Loveholidays has resigned its membership of Abta, following fellow online travel agency On the Beach.
Both companies had taken a different stance to Abta on refunds for package holidays to countries where the Foreign Office advises against all but essential travel but flights are still operating.
The OTAs declined to refund customers the flight element of package bookings to Spain unless the airline had cancelled the flight and made a refund.
That opposed Abta’s stance. The association’s 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.
On the Beach resigned its membership of Abta on Monday.
A loveholidays spokesperson said: “The Covid-19 pandemic has caused unprecedented challenges for holidaymakers, which have been exacerbated by frequent changes in travel guidance issued by the UK government.
“The current package travel legislation was never designed to deal with disruption on the scale we have seen since March 2020. Unfortunately, as a result of our divergent views on the legal position regarding cancellations and refunds, we have decided that it is no longer possible for loveholidays to remain a member of Abta.
“We would like to reassure all our customers that package holidays booked with loveholidays remain financially protected by the ’gold standard’ Atol scheme.
“We believe the priority for everyone in the travel industry should be to come up with a workable, fair solution to help holidaymakers get their money back as quickly as possible. Speeding up the refund process for airlines must be a key part of this solution, and we urge the entire industry to focus on working together to make this possible.”
An Abta spokesperson said: “Loveholidays has chosen to resign from Abta membership 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.
“Abta is firm in its position that the longstanding practice of offering a full refund when the Foreign Office advises against travel still stands.”
Loveholidays is the second largest purely-online travel agent in the UK – with an Atol licence to carry more than one million passengers. On the Beach is the largesst OTA, with a licence for more than 1.2 million passengers.
They are the third and fourth largest Atol holders, after Tui and Jet2holidays.