On the Beach has resigned its membership of ABTA following a disagreement over refunds.
The trade association recently reaffirmed its position that, if the Foreign, Commonwealth & Development Office advises against “all but essential” travel to a destination, trips should be cancelled, and refunds offered.
However, On the Beach has rejected the position.
The online travel agent declined to refund customers for the flight element of package bookings to Spain unless airlines had cancelled flights and made a refund.
A spokesperson for On the Beach said: “The travel industry is facing unprecedented challenges, and changes are inevitable as businesses and trade organisations adapt.
“On the Beach has been an ABTA member since 2004, however the current circumstances have presented difficult decisions and different legal interpretations on complex matters.”
The company added On the Beach and subsidiary Sunshine.co.uk continue to be financially protected by the ATOL scheme.
In response, an ABTA spokesperson said: “We are sorry that On the Beach has resigned as a member of ABTA following ongoing discussions about refunds due to customers when the Foreign Office advice changes to advise against all, or all but essential travel to a destination.
“We recognise that the widespread imposition of advisories against travel places many ABTA members under enormous pressure regarding refunds.
“But ABTA has consistently maintained that the underlying obligation to refund remains, as has been the longstanding practice of the travel industry, and this has not changed as a result of Covid-19.
“ABTA believes this is important to ensure consumer confidence in the package holiday market.”
Rory Boland, editor of Which? Travel, argued the move would further damage a struggling industry.
He said: “Travel operators are facing a serious financial crisis, but they are also facing a crisis of trust – and On the Beach’s actions will only further diminish confidence that it’s possible to book a holiday without the risk of losing your money.
“Anyone who has their hotel cancelled as part of a package holiday is due a refund for the full cost of the holiday under the Package Travel Regulations, but holidaymakers who decide not to travel because of government advice might struggle to get their money back.
“We would currently advise anyone against booking a holiday with any travel operator refusing to allow customers refunds in these circumstances and encourage people struggling to get a refund not to take no for an answer.
“If enough customers join us in telling On the Beach that its approach is unacceptable, the company may be forced to reconsider and pay up to those who are owed money.”
He added: “This situation has partly been brought about by airlines continuing to refuse refunds regardless of Foreign & Commonwealth Office advice.
“Which? has called on the government to offer support to holiday operators or airlines struggling due to the coronavirus pandemic – but this support should only be available to companies that are prepared to do the right thing and pay refunds to customers who cannot travel due to government advice.”