More than three-in-five people and 68% of families plan to travel abroad this year, new research shows.
Overseas trips are seen as the top priority after paying for food, energy and household essentials, according to a poll of more than 2,000 consumers.
Greece narrowly beat Spain and Portugal to rate as best value among 28 destinations surveyed in a poll of past visitors.
But the study by Post Office Travel Money also found that holidaymakers overspent at record levels on their last trip abroad.
The gap between budgets set and cash spent has widened to its highest ever level over the past decade.
Almost four-in-five (78%) set a budget averaging £334.47 per person on their most recent trip abroad, less than on their previous holiday.
Only a third of holidaymakers stuck to it and the remaining 67% bust their budget by an average of £154.62 – 46% more than planned and up seven per cent on their previous holiday.
And family overspending levels have almost doubled since before the Covid-19 pandemic. In 2019 families allocated a spending budget of £630 – significantly more than the £566 average now – and overspent this by around £159 against £312 now.
More than half (57%) laid the blame on restaurant meals, while 32% named food and drinks that they had bought from a local shop or supermarket.
Over a third (36%) attributed their overspending to the cost of drinks and 44% overspent on sightseeing and excursions.
All-inclusive holiday packages have traditionally been regarded as a good way to rein in spending and almost half (47%) of families plan this type of trip this year.
But the numbers paying extra for food and drinks in their all-inclusive resort has more than quadrupled over the past decade to 57% because fewer items are now included in the paid-for package.
The percentage paying for local brands of alcohol and soft drinks – once a cornerstone of the free drinks promise made by all-inclusive resorts – has grown to more than eight times the 2014 level when just six per cent of people paid for them. Furthermore, more than three-quarters of individuals and 81% of families head out to local resorts for meals and drinks.
Meanwhile, Greece came top with a score of 94%, ahead of Spain (93%) and Portugal (92%) when holidaymakers who had previously visited destinations abroad were asked which they rated as good value.
Thailand received the highest value for money approval rating of 89% among 14 long-haul destinations surveyed, followed by Mexico at 87%.
However, only two-thirds (67%) of visitors to the US said the country offered good value, while Dubai was ranked with the lowest score of 51%.
Laura Plunkett, head of travel money at the Post Office, said: “The opinions of holidaymakers who have visited a destination are really useful and likely to be a more reliable source of information about value for money than those expressed by people who have no direct knowledge of the country.
“Most of the 28 destinations included in our good value poll achieved higher scores from past visitors than among those who had to rely on what they had read or heard about the country.”
She added: “The evidence provided by holidaymakers who have travelled abroad in recent years makes it clear that most people set inadequate budgets and end up overspending as a result.
“Given the rising concerns about resort costs, we urge holidaymakers to think back to the overall cost of their last holiday and set a budget based on that experience. This will be the most practical way to avoid incurring extra fees for paying with a debit or credit card or having to withdraw cash from an ATM.”