Despite the pounding taken by sterling this year against the euro, holidaymakers planning trips to a European hotspot may find their holiday cash stretches further than expected because prices have plummeted in many popular resorts, according to this year's Post Office Holiday Costs Barometer, which reveals that although sterling is worth 4.5% less than in April 2012, prices are down by up to 20% in Spain and almost 15% in the Algarve.
In a close-run race, Portugal just pipped Spain to the top spot in the seventh annual Post Office Travel Money barometer, thanks to low prices for meals and drinks.
However, the ten holiday items cost just 16p less in the Algarve (£46.34) than in Torremolinos on the Costa del Sol (£46.50) and only 80p less than in Javea, on the Costa Blanca (£47.14).
Tumbling resort prices in the Costas – down 19% year-on-year in the Costa del Sol and 20% in the Costa Blanca – helped Spain move to within a few pence of Portugal. Sunny Beach, Bulgaria (£47.32) fell to fourth place in the table because of a 3.4% rise in local resort prices but remains within 98p of top-placed Albufeira in the Algarve.
Fierce competition to attract back UK holidaymakers put a gap of £8-9 between the top four resorts and fifth-placed Mallorca (£55.46), where prices have fallen 8.8% in a year.
Sun-seekers will also be quids in if they choose the Egyptian resort of Sharm el Sheikh, as prices are more than 17% lower than a year ago (£62.83). Egypt was the only country surveyed where sterling has strengthened this year – by 10.2% – and a 9.4% drop in local Red Sea resort prices will help boost that benefit.
Andrew Brown of Post Office Travel Money said: “The pound may be worth less in Europe than a year ago but fierce competition means that lower prices in several of the resorts we surveyed can easily offset the falling value of sterling. Taking some time to check out resort costs and add them to package prices to find the best overall deal will pay dividends this summer. This really is the year to do some ‘sterling’ work before booking a holiday so be prepared to swap destination or switch to a cheaper resort within the same country.”