Holiday cost report highlights east/west Med divide

Resort prices in the Costa del Sol have fallen 40% in five years, according to the latest research by the Post Office.

Its Holiday Money Report, which identifies holiday hotspots based on exchange rate trends and local costs in resort, found Spain was the second cheapest destination in 2012.

Turkey, once regarded as one of Europe"s cheapest destinations, could only achieve 17th place and was 60% more expensive than Spain.

Sarah Munro, Post Office head of travel money, said: "Given that sterling is worth around 20% more than a year ago against the Turkish lira, we expected to see a lower barometer cost for Turkey, especially as the country had a disappointing 2011.

"However, we were surprised to find that local costs have actually risen by 21% and it is only the strong sterling exchange rate that is masking that increase."

"It will be interesting to see how Turkish resorts respond to the challenge presented by Spain and Portugal. With Greek tourism also facing a fight for survival, we could see a price war between the eastern and western Med in 2012."

The report found sterling is stronger against 29 of its major currencies than a year ago, which will help deflect the pain of higher package prices and rising resort costs in two-thirds of destinations featured in the barometer.

The biggest rises were recorded in Kenya (+52%, £69.70) and Portugal (+39%, £45.58) - the latter falling from top spot in 2011 to seventh place this year.

Cyprus was the only eurozone destination of seven surveyed to show a clear fall in resort costs - down 8% (£53.19).

Sri Lanka was the cheapest by far of 40 destinations, rising from fifth place in 2011.

At £27.95 for eight items, including dinner for two with wine, a year-on-year fall of 31% made Sri Lanka 26% cheaper than runner-up Spain.

by Bev Fearis