Old favourites offer value for holiday money

Prices have fallen 49 per cent in Portugal over the last 12 months, making the country the cheapest for typical holiday spending items in a 10-nation list.

Including a three-course meal, suncream and drinks, the items cost just 32.84 in Portugal, with Spain the next cheapest country at 36.68. Of the 10 countries surveyed, the most expensive for the items was Malaysia at 47.68.

The survey by Post Office Travel Money also showed that foreign currencies against which the pound had fallen the most in the last 12 months were those of Malaysia, Australia, Thailand and South Africa.

In contrast, British holidaymakers are now getting much-improved exchange rates for Hungary, Croatia, Bulgaria and the eurozone.

Post Office Travel Money head Sarah Munro said: "Over the past two years popular resorts in the (Portuguese) Algarve and the (Spanish) Costas suffered badly from a drop in UK visitors.

"Restaurants and bars responded by slashing prices in a battle for business, and together with an improving exchange rate, has resulted in a price crash in Portugal and Spain."