive destination for anyone wanting to keep their spending low without compromising on a fantastic holiday experience.

The Post Office Holiday Money Report

The annual Post Office Holiday Money Report, also known as the Worldwide Holiday Costs Barometer, compares the cost of eight key items across 47 holiday destinations. These items include 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, sun cream, and insect repellent.

This year’s report found that long-haul destinations offer incredible value for money, with several standing out for their affordability despite the rising costs in some European hotspots.

Long-haul destinations surpass European choices

Cape Town, South Africa, holds onto its second-place position despite a modest 11% price increase from the previous year. Tokyo, Japan, comes in third, while Bali’s Kuta region lands fourth, with a 5% increase in costs. However, both Tokyo and Bali still offer competitive value compared to many European destinations.

Delhi, India, has seen an impressive rise, jumping from 13th to 5th place after experiencing a 10.7% drop in costs. This makes it a prime option for travellers seeking cultural experiences and historical landmarks without breaking the bank.

Rising Costs in Some Popular Destinations

On the other hand, New York has become the most expensive destination among the 47 surveyed, with prices for similar items nearly double the cost found in other parts of the United States. The city’s prices have surged by 15.6% year-on-year, making it a less budget-friendly option for travellers.

Surprises in the Top 10

While some classic destinations dominate the list, there are also new additions to this year’s top 10, with Toronto ranking as the best-value newcomer at 18th place. Other notable destinations include Sunny Beach in Bulgaria, Hoi An in Vietnam, and Costa Del Sol in Spain, which all offer great value for money.

The Top 10 Best-Value Destinations for 2025

1. Algarve, Portugal

2. Cape Town, South Africa

3. Tokyo, Japan

4. Kuta, Bali

5. Delhi, India

6. Sunny Beach, Bulgaria

7. Hoi An, Vietnam

8. Prague, Czech Republic

9. Phuket, Thailand

10. Costa Del Sol, Spain

Whether you’re after a relaxing beach break in the Algarve, a cultural adventure in Delhi, or an exciting city escape to Tokyo, these destinations offer fantastic value for money in 2025, helping you make the most of your holiday budget.