Value for money will be a crucial commodity in 2017 as affordability rather than aspiration provides the clue to holiday choice, according to Post Office Travel Money.

In its annual Holiday Money Report, Europe is highlighted as potentially being the big winner as tighter budgets attract UK tourists to resorts where the holiday purse will stretch furthest.

The Worldwide Holiday Costs Barometer shows the extent to which local prices for meals, drinks and other tourist staples will dictate how far the holiday budget stretches. While the barometer reveals that overall costs are higher worldwide than in 2016, UK tourists can take some comfort because prices in local currency for the eight tourist items surveyed have either fallen or stayed on par with 12 months ago in 40% of the destinations surveyed.

In Europe this rises to 50%. By choosing one of these resorts or cities, holidaymakers can keep the increased cost caused by the weaker pound to a minimum.

The best example of this is in Portugal’s Algarve, which tops the chart for the second year running with a barometer total of £33.36 - only £4 more than a year ago. This is because the local price (euro) of an evening meal for two with wine – the biggest single cost in the barometer basket – is down almost 5% year-on-year.

Runner-up Sunny Beach in Bulgaria (£33.53) is just pence behind the Algarve and also benefits from a 1.5% fall in local prices.

In third place, Spain’s Costa del Sol (£38.79) has closed the gap on the Bulgarian resort because of a bigger 3% drop in local costs.

Elsewhere in Europe, Marmaris, Prague, Budapest and Corfu have retained their top ten places, while Paphos has risen to sixth place, its highest ever position. This spells good news for those planning to visit the Cypriot resort in its year as joint European Capital of Culture.

Completing the European line up in ninth place is Sliema in Malta, one of two new top ten entrants.

The other new entrant is this year’s biggest surprise: Japan’s growing reputation for affordability will get a further boost as Tokyo (£58.47) makes its first appearance in the barometer’s top ten in eighth place – the sole long-haul destination to feature in it.

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