Which European cities will your sterling stretch the furthest?

Economy & Politics | Reports

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In a much-expanded City Costs Barometer comparing costs in 48 European cities, Post Office Travel Money reports that lesser known cities in Eastern Europe dominate the best value for GBP.

Vilnius and Belgrade head a list of emerging cities where costs are lower than in more established Eastern favourites like Budapest, Krakow and Tallinn. Porto is the only city in Western Europe to break their stranglehold and rate among the 10 cheapest places for a bargain break. The 2019 report also found that prices have fallen in two-thirds of cities.

Vilnius, capital of Baltic State Lithuania, narrowly beat Belgrade to take the top spot in the 2019 City Costs Barometer. At £147.35, the total cost of 12 typical spending items – including a range of drinks, an evening meal for two with wine, two nights’ three-star weekend accommodation, sightseeing charges and city transport – was down 11.1% year-on-year. Prices in Serbian capital Belgrade, one of 10 cities first surveyed last August for the Post Office Unsung CitiesReport were £4 higher at £151.57, a rise of 1.9% since then.

The only other top 10 city where prices have risen since last spring is Riga (up 3.4% to £179, seventh in the table), although accommodation in the Latvian capital remains cheapest across Europe at £67 for a two-night stay for two people sharing a room.

Elsewhere in Eastern Europe, Warsaw (£160) has risen to third place from fourth last year on the back of an 11.5% fall in prices. Costs are also down 7% in Moscow (£187, ninth) and 5.3% in Prague (£190, 10th), enabling both cities to retain top 10 places.

There are five new entrants to the 10 best value cities, including Belgrade. Bucharest (fifth, £168), Porto (sixth, £173) and Bratislava (eighth, £182) are among the Unsung Cities first featured last August and prices in all three have dropped since then by 4.1 per cent, 6.1 per cent and 10.1 per cent respectively.

The other new entrant, Istanbul (£167), is one of four new cities to be surveyed and achieved fourth place because of the ongoing weakness of the Turkish lira, currently worth 31 per cent less than a year ago against sterling.Budapest (11th), Athens (12th), Krakow (13th), Lisbon (14th) and Lille (22nd) have dropped out of the top 10 cities as a result.

Although prices have fallen marginally (-1.4%) in Lisbon to £207, they are 20% higher than in Porto and the influx of cheaper emerging cities means that the Portuguese capital has lost its top 10 place for the first time in a decade.

Prices are down in two-thirds of cities

The report reveals that prices have fallen in 29 (66%) of the 44 cities for which Post Office Travel Money also researched prices in 2018. This rises to three-quarters of the 20 lowest-priced cities. 12 cities saw falls of 10 per cent or more, boosted in part by a stronger pound but also by lower local prices. The biggest falls were for traditional favourites including Venice, where prices dropped over 23%, and Amsterdam, again the most expensive eurozone city surveyed, despite a 17% fall in barometer costs.

Biggest city price falls

1.Venice -23.3%

2.Amsterdam -17.0%

3.Nice -14.4%

4.Madrid -14.3%

5.Oslo -13.0%

6.Vienna -13.0%

7.Copenhagen -12.9%

8.Warsaw -11.5%

9.Vilnius -11.1%

10.Valencia -11.1%

11.Berlin -10.7%

12.Bratislava -10.1%

Cheaper accommodation – based on an average of the 10 lowest priced three-star city centre hotels, B&Bs and apartments available for two nights over the last weekend in March – was the biggest contributory factor to the barometer price falls.

The Post Office said more availability had lowered prices in almost three-quarters (73%) of the cities surveyed. The biggest falls were in Amsterdam (down £95 for two nights) and Venice (down £77), while there were also big reductions of £54 in Madrid, £35 in Nice and £28 in Vienna.

Andrew Brown of Post Office Travel Money, which accounts for one-in-four UK currency transactions, said: “Sterling is currently stronger than a year ago against every European currency but that could change so holidaymakers would be wise to consider both exchange rates and the underlying costs they will incur on a city break before booking. Canny travellers can save hundreds of pounds by comparing the cost of accommodation and picking a city where hotel prices are low and where meals, drinks and sightseeing prices are also cheap. This applies to most cities in Eastern Europe but also to Porto, Athens and Lisbon.”

  • Prices have risen in 15 cities although the increases were below four per cent in 10 of these. The biggest price rise of 21.2% was in Krakow, last year’s best value city, while higher-priced accommodation in Lille has resulted in a 18.8% overall increase.
  • The five Nordic capitals (Copenhagen, Helsinki, Oslo, Reykjavik and Stockholm) were again among the priciest cities in the Post Office report. Stockholm was cheapest of these at £395, while Reykjavik was the most expensive city overall. However, the Icelandic capital’s £463 barometer total was almost 10 per cent lower year-on-year, thanks to the sterling surge.

Closer to home, Cardiff has been included in the survey for the first time and proved to be the cheapest of the four UK capitals at £293, just pipping Edinburgh (£295) to the title. London was the most expensive at £364, a year-on-year rise of 3.7%. Prices in Belfast fell marginally (-0.9%) to £313 and remain significantly lower than in Dublin. Although the gap has narrowed since last year, prices are almost 19% lower in Belfast, with higher-priced accommodation accounting for the higher barometer cost in Dublin.

With Britain’s Exit from the European Union less than a month away, Andrew Brown advised: “Budget carefully before setting off on a city break in Europe and keep an eye on currency fluctuations. Change enough money before leaving home to cover likely costs, especially as there are better exchange rates for higher value Post Office branch or online transactions.

“Another way to keep an eye on spending is by loading cash onto a Post Office Travel Money Card when exchange rates are favourable for the city you are visiting. The card is widely accepted in restaurants, shops and bars and, by using a pre-paid card like this, you won’t incur transaction charges abroad as you would with a credit or debit card.”

Euros are available on demand at over 9,000 Post Office branches and these can also be ordered online at postoffice.co.uk for same day ‘click and collect’ at selected branches, for next day collection at any branch or for home delivery. Other currencies featuring in the City Costs Barometer are available over the counter at more than 1,600 branches and for pre-order in all branches or online purchase.

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