TUI Group has told agents that Meon Villas will close at the end of October.
The travel giant emailed the trade to explain its decision.
In the email, Susan Allan, head of trade sales at TUI’s Specialist Holiday Group, said: "The market for villa holidays has changed over the years. We have as a result reviewed our business model and taken the decision to no longer operate the Meon Villas programme post October 2015.
"The outcome has not been taken lightly and we would like to thank you for your support and commitment over the years."
In a statement, TUI added: "We have seen growth in recent years in the Hotel Villas we feature within the Sovereign programme and have decided that for the future this is where we wish to focus our efforts."
Agents expressed their sadness at the operator’s demise.
Jenny Jackson at Travel-PA posted on Travel Gossip: "Another wonderful independent company bought out by one of the big 2 and destroyed ..very sad."
Pamela Hannah at Moorelands Travel in Kinross said: "Not good, I loved Meon."
And Jo Abbott added: "I don’t think any villa company will survive with airbnb around….sadly."
Meon Villas stopped selling through agents in 2004 to focus on direct sales and to differentiate itself from sister operator Sovereign Villas.
But it resumed sales through the trade three years later.
