The fourth annual Holiday Money Report from Post Office Travel Money says rocketing inflation has seen Turkey prices soar by 44 per cent in a year, leaving the cost of a basketful of standard items in Spain costing barely half the comparable price in Turkey.

The list of top 10 cheapest destinations for British travellers converting pounds into local currency is headed by Hungary, followed by Thailand, Bulgaria, Spain, Indonesia, Czech Republic, Kenya, Malaysia, Japan and Croatia.

The report also warns that the eurozone countries, which saw holiday demand crash in 2009 as the Euro soared in value, are fighting back. They are helped by the fact that many think the Euro is now significantly overvalued.

The Post Office report says: “The eurozone, Europe´s most unpopular holiday club, have already resorted to discounting to redress the impact of the strident Euro, but it will be interesting to see how Spain, Greece and France, in particular, play their cards to reclaim bookings.

“A 30 per cent year on year price drop for tourist commodities shows that Spain means business. While Hungary is again cheapest overall, Bulgaria's Sunny Beach becomes the lowest priced beach resort.”

The report warns the so-called “Aldi effect” is about to hit travel; as the distinctive style of the no-frills supermarket shopping reaches the travel industry.

Consumers are expected to accelerate cost-cutting trends first seen in 2009, including out-of-season breaks, camping trips, budget accommodation and all-inclusive packages.

City breaks are expected to do well, with rising demand for shorter holidays.

Cruising is also expected to sustain recent growth levels as “a good option for holidaymakers who want to know exactly how much their trip will cost in advance of travel”.

Post Office Money reckons long-haul travel will be boosted by major events in 2010, including the Winter Olympics in Vancouver, the World Cup in South Africa and the opening of Universal Studios´ Wizarding World Of Harry Potter in Florida.

Read more about it here: Travellers get more for their money in Spain – Telegraph.