The tour operator said all customers will be flown home and excursions had been cancelled.
Holidaymakers will be offered a pro-rota refund for the number of holiday days missed.
Other TUI customers due to travel before May 12 will be allowed to cancel with a full refund or switch to another destination and all sales for Sri Lanka have been suspended, it said.
Kuoni, one of the biggest tour operators to Sri Lanka with 80 clients currently on holiday there, said it was contacting them to discuss options to return to the UK after the Foreign and Commonwealth Office updated its travel advice to warn against all but essential travel to the country. It has also cancelled departures to Sri Lanka up to May 21.
The FCO said further indiscriminate attacks in Sri Lanka were ‘very likely’, including in places visited by foreigners.
Around 8,000 British tourists are understood to be currently in Sri Lanka. The FCO said they should ‘remain vigilant, keep up to date with developments and follow the advice of local security authorities and hotel security staff; keep a low profile, avoid crowded public places, large gatherings (including religious gatherings and places of worship) and any demonstrations’.
Travellers should also avoid travelling during periods of curfew (other than to or from the airport) and keep in touch with family and friends and make them aware of any plans they may have, it said.
ABTA estimates there are only ‘a few hundred’ on package holidays and it said they should be able to carry on with their holidays, as long as they follow Foreign Office advice. In a statement, it added: “Customers who are due to travel imminently to the island on package holidays will be offered options of deferring their date of travel, transferring to another destination or a full refund.
“Customers who have booked independently will need to discuss their options with their airline and accommodation provider.”
The Association of British Insurers said customers who do want to return home early should be covered by their travel insurance if they weren’t repatriated by their tour operator. A spokesman said: “Travel insurance is designed to cover unforeseen events like this. Cancellation cover under your travel insurance should cover additional costs that cannot be refunded by your travel provider.”
“If you are currently in Sri Lanka and want to curtail your visit and return early, your travel insurance should cover any extra costs associated with rearranging return flights. Check if you have the necessary cover in place or speak to your travel insurer.”
Foreign Secretary Jeremy Hunt said he hoped to be able to be able to change the advice once the current security operation had concluded.
“My first priority will always be the security of British citizens living and travelling abroad. We all hope the situation will return to normal very soon, and that the Sri Lankan tourism industry is able to get back on its feet following the terrorist attacks.
“We will do all we can to help the Sri Lankan authorities in the meantime,” he added.
Earlier this week prior to the change in the FCO travel advice, several independent tour operators, including Experience Travel Group, pledged to support Sri Lanka and help it to recover from the bombings.
