On the Beach’s tour operator subsidiary Classic Collection and trade platform Classic Package Holidays will remain Abta members, the company has confirmed.

The online travel agent and its subsidiary OTA Sunshine.co.uk resigned from the association on Monday over Abta’s policy on refunding customers when the Foreign Office advises against travel to a destination

It has now confirmed Classic Collection and Classic Package Holidays will continue to comply with the association’s refunds policy.

An On the Beach spokesperson confirmed: “Classic Collection Holidays and Classic Package Holidays will remain Abta members and are committed to supporting our agent partners.”

Abta affirmed its longstanding policy that Foreign Office (FCDO) advice against all but essential travel requires members to cancel bookings and offer full refunds last month after On the Beach, Love Holidays and a third small OTA declined to refund customers the flight element of package bookings to Spain unless the airline cancelled the flight and made a refund.

On the Beach confirmed its policy when the FCDO advises against travel, saying: “Customers can choose to cancel their holiday. We will fully refund hotel and transfer costs. If the flight operates, airlines retain the monies for the flight which leaves us unable to pass a refund on. If the airline cancels the flight, we will pass the refund on in full.”

The spokesperson added: “For non-flight packages, we’ve replaced Abta protection with an insurance policy arranged by International Passenger Protection (IPP).”

Abta had said it recognises the “enormous pressure” the widespread advisories against travel have placed its members under, but a spokesperson said: “Abta believes this is important to ensure consumer confidence in the package holiday market.”

No one from Love Holidays was available for comment but the OTA remained an Abta member as of Tuesday evening.

Which? Travel editor Rory Boland said: “Travel operators are facing a serious financial crisis but they are also facing a crisis of trust – and On the Beach’s actions will only further diminish confidence that it’s possible to book a holiday without the risk of losing your money.

“Anyone who has their hotel cancelled as part of a package holiday is due a refund for the full cost of the holiday under the Package Travel Regulations, but holidaymakers who decide not to travel because of government advice might struggle to get their money back.

“We would currently advise anyone against booking a holiday with any travel operator refusing to allow customers refunds in these circumstances and encourage people struggling to get a refund not to take no for an answer. If enough customers join us in telling On the Beach that its approach is unacceptable, the company may be forced to reconsider and pay up to those who are owed money.

“This situation has partly been brought about by airlines continuing to refuse refunds regardless of FCO advice.

“Which? has called on the government to offer support to holiday operators or airlines struggling due to the coronavirus pandemic – but this support should only be available to companies that are prepared to do the right thing and pay refunds to customers who can not travel due to government advice.”