Brits heading to Spain and Portugal this summer will be buoyed by lower prices for holiday spending. But those visiting Egypt and the USA face hikes.

The figures will help last minute holidaymakers decide where to dash off for a late summer break (see the and Cheap Travel Money guides).

The Association of British Travel Agents says it expects more late deal bookings than normal as many have delayed due to the volcanic ash cloud, emergency Budget and football World Cup (see the Cheap Flights, and Cheap Packages guides).

Typical costs in Portuguese tourist resorts are down by 41% on last summer. In Spanish resorts, they are down 39%.

Those falls make the pair the cheapest destinations for overseas spending, based on research by the Post Office on costs in tourist hot spots.

The huge falls are down to a strengthening pound in relation to the euro over the past year, meaning you get more euros for your sterling.

But more importantly, they can be attributed to heavy discounting by local retailers and restaurateurs.

It shows holidaymakers should not factor in currency movements alone when attempting to gauge costs.

Prices have soared by 40% in Egypt and 35% in the USA, even though sterling hasn't fallen by the same rate against the Egyptian pound or US dollar.

In fact, it has made gains against the Egyptian pound compared to this time last year.

It's more than currency

A Post Office spokeswoman says: "It's not all about currency. For example, we have seen some heavy discounting by retailers in Spain and Portugal since the euro dropped in value. They have worked hard to entice tourists."

Today, the pound had lost ground against the US dollar and euro due to weaker UK economic data.

By 3.30pm, £1 bought $1.57 and €1.2 on the currency markets. Sterling has fallen on highs over the past year against the two currencies of $1.68 and €1.23.

This time last year, you'd have got $1.65 or €1.16.

The table below shows how much a typical basket of goods costs in various popular destinations, compared to this time last year.

What a basket of goods costs
Country Typical price Compared to summer 2009
Portugal £36.04 -41%
Spain £36.68 -39%
Bulgaria £38.20 +2%
Thailand £41.45 +15%
Malaysia £45.57 -5%
Kenya £45.84 -4%
Indonesia £46.58 +9%
Croatia £58.03 -2%
Greece £58.30 -3%
Turkey £59.83 +5%
UK £68.96 -2%
France £70.72 +1%
Italy £73.57 +7%
Egypt £80.09 +40%
USA £89.98 +35%
Source: Post Office. Basket includes: coffee, larger, cola, water, sun cream, insect spray, cigarettes, three-course meal for two incl. wine. Based on tourist resort prices.

Other cost-cutting factors

  • The price of getting there. It usually costs far more to get to the US than Spain, for instance. Always ensure you get the cheapest deals to get to your destination (see the Cheap Flights, Cheap Hotels, Cheap Packages and Cheap Car Hire guides).

  • Do you stay in or go out? If you tend to stay in, focus on travel and accommodation costs (often cheapest in the Eurozone) as your spending is likely to be a small proportion of overall cost. Those who spend a lot need a cheap destination for food, drink and activities.

  • Get the best currency deal. Use a special credit card to get the best rates. Overall winner Halifax Clarity is commission-free worldwide, with no ATM fees (full info in the Cheapest Travel Cards guide). Alternatively, use for the best cash deals.

Further reading/Key links

Get cheap currency:, Cheap Travel Money
Cut travel costs: Cheap Flights, Cheap Hotels, Cheap Packages, Cheap Car Hire