ABTA appeared to misjudge the public mood with regard to refunds for cancelled holidays earlier this week, calling on customers to have patience with travel agents.

Mark Tanzer, chief executive of ABTA, encouraged passengers to take credit notes as a short-term measure to prevent agents from going bust.

Today he doubled down on the request, arguing the topic has attracted an “increasing focus” this week.

He said: “Our pleas to government to step in and provide more guidance and support have been echoed by consumer groups and this growing clarion call adds to the pressure for them to respond to clarify the situation for all concerned, particularly around financial protection arrangements.

“The situation is very challenging, but we must also do all we can to preserve customer confidence.

“It is vitally important that if you [agents] do offer your customers a refund credit note because you are unable to process an immediate cash refund for a cancelled package holiday within 14 days, you follow guidance for these refund credit notes.

“Customers whose package holidays have been cancelled because of the pandemic have a right to a refund, and where cash refunds are requested, they should be given as soon as possible. “

In response to the ABTA position, Simon Cooper, founder of On the Beach, said the issuing of vouchers is “a travesty” as consumers face being ripped off when they re-book once the coronavirus pandemic is over.

Tour operators issuing vouchers will be in “no better cash position” in the coming months, he added.

“The temptation then surely has to be that, as an operator, you are simply going to manipulate the price of your holidays.

“The only way that you can avoid bankruptcy is to massively increase the prices you charge to recoup the losses.

“The audience you are dealing with is a captive audience.”

Consumer watchdog Which? also warned travel agents may be breaking the law when issuing credit notes.

“It’s positive that one of the UK’s largest holiday companies is defending consumers’ right to cash refunds for cancelled holidays – the law is clear, and customers should not be fobbed off with vouchers which may prove useless if a company fails,” said Rory Boland, editor of Which? Travel.

“Airlines and holiday companies cannot continue to withhold customers’ money from them to tide them over through this uncertainty, especially when so many will be in difficult financial situations of their own.

“The government must urgently step in to support travel firms and airlines to ensure they can meet their legal obligations to refund customers, and avoid causing permanent damage to confidence in the travel industry.”