Palma.—With holiday bookings for Spain, and in particular the Balearics, out stripping last year in the United Kingdom and millions of Britons rush to guarantee some sunshine as the heavy snow sets in after an Autumn of heavy floods, the country received an extra welcome boost this week.

Spain and Sri Lanka have come out joint top as the cheapest destinations this year in the seventh annual Post Office Holiday Money Report.
The price of eight items, including a three-course meal for two, sun cream and a cup of coffee, came in at £36.14 for both, well under half what you'd pay in the most expensive destinations.

While holiday makers are likely to spend around the same amount in each country, because flights are a lot cheaper to Spain it is the top destination for bargain hunters.

Price cuts in the Costas and the Balearics have helped Spain win the top spot, while Sri Lanka made the grade because the Sterling exchange rate is now 16% stronger than a year ago.

On the other end of the scale, Seoul is the most expensive location with the same basket of goods coming in at £146.93, followed by Darwin at £145.28 and Auckland at £127.67.

The results show a big difference between those countries at either end of the scale.
For example, it would cost an extra £110 for the same group of items if you were in Seoul instead of Spain.
But you also need to take into account transport. Flight costs to long-haul destinations will always be more expensive so therefore European countries will be cheaper.

However, when looking at Eurozone countries, there's quite a difference in prices. Spain, for example, has seen a fall of 50% in eating out in the past five years.

In Greece it's now 40% cheaper for a hotel room and 18% cheaper to stay at a resort. However, in Sorrento in Italy, prices rose 6% making the country 50% more expensive than Greece.

The hot list of 2013 The Post Office has also picked out ten destinations which it predicts will be very popular this year. Turkey has returned to this list for the first since time since 2008 after food prices in Marmaris fell 22%.

Sales of the Croatian currency Kuna have doubled in five years, as it becomes a more popular holiday destination. Sales have also shot up for Peso as more tourists flock to Mexico - it's become one of the fastest growing currencies of the past decade, according to Post Office sales.

Vietnam is also included with sales of the Vietnamese Dong shooting up by 51% in the past year as a reaction to the introduction of direct flights from the UK.

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.”

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