The destinations where your pound will stretch the furthest this summer

Telegraph

17-03-2025

British holidaymakers seeking value on their next getaway should consider the Algarve, Cape Town and Tokyo, according to the latest Post Office Holiday Money Report.
Post Office Travel Money's Laura Plunkett said: 'It's interesting to see the Algarve back at the top of the barometer chart again and this is largely down to the remarkable consistency in its low prices for meals and drinks.'
The Post Office researchers assessed the price of a number of popular items, like coffee, beer, and a three-course meal, across 47 destinations.
Bottom of the list for affordability was New York City, despite the fact that the pound is up against the dollar in recent weeks.
The report also spells out the currencies against which the sterling is performing well in 2025, pulling out Turkey, Egypt and Mexico as some of the destinations where you will feel considerably better-off after exchanging money this year.
Likewise, there is a list of countries where the pound is less powerful compared to last year, including Kenya and Thailand.
Let's take a deep dive into the destinations where your pound will stretch the furthest in 2025.
Sterling stretches far in Turkey, Egypt and Mexico
You will feel considerably richer in some corners of the world. In Mexico, the pound is up 21.1 per cent against the Mexican peso compared to 2024. This means that £500 will buy you £87.01 more than it did last year.
It is a similar picture in Brazil, where the pound is up 18.3 per cent against the Brazilian real, meaning you will have an additional £77.37 in your wallet if you change £500.
One of the most eye-catching currency shifts is in Turkey. The pound is up an astonishing 114.7 per cent against the Turkish lira compared to 2023. This means that changing £500 will give you an additional £267.12, compared to two years ago. It is worth noting, however, that Turkey is suffering extremely high inflation right now.
The other country where your sterling will stretch notably far compared to recent years is Egypt. The pound is up 79.6 per cent compared to 2023, meaning your £500 will get you an additional £221.64. Note, however, that the pound only grew 3.5 per cent against the Egyptian pound since 2024, so the exchange rate swing is slowing down.
The pound is up 1.8 per cent against the Euro, giving you £9.06 more out of your £500 exchange, and sterling is up 0.8 per cent against the US dollar, buying you £4.10 more – which will just about cover the cost of your first caramel latte.
Backpacker destinations offer less bang for your buck
Sterling is down against a handful of currencies, although thankfully – from the perspective of the British holidaymaker – the negative swings aren't as severe as the positive gains. The bad news for British backpackers is that some of the currencies outperforming sterling are in south-east Asia and South America: firm favourites on the gap-year trail.
The Kenyan shilling is 7.1 per cent up against the pound, the Thai baht is 5.3 per cent up, and you'll also be getting less favourable exchange rates in Malaysia, Chile, South Africa, Sweden and Peru.
The country where a beer costs £1.53
The most pertinent section of the Post Office's latest Travel Money Report is, of course, the part where they crunch the numbers on specific holiday items like wine, beer and coffee.
The cheapest beer across the report's 47 destinations is found in Hoi An, Vietnam. A bottle of 330ml local beer at a bar costs just £1.53. The most expensive destination on the list is (you guessed it) Downtown Dubai, where a small beer at a bar will cost five times more: an average of £7.92 per can.
If it's a 200ml bottle of sun screen you're after, you will be able to pick one up for £4.44 in Delhi (the cheapest in the study), and a quite remarkable £23.94 in Grand Baie, Mauritius.
The best-value destination on Earth
The Algarve offers the best value of any of the 47 destinations assessed in the Post Office Travel Money Report.
The total cost for a cup of coffee, a small beer, a can of Coke, a glass of wine, a 1.5ml bottle of water, a bottle of sun screen, a bottle of insect repellent and a 3-course evening meal for two (with a bottle of house wine) is just £58.95.
Following close behind the Algarve in second place is Cape Town in South Africa, where that shopping trolley of goods comes to £59.84. Tokyo, Bali and Delhi are the other destinations where you can get all the above for under £70.
In Europe, the report found that Sunny Beach in Bulgaria, Prague and Spain's Costa del Sol are destinations that offer the best value after the Algarve. Corfu and Rome were among the more expensive European destinations on the list.
The worst-value destinations on Earth
The most expensive destination on the list is New York City, where the shopping trolley of goods comes to £167.85 – nearly three times as much as the Algarve. Notably, an average three-course meal in the Big Apple costs £128.27.
The other destinations near the bottom of the table for affordability are Hawaii, Nice, the Seychelles. Buying these items in Darwin, Cairns and Melbourne in Australia will also be heavy on the wallet.