Lisbon has emerged as the best value of 35 cities surveyed for Post Office Travel Money’s 16th annual City Costs Barometer, beating a strong challenge from Eastern European cities Vilnius and Krakow. However, the cost comparison by the UK’s largest provider of holiday money found that the weaker pound and surging hotel prices mean British tourists planning a city holiday will need to choose their destinations carefully or face paying up to 76 per cent more than last year.

At £225, Lisbon’s barometer cost was just two per cent higher than last summer, helping the city reach the top spot for the first time. Two nights in a three-star hotel averaged £121, only 5.2 per cent up on 2022, compared with rises of over 30 per cent in every other city surveyed. At the same time, the cost of 11 other typical city break items (a meal for two, range of drinks, sightseeing and transport) was 1.5 per cent lower than last year. As a result, prices in the Portuguese capital were less than a third of those in Europe’s most expensive cities, Venice (£687) and Amsterdam (£727).

Research into holiday intentions for 2023 reveals that 40 per cent of Britons planning trips abroad will take a city break, while a separate Post Office survey shows that Lisbon is the only top 10 city in the City Costs Barometer to be named among the most popular 10 choices for holidaymakers planning city visits. The other top 10 choices named in this research – Paris, Barcelona, Amsterdam, London, Rome, Edinburgh, Madrid, Dublin and Berlin – are among the most expensive cities in Europe, according to the barometer research.

Britons hoping for a low cost break might be better advised to head to the Baltic Republics, Poland or Greece, whose cities feature in the City Costs Barometer top 10. Lithuania’s capital Vilnius (£226), rated top city by the Post Office in 2019 and 2020, proved a close runner-up to Lisbon – just 25p more expensive for the barometer items. Two other past winners – Krakow (3rd place, £251) and Athens (4th, £262) – complete the top four cities.

The barometer research found that British tourists can also bag a city break bargain by choosing from Riga (5th, £285), Zagreb (7th, £330), Budapest (8th, £331) or Warsaw (9th, £331) in Eastern Europe, or Portugal’s second city Porto (6th £325) and Lille (10th, £332) in Western Europe.

However, barometer prices have increased in all 35 cities surveyed this year, and significant accommodation rate rises are the key factor in inflating the costs faced by British visitors. Two-night hotel stays have increased by over 50 per cent in 27 of the 35 cities – with the biggest rises since summer 2022 in Madrid, up 139 per cent from £161 to £385 – and Berlin, up 121 per cent from £168 to £372.

 “This year’s rise in prices makes it even more important for holidaymakers to do their homework before booking a city break. The increased price of accommodation could add hundreds of pounds to the overall cost of a holiday so travellers need to budget carefully for this. We also advise checking costs for meals, drinks and sightseeing before booking, as these are items that most city break tourists will incur. As this year’s barometer shows, there are wide variations in costs between cities and people who are prepared to swap destination can make their pounds stretch much further by choosing a cheaper capital like Lisbon or Vilnius.”, says Laura Plunkett, Head of Travel Money at Post Office.

By comparison, price rises for meals, drinks, transport and sightseeing are far lower than those for hotel stays. 10 cities – Amsterdam, Barcelona, Copenhagen, Dublin, Dubrovnik, Florence, Madrid, Paris, Riga and Venice – registered rises of 10 per cent or less, while four – Stockholm (-14.7%), Bruges (-4.9 per cent), Krakow (-3.2%) and Lisbon (-1.5%) saw year-on-year falls.

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