Half (51%) of Britons plan to travel abroad this year despite concerns about holiday costs – rising to 58% of younger people aged between 16 and 34 – new research reveals.
Three-in-five (60%) have already booked their holiday – although almost a quarter (23%) are waiting to book in the hope of securing a discounted late package, according to Post Office Travel Money research.
The study confirms that holidays abroad are a priority for many Britons.
But half (51%) of those planning overseas travel admit that they will have to dip into savings in order to fund their trip abroad.
A quarter will reduce spending on other areas to afford the holiday, with 12% delaying plans for home improvements or a car purchase.
Prices in resorts and cities are one of the biggest concerns for holidaymakers planning trips abroad.
Consumer research found that 84% – rising to 89% of family travellers – said that costs for items like meals and drinks would be one of their biggest considerations when choosing their holiday destination.
And 90% of those planning overseas holidays were concerned about overspending their budget.
The findings came as the Post Office Travel Money found that prices for meals, drinks and other tourist essentials have fallen since last year in 25 out of 40 resorts and cities surveyed.
But it is the strength of sterling rather than prices charged in restaurants, bars and shops abroad that will make many destinations cheaper for British visitors.
The research reveals year-on-year local price rises for tourist commodities in four out of five destinations.
However, once these prices are converted to sterling, UK tourists can expect to pay less than a year ago when visiting 19 long-haul destinations and six in Europe.
The price falls apply to seven of the 10 destinations offering British visitors the lowest prices.
The former port city of Hoi An in Vietnam was found to have the lowest price for eight tourist items, including drinks and meals, at £51.18 – down 14.4% year-on-year.
By contrast, local costs have risen in Cape Town by almost five per cent, even though sterling has surged in value against the rand.
At £54.35, the South African city is the runner up in this year’s cost comparison, just ahead of third-placed Kenya (£54.93), where costs in Mombasa have fallen by seven per cent.
Tokyo has moved up four places into fourth position after seeing costs fr the essentials fall by 16.2% to £59.05.
Although British holidaymakers continue to rate Spain as the best value destination, the country does not feature in the top 10 and has fallen to 14th place after recording a 9.3% price rise this year to £81.45.
Portugal’s Algarve is the best value out of 15 European destinations surveyed, with a 1.2% drop in prices to £59.69, overtaking Turkey and Bulgaria, where price rises have seen Marmaris and Sunny Beach fall from last year’s top three to seventh and ninth places respectively.
Despite the downward spiral of the Turkish lira, local prices in Marmaris restaurants and bars have more than doubled as owners try to overcome the challenge of inflationary price rises.
Even after applying the favourable sterling exchange rate, holiday barometer costs have risen 14% to £66.07. Prices are up 6.4% in Sunny Beach, Bulgaria to £62.49, once Europe’s bargain destination.
Cyprus is the fourth European destination in the best value top 10. At £73.32, Paphos takes tenth place as a result of a 6.8% drop in costs – the biggest price fall in Europe after Budapest, where prices are down 10.7% to £90.41.
Bali and Egypt complete the top 10 destinations. Prices in Kuta are down 6.7% to £63.31, while costs in Sharm el-Sheikh have fallen 17.6% to £61.37 as a result of the devaluation of the Egyptian pound in early March.
Tamarindo in Costa Rica was found to be the most expensive destination at £158 following a 13.2% year-on-year rise due to the growing strength of the Costa Rica colon.
The same applies to Cancun, Mexico, once in the best value top 10 but now down to 33rd place after a price rise of 16.7% to £127.10, mostly due to the strength of the Mexican peso.
Laura Plunkett, head of Post Office Travel Money, said: “The barometer results make it clear how important it will be this year to consider how sterling’s strength has impacted individual destinations.
“Holidaymakers intending to travel long-haul can expect to get more for their money because the pound has gained ground in most destinations.
“By comparison, sterling’s gain against the euro has been more modest so it will pay to compare eurozone destinations to see which offer the cheapest prices.
“Portugal and Cyprus look the best choices for bargain hunters.”