Algarve Named Europe's Cheapest Family Holiday Destination

Portugal's Algarve region has been identified as the most affordable European destination for families seeking a summer holiday, according to the 2026 Post Office Travel Money Family Holiday Report. The study, which compares the cost of essential holiday items across 22 popular destinations, found the Algarve to be the cheapest spot with a basket of ten key purchases costing £139.65.

The report noted a 2.7 percent decrease in costs in the Algarve since July of the previous year. Families can expect to pay approximately £1.27 for coffee, £2.62 for a beer, and £3.49 for a glass of wine in the region.

Sunny Beach in Bulgaria secured the second position with a total cost of £142.16 for the same basket of goods. Despite a 9.3 percent price increase, Sunny Beach maintained its runner-up status from the previous year. The resort offers the cheapest family evening meal with drinks at £73, compared to £78 in the Algarve.

Lanzarote in the Canary Islands took the third spot with a cost of £147, following a 2.8 percent price fall in the resort of Costa Teguise. It is the highest-ranking of eight Spanish destinations included in the report.

Following closely, Menorca in the Balearic Islands ranked fourth with £151 for ten tourist items. The average cost of a two-course lunch for two adults in Menorca is £27.96, with coffee priced at £2.18, beer at £3.06, and wine at £3.93.

The Costa Brava, another Spanish holiday hotspot, came in fifth place at £155. Popular destinations within this region include Lloret de Mar and Platja d'Aro. An average beer costs £2.23, and a three-course family meal with drinks is £86.73.

Tenerife, also in the Canary Islands, placed sixth with a total of £158.31. Coffee is priced at £1.75, beer at £2.62, and insect repellent at £5.24.

Marmaris, Turkey, ranked seventh with a cost of £159, despite a 23 percent rise in barometer costs. The resort has fallen from its top position last year.

The Costa del Sol in Spain came in eighth place with a total of £163. Coffee costs £1.75, beers are £2.97, and three-course meals are under £82.

Costa Blanca, Spain, secured the ninth position with an overall cost of £173.41. Beer is priced at £3.49, and two-course lunches are £31.45. The region boasts 151 Blue Flag awarded beaches.

Paphos, Cyprus, rounded out the top ten with a cost of £177.18.

The report also highlighted that 46 percent of UK families are increasing their holiday budgets for the upcoming summer due to rising prices. However, 85 percent of families reportedly exceeded their previous budgets by an average of 49 percent.

Italy's Sorrento was identified as the most expensive resort in the survey, with an average cost of £268, largely due to a family evening meal costing approximately £150. Sorrento's prices were found to be nearly double those in the Algarve.

Laura Plunkett, head of Post Office Travel Money, advised families to research costs to inform their holiday spending. She noted that Portugal and Spain offer great value for money, with Bulgaria's Black Sea resorts also being strong contenders for budget-conscious travelers.