Accommodation-only supplier HotelConnect has ceased trading with around 6,000 forward bookings through trade partners and 400 through its consumer facing website.
An Abta spokesman has confirmed to Travolution that provisional liquidators have been approached after the company was declared insolvent.
Abta said the trade terms and conditions on the HotelConnect travel agent website set out clearly that it was acting as a supplier and that all bookings should be honoured.
Rival bed banks have told Travolution they are already receiving calls from consumers and agents to re-protect bookings. Abta advised agents to contact the hoteliers they have clients booked with to make sure the booking will be honoured.
A spokesman said: “The hotels are still in business so the companies who the consumers dealt with clearly will need to ensure that that booking will still go ahead which might mean they have to pay again.
“There should not be any confusion, the agent website sets out the terms and conditions very clearly. This is a straight forward form of supplier failure.”
HotelConnect did bond with Abta for its consumer direct business, although the association expects customers to claim via their credit cards in circumstances where they can before coming to it.
HotelConnect had traditionally specialised in city hotels until recently when it started to increase its beach product. Rumours that it was about to be sold have been rife in recent weeks but it appears no deal was able to be completed that would have saved it.
Latest accounts filed at Companies House showed the firm made a loss of £669,000 to the year end January 31, 2010, on a turnover of£19.8 million, down £1.3 million on 2009.
The director’s report said the downturn was due to “considerable delay” implementing a new IT system that would increase the supply of hotels, rate types and special offers.
Director Chris Fraser has written to hoteliers to express his regret at the failure and request they charge clients a similar rate to that they were charged by HotelConnect.