Spain and Sri Lanka have emerged today as the best value destinations for holiday spending this year.

The Post Office holiday money report found that Spain topped the Post Office Worldwide Holiday Costs Barometer for the first time alongside Sri Lanka.

They are identified as jointly being the cheapest of 42 destinations after price cuts in the Costas.

At £36.14 for eight items, including an evening meal with drinks, Spain and Sri Lanka’s holiday cost totals were under half those of 21 other destinations and a quarter the cost in Australia and South Korea, the most expensive countries surveyed.

Despite resort price rises, Sri Lanka is named as one of 10 holiday hotspots for 2013, as the country should gain from a sterling exchange rate 16% stronger than a year ago and more competition in the air as British Airways resumes flights this spring.

Mexico – eighth in this year’s barometer with a basket total of £48.93 – is also named in the hotlist. This comes as Post Office peso sales rose 34% last year, contributing to a growth of 216.5% since 2007.

Low hotel and resort costs as well as more direct flights to Cancun should help Mexico maintain a momentum that has made the peso one of the Post Office’s 10 fastest growing currencies for three years running.

The Spanish Costas face stiff competition in the Eurozone from Greece, where room rates are down by up to 40% and an 18% drop in resort costs (Corfu: £57.50), the biggest fall in Europe, should help boost demand.

Elsewhere, Eurozone prices rose 6% in Sorrento, Italy (£87.06), making the country 50% pricier than Greece.

The Post Office tips both Croatia and Turkey as rising in popularity. Croatia is one of its top ten destinations after a doubling of Croatian kuna sales in five years.

Post Office head of travel money Andrew Brown said: “There are growing signs that UK holidaymakers now check the value of sterling and the costs they face in overseas resorts before booking.

“The destinations which benefited last year were those where the power of the pound put more money in the pocket or where the price of meals and drinks meant holiday cash stretched further – and often a combination of the two. We expect to see the same pattern emerging in 2013.”

He added: “Turkey had a tough year in 2012 because of reduced flight capacity from the UK.

“However, the country has a well-deserved value for money reputation and the drop in visitor numbers last year resulted in healthy competition between restaurants and bars. Provided resort costs remain at their current levels and sterling holds its value, there will be plenty for holidaymakers to look forward to visiting Turkey this year.”