The Algarve, a 150-mile stretch of coastline in southern Portugal, has been ranked as the cheapest European holiday destination for British travelers, according to a new analysis.
The study, conducted by Post Office Travel Money, compared prices for common tourist purchases across 22 popular European resorts. It found the Algarve offered the lowest costs for meals, drinks, snacks, and sun cream—key expenses for holidaymakers.
Prices nearly half those of Italy’s top resorts
A three-course meal for a family of four, including wine and soft drinks, averaged £78 in the Algarve. In Sorrento, Italy—the most expensive destination in the ranking—the same meal cost nearly double, at £150.
Other budget-friendly spots included Bulgaria’s Sunny Beach, which took second place, and Spain’s Lanzarote, which ranked third. The report noted that while these prices reflect everyday spending, travel and accommodation costs can vary significantly depending on the time of year.
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Laura Plunkett, head of Post Office Travel Money, said the findings highlighted stark differences between destinations. “It’s more important than ever to do some research before heading off on your holiday to inform how much holiday cash you’ll need,” she said.
Why the Algarve stands out
The Algarve has long been a favorite for British travelers, drawn by its mix of lively resorts and quieter beaches. Albufeira, known for its nightlife, contrasts with Praia Da Luz, a family-friendly spot with calm waters and striking volcanic rock formations. One TripAdvisor reviewer called it the “best family beach in the whole Algarve.”
Temperatures in July and August typically range between 20°C and 30°C, according to travel firm TUI. The region’s appeal isn’t just its weather—it’s the balance between affordability and variety. While Spain, Italy, and Greece often draw crowds, the Algarve offers similar experiences without the same level of congestion.
For families still planning late-summer getaways, Plunkett suggested Portugal and Spain as strong value options. Bulgaria’s Black Sea resorts also emerged as a competitive alternative, though the report didn’t factor in flight or hotel costs.
Related: British tourists pay higher prices at popular spots
Chris Logan, UK and Ireland commercial director at TUI, noted that demand remains high for established Mediterranean destinations like Spain and Italy. “However, Cyprus and Turkey continue to attract families due to their combination of quality and value,” he said.
The Algarve’s affordability might come as a surprise to some. While it’s not unknown for its charm, it’s rarely the first place travelers think of when hunting for bargains. Yet for those willing to look beyond the usual hotspots, the savings add up—without sacrificing the things that make a holiday memorable.
Still, the report’s focus on everyday spending leaves out one major variable: accommodation. A budget-friendly resort won’t help much if flights and hotels are priced at a premium. For now, though, the numbers suggest the Algarve is a rare find—a place where the sun, sand, and savings align.
