Families looking to keep holiday spending under control this summer may find the best value in southern Portugal, with several Spanish destinations and Bulgaria also ranking among Europe’s most affordable holiday spots.
The findings come from the 2026 Post Office Travel Money Family Holiday Report, which examined the cost of common holiday purchases across 22 popular European destinations. Produced in partnership with travel operator TUI, the report compares the price of a basket of everyday items, including family meals, drinks, snacks, suncream and insect repellent, to help travellers estimate their spending abroad.
Algarve Takes the Top Spot
The Algarve emerged as the cheapest destination in this year’s rankings after prices fell compared with last summer. Researchers calculated that a basket of ten typical holiday purchases costs around £140, making the Portuguese region the lowest-cost destination surveyed.
Sunny Beach in Bulgaria finished a close second, while Spanish destinations dominated much of the remainder of the top 10. Lanzarote, Menorca, Costa Brava, Tenerife, Costa del Sol and Costa Blanca all featured among the best-value choices for families. Marmaris in Turkey and Paphos in Cyprus also made the top 10.
Everyday Costs Vary Widely Across Europe
The report highlights just how much holiday expenses can differ depending on where families travel.
Researchers found almost a twofold difference between the cheapest and most expensive destinations surveyed. The Algarve’s basket of tourist essentials cost around £140, while Italy’s Sorrento ranked as the most expensive at roughly £268.
Some destinations stood out for specific bargains. Sunny Beach offered one of the lowest-priced evening meals for a family of four, while Lanzarote recorded some of the cheapest prices for drinks and adult lunches. Beer prices in several leading value destinations were also significantly lower than in many competing resorts, helping to reduce overall holiday spending.
Why Holiday Costs Matter
The annual report arrives as many households continue to watch their travel budgets closely.
According to research accompanying the study, many families expect to spend more on overseas holidays this year because of higher living costs. The report suggests that comparing local prices before booking can make a noticeable difference to the overall cost of a trip, particularly for families who eat out regularly or purchase beach essentials during their stay.
Laura Plunkett, head of Post Office Travel Money, said the wide variation in prices between European resorts means travellers should research destination costs before they leave, as careful planning can help holiday budgets go further.
Spain Continues to Offer Strong Value
Spain remains one of the strongest performers in the report, with six destinations appearing in the top 10. That broad representation gives families a wide range of affordable options, from the Canary Islands to mainland coastal resorts.
Portugal’s rise to the top, combined with Spain’s strong showing and Bulgaria’s continued competitiveness, suggests that western and southern Europe continue to provide some of the best value for UK travellers seeking sunshine without overspending.
What Travellers Can Expect
While accommodation and flights often account for the largest share of a holiday budget, the report focuses on spending after arrival—costs that can quickly add up during a family break.
For travellers still deciding where to book, the latest rankings provide a useful guide to destinations where everyday expenses are likely to be lower, helping families make their holiday budgets stretch further throughout the summer.
