The cheapest tourist destination in Europe? It is neither in Spain nor, even less, in Italy. Portugal once again stands out as one of the continent’s most underrated countries, offering scenery and weather ideal for a holiday, paired with prices that do not appear to reflect the rising cost of living.

According to the “Family Holiday Report 2026” compiled by Post Office Travel Money, the most affordable summer destination in Europe is in Portugal, based on a comparison of meal, drink, sunscreen and other typical holiday expenses. The Algarve, Portugal’s southern region, tops this particular ranking, followed by Sunny Beach in Bulgaria.

The report finds that typical family holiday expenses are 2.7% lower than last year, bucking the prevailing trend, and individual items are very affordable: a coffee averages €1.49, a beer €3.07 and a glass of wine just €4.08. These conditions help keep costs under control while enjoying the Algarve’s beaches, a coastline that stretches about 150 kilometres in one of Europe’s sunniest regions.

Among the Algarve’s most popular destinations are Faro and Portimão, which are experiencing a real boom in visitors during the summer months, likely helped by the area’s very accessible prices and overall affordability.