The gorgeous European destination that's been named as the world's cheapest holiday

The Algarve offers the best value holiday for Brits (Image: Getty)

This beautiful region has been named as the world's cheapest holiday destination and its only a few hours away from the UK. The Algarve located in southern Portugal is full of high quality beaches and golden cliffs that attract visitors from across the globe. Not only does it boast stunning landscapes, visitors can go and explore the region's beauty without having to fork out a fortune.

According to the Post Office's Holiday Money Report 2025, the Algarve is the cheapest holiday destination this year for UK holidaymakers. The report compared the cost of eight tourists items across 47 destinations to find out which destination offers the best value for travellers. For a cup of filter coffee, bottle of local beer, can of Coca-Cola, glass of wine, 1.5l bottle of water, suncream, insect repellent and a three-course meal for two including a bottle of house wine, the total in the Algarve came up to £58.95 - just over a third of the price of the most expensive destination, New York.

The region's thermal town is a renowned retreat enjoyed by Portuguese royalty (Image: Getty)

Laura Plunkett, head of travel money at Post Office, said: “It’s interesting to see the Algarve back at the top of the barometer chart again and this is largely down to the remarkable consistency in its low prices for meals and drinks."

Every year, the stunning region welcomes over five million visitors who jet over to the destination and make the most of all that is has to offer. As well as its award winning beaches, the Algraves is also home to Caldas de Monchique, a well-known spa town which is even oftened used as a retreat for Portuguese royalty. 

The town nestled 250 metres above sea level in the Monchique Mountains has been famous since the Roman times for its "medicinal waters". Today, the Thermal Town offers a range of treatments from jet and vichy showers to hydro-massages and mud treatments providing a means of escape for those who visit. 

Faro is the region's historic centre (Image: Getty)

Not only is the region great for a tranquil getaway, it also has a number of bustling and vibrant towns that will get the adventurer out of you. There is so much culture and history to explore throughout the region and its historic centre Faro, which is also the capital of the region, is a great place to start.

The Municipal Museum is full of archaeological finds that bring life to the city's history. There are also several buildings including the Bishops' Palace where you will find the Catherdal which dates back all the way to 1251 and remarkable collections dating back to the 17th and 18th centuries.

Brits can take a direct flight to Faro from most UK airports including Birmingham, Bristol, Edinburgh, Glasglow, London Gatwick, London Heathrow, London Luton, London Stansted, Liverpool and Manchester, with Skyscanner showing one way flight tickets from just £34 this month.