On the Beach has taken the dramatic step of taking all holidays this summer off sale.
The company, one of the largest tour operators in the UK, blamed “continuing uncertainty” around international leisure travel.
Simon Cooper, who leads the business, said he needed to know more about how the traffic light requirements will impact customers.
All destinations are currently ranked as ‘green,’ ‘amber,’ or ‘red’ by the government in England, with travel discouraged to the latter two.
Only a small handful of countries, including Israel and Portugal, are currently considered safe for travel.
Cooper said: “There’s nothing we want more than to be able to send customers on holiday, but with the current number of unknowns we don’t think that now is the right time for customers to book new holidays departing in the next few months.”
He added: “We don’t know enough yet about how the traffic light system will work in practice, and it doesn’t currently give any certainty or clarity beyond a three-week window.
“In the coming weeks and months - until vaccination programmes across Europe and beyond are further along in their rollout - it is very likely that we will see regular fluctuations in destinations’ traffic light classifications, and so there is likelihood of disruption or even cancellations for the many customers who want to book more than three weeks in advance.”
No trips before September are currently being sold by On the Beach.
Recent YouGov research found that less than a third of English people would feel comfortable about travelling internationally once travel restrictions are lifted.
Some 85 per cent of consumers said that they would not want to travel to an amber destination under current guidelines.
Just 33 per cent said that they thought travel to a ‘green’ country would be worth it if it meant taking Covid-19 tests before departure and after arrival.
“Given this, there is too much uncertainty for us to take new bookings with confidence that they will go ahead, or for us to know the potential inconvenience or incremental costs that customers might experience or incur,” said Cooper.
“As a result, we have taken the decision to stop selling holidays for this summer until customers have greater clarity and can make more informed booking decisions.”
In contrast, rivals easyJet and TUI Group have previously said they will continue to sell holidays to amber destinations, largely in the belief they are likely to be added to the safe list in the near future.
Cooper added: “Unlike many of our competitors, we have no interest in selling holidays that are unlikely to happen, as our business model enables us to put customers first, rather than needing to get cash in the door to contribute to high fixed costs, and offering refunds in the form of a voucher when holidays get cancelled.
“This is a temporary measure that we will review in line with the next government announcement.
“In the meantime, we will focus our efforts on helping and advising our customers who already have bookings of their options to either still go on their holiday, amend their holiday or, where the holiday is cancelled, refunding them in cash within 14 days.”