The Algarve has been named the cheapest destination for UK tourists in 2017, a year that may be defined by the “currency conscious holiday”.

The popular Portuguese region has topped Post Office Travel Money’s worldwide holiday costs barometer for the second year running. The survey looks at the average price of tourist staples at 44 resorts and cities.

In the Algarve, the average price of a three-course evening meal for two, including a bottle of house wine, is £18.27 – more than £150 cheaper than the equivalent meal in Dubai (the most expensive destination) and half the price of similar European tourist spots, such as Corfu or Malta.

Sunny Beach, Bulgaria, was the second-best-value resort, where a bottle of local beer costs 69p and an evening meal for two £23.15. In third place is Spain’s Costa del Sol, which has seen a drop in local prices over the last year.

Other good-value destinations include Marmaris in Turkey, Prague and Budapest, where a meal costs around £30 and a bottle of beer about £2.

Outside of Europe, destinations such as Cape Town and Cancun, Mexico, continue to offer good value for money, with the weak peso and stable prices being a factor in Cancun’s affordability. One surprise entry is Tokyo, which is ranked eight best-value destination, ahead of other Asian cities and resorts. In Tokyo the average price of an evening meal is £37.96, making it the best value long-haul destination this year.

A view of the Table Mountain Cable Car descending from Table Mountain, Cape Town, South Africa. Photograph: Neil Austen/Getty Images/Gallo Images

According to the survey, this is the result of prices falling in Tokyo over the past two years following an economic downturn. While the yen has risen in value over the past year – particularly against the pound, post-Brexit referendum– costs have still remained low in Tokyo.

James Mundy from Inside Japan Tours is surprised it is among the cheapest destinations, but says it is a misconception that Japan is an expensive destination.

“Japan has always been good value despite the reputation as ‘an expensive country,’” he says.

“Once you have paid for flights and accommodation, eating out in Japan and travelling around is relatively good value. There are some great options for eating out – such as all you can eat and drink at a traditional izakaya for around £30.”

While the falling value of the pound will have affected UK tourists’ spending power abroad, Post Office Travel Money says this is only part of the picture, with local costs playing a far bigger role in how far the holiday budget stretches. This is one reason why Portugal continues to be among the most affordable: the local price of a meal is down almost 5% year-on-year. Bulgaria has also seen a 1.5% fall in local prices, while the Costa del Sol has experienced a 3% drop.

Andrew Brown of Post Office Travel Money said: “Europe is looking unbeatable value with nine of this year’s 10 cheapest destinations, not to mention local price falls in half the European resorts and cities we surveyed.”

He added: “Further afield, Tokyo and Cancun are good bets for bargain hunters but don’t discount Cape Town or Bali. If the rand and rupiah fall in value, low costs on the ground could make these great choices too.”

According to another report released this week by hotel booking site trivago.co.uk, there is a similar disparity of prices between different cities within the UK.

It found Blackpool to be the cheapest place in the UK for hotel accommodation, with an average price of £63 a night in 2016. This is followed by Great Yarmouth and Scarborough, at £72 and £80 respectively.

Unsurprisingly, London was found to be the most expensive destination, with an average hotel price of £156 a night, followed by Bath, Oxford and Cambridge, with prices between £130-£144.