Kate Simon: How to make your holiday cash go that bit further

Do you want to know where you can make your holiday cash go further this year? Help is at hand in the shape of the latest Holiday Money Report, published last week by the Post Office.

This useful annual summary of how currencies have fared against sterling, and which sold the best across the Post Office counter, is a mine of information, from the biggest supplier of foreign exchange in the UK.

With sterling strengthening against the euro and other European currencies, it's no surprise to learn British holidaymakers are on course to get more for their money in Europe than in long-haul destinations. But by also looking at how prices in resort differ year on year, the report offers a rounded view of what impact a destination will have on our purse, courtesy of its Worldwide Holiday Costs Barometer (check out postoffice.co.uk/ holidaycosts2011).

This analyses the prices of eight typical holiday purchases – from a cup of coffee to a three-course meal for two with wine – across a number of countries, this year extended to 36. The bills are totted up and then compared with the previous year to see where you can expect to pay more or less.

This year Portugal grabs top slot. The price of the shopping list was slashed by half, year on year, to £32.84. Spain came second with an 18 per cent drop. Both are reeling from a couple of poor years, caused by the strength of the euro against the pound and high in-resort costs. Now, these destinations have taken the axe to prices in an attempt to win back their British fan base.

According to the report, resort discounting has become the flavour of the month, with Cyprus, Greece, Malta and France registering in-resort price falls. Turkey is also learning its lesson for putting up prices by as much as 44 per cent on the back of its increased popularity in recent years. Costs here fell by 20 per cent in the past year.

But if you're thinking of travelling further afield, beware of price rises of up to 39 per cent in Barbados, 32 per cent in Egypt and 30 per cent in Florida.

To save your pennies, consider Sri Lanka, the best long-haul performer on the barometer. Latin American currencies are a good bet, too, helped by new flights into Cancun and Costa Rica. You'll find the best buy in this region, with competitively priced packages and low costs on the ground for meals and drinks, down Mexico way.

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Should we care about the the withdrawal of Government backing for the star system for accommodation? Possibly not. The method, which I'm told was dreamt up by a hotel inspector inspired by the stars on a bottle of Hennessy brandy, has lost its authority – while a few serious bodies award stars, plenty of accommodation businesses categorise themselves.

But are sites such as TripAdvisor really a more reliable alternative? To my mind, they're still far too open to abuse from grumpy guests and unscrupulous rivals.