On the Beach quits ABTA, what will loveholidays do?

ABTA has said it is sorry to see On the Beach leave the Association but it is sticking by its refund rules to maintain consumer confidence in package holidays.

On the Beach resigned its ABTA membership this week, taking its Sunshine.co.uk brand with it.

ABTA had earlier launched an investigation into On the Beach and rival online travel agent loveholidays after both OTAs said they wouldn’t refund the flight element of package holiday bookings to Spain unless airlines agreed to refund them, even though the Foreign Office (FCDO) is advising against all non-essential travel.

ABTA insists that its members should give customers the option to cancel packages with a full refund if the FCDO says it’s not safe to visit a country, for any reason.

Commenting on its decision to leave ABTA, On the Beach said ‘different legal interpretations of complex matters’ forced its hand.

ABTA said: "We are sorry that On the Beach has resigned as a member of ABTA 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."

On the Beach says it will refund accommodation and transfer costs to customers who choose to cancel based on FCDO advice, but it will only refund the flight element if the airline cancels and refunds On the Beach.

In a statement explaining its decision to leave ABTA, On the Beach insisted its package holidays were still protected, through ATOL and its ‘ring-fenced trust account’.

It 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."

Former ABTA Chairman Noel Josephides said he understood On the Beach’s position, but insisted members must stick to ABTA’s code of conduct.

The Sunvil Chairman told TravelMole: "I have sympathy with On the Beach, as Sunvil – and many others – are in the same position. But we are part of ABTA and we have to abide by the rules.

"ABTA’s Articles of Association say you can’t bring the organisation into disrepute. I’m sympathetic, but I also see ABTA’s point of view."

An ABTA spokesman said loveholidays remains a member of the Association but refused to say whether it had been given a deadline to comply with ABTA’s refund policy or leave.

TravelMole has contacted loveholidays for a comment.