The Portuguese capital was the cheapest of 35 European cities for the first time in the Post Office City Costs Barometer’s 15-year history. The report also found costs had risen in all 35 destinations largely due to escalating accommodation rates, which in some cases have doubled.

The research found prices in Lisbon were under a third of those in Amsterdam or Venice, the two most expensive cities. Lisbon’s package price of £224.76 for two nights in a three star hotel plus transfers, dinner, sightseeing and sundries narrowly beat Vilnius (£225.01) and third place Krakow (£250.91), which were among four Eastern Europe cities in the top 10. 

Lisbon also boasted the cheapest accommodation at £121 and the lowest price meal for two at £39, with costs being just 2% higher than last year.

The Post Office warned the weaker pound and soaring hotel prices meant city breaks were up to 76% more expensive than last year. Hotel rates in all cities except Lisbon have risen by more than 30% since last year, with accommodation costs in 27 of 35 cities surveyed rocketing by more than 50%.

The biggest hikes in hotel rates since summer 2022 were seen in Madrid, up 139% from £161 to £385 and Berlin, up 121%, from £168 to £372. However, the most expensive rooms were in Amsterdam (£525) and Venice (£480).

Generally, price rises for other costs like transport and sightseeing are more moderate, with four cities, Stockholm, Bruges, Krakow and Lisbon seeing a fall in rates compared to 2022.

Laura Plunkett, head of Travel Money at Post Office, said: “This year’s rise in prices makes it even more important for holidaymakers to do their homework before booking a city break. 

“The increased price of accommodation could add hundreds of pounds to the overall cost of a holiday so travellers need to budget carefully for this.  We also advise checking costs for meals, drinks and sightseeing before booking, as these are items that most city break tourists will incur.  

“As this year’s barometer shows, there are wide variations in costs between cities and people who are prepared to swap destination can make their pounds stretch much further by choosing a cheaper capital like Lisbon or Vilnius.”  

Within the UK, Cardiff, with a package costing £387 and in 14th place, rated best value of the four capitals, 27% cheaper than Edinburgh (£535). At £561, London (28th) has seen the cost of two nights’ accommodation treble to an average £361 since last surveyed in 2021. The same applied for Belfast (£562), where accommodation rose from £221 to £392.