Many of you may not be aware of how significantly the pound has fallen against the euro in recent weeks. But if you're holidaying in the eurozone this summer, you won't be able to escape it.

According to American Express, in the three months to 13 May the euros your £1 could buy fell from €1.57 to €1.34.

At the euro's lowest point, in the spring of 2000, sterling was worth 30 per cent more than it is today.

For anyone going to destinations such as France, Spain, Portugal, Italy or Greece, it means that a cold beer or a sun-lounger are likely to be distinctly pricier than last year. And if you are planning a DIY holiday that involves paying for accommodation locally, you will feel it even more acutely.

The good news is that most people who have booked package holidays will not have to pay any extra. Frances Tuke of the Association of British Travel Agents (Abta) says: 'Most big tour operators hedge the costs of hotels, flights and fuel to fix their prices as early as possible.'

Members must get Abta's permission before introducing any surcharges, and currently only two applications have been received from small specialist operators. 'Most holiday companies now have no-surcharge guarantees,' says Tuke. But she points out that smaller operators may be tempted to increase prices on holidays that have yet to be booked, while prices could undergo a general increase next year. Against that, she says, companies are reluctant to generally put up prices for competitive reasons, while some will absorb increases.

The position is worse for anyone booking a villa direct from the owner. In February, the €2,300 I agreed to pay for two weeks in the Dordogne looked as if it would cost just under £1,500; now it will set me back more than £1,700.

Nonetheless, Kim Winter, managing editor of Holiday Which? magazine, says that, by and large, Europe is still inexpensive for UK holidaymakers. 'We did a survey of hotel prices at every level and found that Britain is more expensive than any other country in Europe, including Switzerland and Sweden.

'We've had an incredibly strong pound against the euro over the past few years, but even at today's rates accommodation in France, Spain and Italy is very good value compared to Britain.'

People who have already booked holidays will have to decide whether to buy their euros for spending money now or hope the rate improves before they go away. Nobody can forecast the direction of exchange rates with certainty, and Simon Phillips, retail director at exchange bureau company Travelex, says: 'Over the next 12 months, the general view is that the rate will move in favour of the British traveller, but it is believed that it will not go higher than €1.5 to the pound, only 6 per cent better than today.'

But if you haven't booked yet and want to make your spending money go as far as possible, which destinations should you consider? Holidaying in Florida should certainly be cheaper, as the pound has risen by 11.5 per cent against the dollar in the past 12 months, according to Travelex. Phillips adds: 'With the US airlines reporting a decline of up to 40 per cent in overseas travel, "popular" American destinations may be a good deal, for example, the Caribbean and Mexico.'

Aside from looking further afield, your best chance of a bargain may be to take a holiday in the next month or so. Tuke says: 'May and June are still offering some very good prices, and in destinations such as Turkey, North Africa and Dubai there are really good offers.'