Swings in the pound and local price changes makes Bali the cheapest destination with the Algarve best value in Europe as a strengthening pound helps budgets stretch further in most resorts and cities.
Holiday costs for Britons were down in 70% of the 44 destinations surveyed in the Post Office Travel Money report, with prices falling by up to 30%.
Bali is the cheapest holiday destination overall, with a typical basket of holiday goods costing £31.48 compared with £115.06 in New Zealand, the most expensive destination surveyed.
The Algarve came out as the cheapest destination in Europe, with a basket of items costing £35.37.
The survey showed that although the pound was slightly weaker against the euro compared to last year (-1.9pc), prices have fallen 18pc in the Algarve. Conversely, Spain was the only country to record a significant price increase, with meal costs rising 22% on the Costa del Sol. This pushed Spain's basket of goods to £39.14, forcing Spain into sixth place.
Paul Havenhand, head of travel at Post Office, commented, "We urge cost-conscious holidaymakers to include a comparison of exchange rates for all the destinations they are considering before coming to a final decision. This is likely to make a positive difference to the overall cost of a holiday."
He added: "At the moment sterling is stronger against three quarters of the top Post Office holiday currencies."
Resorts are cheaper in Cyprus, Greece and Italy, the survey found, although Italy remains the most expensive destination in Europe with a basket costing around £81, twice as much as Portugal.
The basket includes items like an evening meal for two, a cup of coffee and sun cream.
Popular destinations this year are likely to include South Africa, Vietnam, Burma and Qatar, the Post Office said.
Post Office Travel Money Worldwide Holiday Costs Barometer:
© Jessica Winch 2014
