The Latvian capital was found to be the lowest priced out of 13 destinations included in an annual report by Post Office Travel Money.
The research took into account the cost for two people of a flight or Eurostar ticket, bed and breakfast accommodation, airport transfers, two evening meals with wine, coffee, festive drinks and snacks at a Christmas market.
A good choice of low-cost hotel accommodation and flights saw Riga come out on top for the third year running.
The total price for the basket of goods analysed was 36% lower than in Vienna, the most expensive city.
Lille offers the best value in Western Europe due to a 17% year-on-year price fall.
Nick Boden, of Post Office Travel Money, said: "Our research found that Prague was one of only three cities where package prices have risen.
"Big falls of over 25% in many other cities suggest there is more flight and hotel availability this year, resulting in strong competition for business and lower prices.
"This makes it a great time for holidaymakers to plan bargain Christmas markets trips."