The best cities for backpackers

Oct 28, 2025

Backpacking can be flexible, exciting, and life-changing in so many ways if you plan on seeing the world either once you finish university or want an extended holiday to explore new countries and experience different cultures.

Travelling the world and visiting new countries and exotic places is exciting but costs can add up quickly, with flights, accommodation, and food as well as other excursions. Backpacking and staying at hostels can help keep the costs down but where in the world has the best value for money for travellers?

Our travel insurance experts at Compare the Market have crunched the numbers to see where is the cheapest for backpackers to visit, and which destinations offered the best combination of low prices, safety, and budget-friendly food and activities.

Collating a list of the top 35 global backpacker hotspots in 2025, we ranked each city based on hostel cost and availability, food and drink costs, local safety scores, the average price for public transport, and how many free activities are available before scoring them out of 100 to see how suited they really are for backpacking trips.

The best cities for backpackers to visit

Rank	City	Country	No of Hostels	Avg Hostel Nightly Rate (AUD)	No of Free Attractions	Safety Score	Avg Inexpensive Meal Cost (AUD)	Avg Domestic Beer Cost (AUD)	Avg Coffee Cost (AUD)	Avg One-Way Public Transport Cost (AUD)	Total Score (Max 100)
1	Bali	Indonesia	265	$7.60	466	49.51	$4.56	$3.88	$3.59	$0.41	75.27
2	Chiang Mai	Thailand	131	$18.25	179	77.87	$3.10	$3.47	$2.94	$1.43	67.28
3	Chengdu	China	13	$12.17	35	79.76	$4.27	$1.70	$4.18	$0.64	57.09
4	Siem Reap	Cambodia	29	$10.65	98	67.64	$3.80	$1.52	$2.54	$1.52	56.43
5	Phuket	Thailand	76	$22.81	333	60.49	$9.55	$3.35	$4.65	$2.27	56.23
6	Ho Chi Minh City	Vietnam	59	$13.69	209	49.54	$2.87	$1.61	$2.75	$0.41	55.10
7	Luang Prabang	Laos	16	$10.65	52	61.03	$2.81	$2.02	$2.40	$0.90	52.79
8	Cusco	Peru	56	$21.29	74	58.97	$4.33	$3.47	$3.18	$0.44	52.77
9	Beijing	China	12	$41.06	100	74.73	$6.42	$1.70	$4.43	$0.85	51.18
10	Colombo	Sri Lanka	20	$16.73	103	57.72	$6.28	$3.51	$4.06	$0.27	49.96

The top 5 best cities for backpackers

From the sunny sands of Phuket to the chittering jungles of Bali and Cambodia, there are countless incredible countries out there just waiting to be explored, but which are the best budget travel destinations?

1. Bali, Indonesia

Ranking first was Bali as a backpacking hotspot, known for its digital nomad community. Anyone who’s been keeping an eye on travel news and insights in recent years won’t at all be surprised to hear that Bali topped our list.

Clocking in an impressive score of 75.27 out of 100, Bali takes first place for total available hostels at 265, more than double any city in our list, while also having the cheapest nightly hostel rates at $7.60 AUD per night and one of the highest numbers of free attractions available.

Bali had one of the cheapest average one-way public transport tickets costing as little as $0.41 AUD. An inexpensive meal would cost an average of $4.56 AUD and an average coffee price was $3.59 AUD. When it comes to safety, Bali scored a safety score of 49.51 out of 100, showing the importance of considering travel insurance in advance.

2. Chiang Mai, Thailand

Next up, we have Chiang Mai in Thailand, ranking second with a solid score of 67.28 out of 100. Chiang Mai is the city with the second most hostels available for travellers (131), as well as having the third best safety score out of every city on our list (77.87). Dining out is also relatively inexpensive here, with the average cost of a meal being $3.10 AUD (third lowest), and a local coffee will set you back just $2.94 AUD.

Even the beer in Chiang Mai is relatively cheap, as the average pint is priced at $3.47 AUD. However, with higher public transport costs of $1.43 AUD per one-way ticket and a nightly hostel cost of $18.25 AUD, Chiang Mai does lose out to Bali on overall affordability.

3. Chengdu, China

Moving further inland and straight to the heart of China’s Sichuan province, our third-best city for backpackers is Chengdu. Coming in with a respectable total score of 57.09 out of 100, Chengdu has the 2nd best safety score on our list at 79.76 out of 100 – sitting just behind that of Queenstown in New Zealand.

Great news for any backpacker hoping to experience the active nightlife, the price of a beer is an average of $1.70 AUD per drink, which was fourth cheapest in our list. Food prices are also low in this city, with a lunch costing an average of $4.27 AUD, while a one-way ticket on public transport averages out at $0.64 AUD.

But with these low costs for backpackers there are a few areas where Chengdu falls down. For one thing, Chengdu has an incredibly low number of registered hostels at only 13, while also having the second-lowest number of free attractions with 35. Though if you do decide to visit this city, then your hostel costs are affordable, priced at an average of $12.17 AUD a night.

4. Siem Reap, Thailand

Popping back down to Thailand’s next-door neighbour for our fourth ranked city, Siem Reap, home to Angkor Wat and many other iconic temples, which is another affordable travel destination in Thailand.

Siem Reap offers backpackers a nice blend of affordability and local food opportunities when it comes to food, beer, and coffee – placing fourth for the average cost of a meal at $3.80 AUD and second cheapest for a beer and a coffee, which cost around $1.52 AUD and $2.54 AUD respectively.

For safety, Siem Reap might not perform as well as Chengdu or Chiang Mai, with a total safety score of 67.64 out of 100, but is the ninth safest destination on our list. This combined with a total hostel count of 29, and an average hostel night cost of only $10.65 AUD (the second cheapest after Bali), and Siem Reap certainly has plenty to offer the budding traveller.

5. Phuket, Thailand

Ranked fifth was Phuket scoring 56.23 out of 100. This renowned Thai island only misses out on our fourth spot by a whole 0.20 points, but it’s still one of the most budget-friendly travel destinations on our list.

Phuket is home to the third highest number of hostels on our ranking, with 76 dotted around the island, alongside 333 free attractions. And those wanting to kick back and relax in the sun will be pleased to hear that local beer prices average $3.35 AUD.

Phuket has higher hostel costs than other destinations in Thailand, likely due to being an island with an average rate of $22.81 AUD per night, while lunch could cost as much as $9.55 AUD. Meanwhile, the average cost of a one-way ticket on public transport sits at $2.27 – the most expensive of our top five.

The bottom cities for backpackers

Now that we’ve covered the best cities on our list for backpackers, what about those cities that are more expensive for backpackers that have wound up sitting at the bottom of our list?

1. Dublin, Ireland

A world away from the likes of Bali and Siem Reap yet packed full of its own distinct charm and character, Dublin has the unenviable position of being the lowest-rated city out of our list of 35 destinations for backpackers, with a score of 22.23 out of 100.

Now, let’s be clear, this in no way means that Dublin is a bad backpacking spot. However, it does leave something to be desired (weather not withstanding) compared to many of the other destinations we looked at.

To start, Dublin is an expensive city, with the average nightly cost of a hostel at a massive $103.41 AUD, and you’ll only have 12 hostels to choose from across the whole of the city. An average meal cost as much as $39.46 AUD.

Beer is also very expensive in Dublin, averaging $12.56 AUD a pint, which is the second most expensive, and coffee prices aren’t much better at $7.31 AUD. To add to this, a one-way public transport ticket costs $3.59 AUD.

2. Cairns, Australia

Jumping to the other side of the world for the second lowest place in our list we have Cairns, Australia. Despite being known as the gateway to the Great Barrier Reef, Cairns’ popularity as a tourist destination also makes it quite expensive to visit, hence why it only scored 26.35 out of 100 overall.

Case in point, beer is pricey here, averaging $9.95 AUD a pint, while coffee prices are an average of $6.22 AUD. Cairns also takes an even higher spot when it comes to public transport cost, with one-way tickets coming to $4.97 AUD on average, while the average night in a hostel is around $42.58 AUD.

However, the factor that really lets Cairns down is its safety score. At just 38.19, it was sixth worst safety score in our list, making it a less than stellar spot for solo backpackers looking for a budget friendly trip. In places like this, travel insurance can come in use to ensure you and your belongings are protected.

3. Seville, Spain

Ranked third last in our backpacking affordability index was Seville, which earned a total score of 32.80 out of 100. Much like Dublin and Cairns, Seville is ranked low because of its high prices. Seville had the most expensive average hostel price out of all the cities in our list, at $130.78 AUD per night.

For a one-way public transport ticket, it would cost you $2.60 AUD. The price of coffee, food, and drinks is not so expensive, with a beer costing $3.59 AUD and an inexpensive meal costing an average of $23.33 AUD.

As for safety, Seville scored highly, placing 12th overall with a score of 64.62 out of 100. But with only 25 hostels in total, those visiting Seville may need to be careful with their budget if they want to squeeze in everything on their sightseeing list.

Which regions are best for backpackers?

Hopefully, you now have a much better idea of the cheapest cities for backpackers to visit as of 2025, but what about if you’re interested in seeing an entire region rather than simply one small area?

Asia dominates this space when it comes to affordability and tourist-friendly attractions, with nine of our top 35 cities located on this continent, as well as all our top five backpacking hotspots.

Already well-known for its low cost of living and cheap prices in general, Asia’s dedicated focus on tourism has made it a haven for travellers, and with suitably high safety scores for most countries, you can spend less time watching your pack and more time getting out there and enjoying yourself.

Asia is just one continent that’s backpacker-friendly, and while it might not be as sunny or as cheap, Europe is home to some spectacular holiday destinations that you won’t want to miss out on – especially if you opt to visit less well-known and more affordable countries like Romania and Croatia.

Similarly, South America, which is rich in historical culture and affordably priced, has a thriving tourism market that’s really starting to take off – though with lower-than-average safety scores, travellers will need to be more safety conscious when doing activities solo.

Finally, when discussing backpacking destinations, we just wouldn’t be doing our job if we didn’t mention the country best known for its adoption – Australia! While we didn’t necessarily score that highly on our index, Australia is a must for backpackers, especially those on their first trip, with cities like Sydney being an ideal starting ground for finding your travelling feet.

See the best cities for backpackers in 2023.

Our top backpacking tips

If you’re already an experienced backpacker and you’re simply looking for your next destination, then we’re sure you’re already well-versed in those essential backpacking habits that make preparing for each expedition easier.

However, if you’ve never backpacked before and you’re looking to try it for the first time, then you’ll be doing yourself a huge favour by following our top expert tips below:

Pack light – While it might be tempting to cram in every little essential you can think of into your bag, the last thing you want when backpacking is an oversized rucksack weighing you down with unnecessary gear. Instead, only pack what you know you’ll need (key toiletries, clothes, casual shoes, a water bottle) and buy any extras when you arrive; you can always wear your walking boots on the flight and wrap your coat around your waist to save on pack space.
Do your research – Doing your research is very important before you reach your destination. Try to find the best hostels for your kind of trip (party hostels are not going to be for you if you want proper sleep) and be sure to look up recommended travel advice for each country and city so you can stay safe as you move about.
Bring a first aid kit – Although it’s unlikely, no conscious backpacker should go anywhere without a first aid kit strapped to their back. A must in case you or someone you’re with hurts themselves; this is the sort of thing you’ll be glad you have with you should the worst happen.
Keep an emergency fund – Arguably, backpacker rule number one, keeping an emergency fund securely stowed away is essential in case you go over budget or lose whatever money you have on you. That way, you can still get back to your hostel and make new plans.
Find others to travel with – As fulfilling as solo travelling can be, at the end of the day, there are some experiences out there that are just made better with other people. So, even if you plan on doing plenty of travelling by yourself, don’t forget to chat and hang out with those staying in the same hostel as you; you never know where you might make a new friend!

Naturally, on top of these tips, you’ll want to look at getting the right travel insurance in place. As Adrian Taylor, our Executive General Manager of General Insurance, points out:

“It’s difficult to overstate just how important it is to have travel insurance in place before you go away, especially if you’re visiting a country on your own or are travelling with valuable items in your luggage.

“You can’t predict what’s going to happen when you’re abroad. While major incidents are uncommon, smaller inconveniences, such as replacing a damaged phone or flight delays or even an injury, can eat into your holiday fund, so it’s best to make sure you’re covered.

“Fortunately, comparing travel insurance is easy with Compare the Market. With so many options available for you to browse through, you’ll have no trouble looking for options for your next trip abroad.”