The UK’s leading online travel agent (OTA) On the Beach has resigned from Abta over the association’s policy on refunding customers when the Foreign Office advises against travel to a destination.

The Abta board affirmed the association’s longstanding policy that Foreign Office (FCDO) advice against all but essential travel requires members to cancel bookings and offer customers full refunds last month.

It did so after On the Beach and two other OTAs declined to refund customers the flight element of package bookings to Spain unless the airline had cancelled the flight 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.

“As of late last week, On the Beach and Sunshine.co.uk have informed Abta that they will resign their memberships.”

“On the Beach and Sunshine.co.uk package holidays continue to be financially protected by the Atol scheme and our ring-fenced trust account.”

A spokesperson for Abta said: “We’re sorry On the Beach has resigned as a member 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.”

In a statement to customers in August, On the Beach chief executive Simon Cooper said: “Abta is an industry body of which membership for travel businesses is not mandatory.

“It is not a regulator or a lawmaker. Industry practice, mainly driven by Abta’s historic guidance, has been to treat the FCO [advice] as a trigger for full cancellation and refund rights for customers.

“Industry practice is not law. It is something which can and should change and evolve over time and should certainly change in response to this highly unusual situation.”

MoreOn the Beach and Loveholidays ignoring Abta’s refund policy

Abta to write to members over FCO advice refunds dispute

On the Beach chief defends stance on Spain cancellations