I just came back from the best holiday with a friend of mine and thought I'd share it because I'd seen posts about splitting bills on holiday causing friction with friends and that wasn't my experience at all.
We went to a European city for four days and agreed in advance on a budget. She paid for the flights and I paid for the accommodation. We agreed we'd each pay for each other and then split down the middle 50/50 at the end. I wasn't drinking alcohol because I'm pregnant and so she tipped at each place to kind of address the imbalance (neither were fussed about pennies).
Anyway we went and we each paid for the other's food and and drinks. She paid more than me to try and make up for the fact that the hotel was cheaper. By the end we had it almost even (she owed about £30). That money was paid the day we got back.
0 fuss, 0 arguments. All ran smoothly. What I've learnt is set boundaries before you go. It was our first time holidaying together and we're already planning our next trip 🎉