On the Beach has been criticised for raising the cost of bargain holidays after customers have booked.
The web-based business demands extra because it says fares have shot up, sometimes by hundreds of pounds, the Mirror reported.
Customers are contacted later and told they must pay above the price advertised or cancel their break.
The online travel agent blamed data from “flight and hotel suppliers becoming out of date very quickly”. It said it happened on “rare occasions” and customers could cancel.
But Frank Brehany of HolidayTravelWatch said: “We regularly receive complaints to our helpline from holidaymakers who book with online travel sites and then receive demands of extra payment because air fares have gone up.
“This can be a costly misunderstanding. We’ve heard from some consumers that they have been given a choice of either paying the extra cost or losing their money if they cancel. This cannot be right.
“Quite simply, if you make a bargain with a retailer, you agree to buy a product for a price. If the retailer then says, you can have this product but you have to pay a new price, then that retailer is changing the deal and creating a new contract.”
On the Beach said only a “small proportion” of bookings cannot be confirmed at the advertised price. If this happens, customers are given the option to cancel their booking without paying anything.
A spokesman told the newspaper: “On the Beach is an online travel agent and as such does not sell package holidays. It gives holidaymakers the opportunity to build their own holidays by giving customers access to a wide range of cheap flights and hotels.
“As a customer sends through their booking request via the On the Beach website, the system will automatically try to book the holiday elements – be that flight and hotel, flight only or hotel only – with our third party suppliers at the price given on the website.
“As the On the Beach website takes data from all the major flight and hotel suppliers, on occasions this data can become out of date very quickly.
“On these rare occasions, On the Beach will contact the customer to offer the flights and or hotels at the new cost. If the customer is not happy with the new cost, the booking is cancelled with no charge to the customer.”