Refund for hotel booking

Antman101

Hi MSE, 
I have a hotel booked as part of a wider group (2 seperate bookings) for a trip to Ibiza on June 11th for 3 nights. I have been contacted by the hotel stating that the travel advice for Spain is that they are not accepting visitors until at least 15th June which means our booking is now cancelled. They instructed me to apply to the agent, Onthebeach.com to arrange a refund and that they had instructed onthebeach on how to proceed with this.

I have contacted onthebeach who have stated that my booking is non refundable and that they will not refund the booking based on this. They mentioned the fact its not ATOL protected as its not a package booking. They have directed me to my travel insurance to recoup the money. I cannot get my head around how this can be right? I have not cancelled the booking, the Spanish authorities have and therefore surely I am not in breach of of the contract.
To add insult, onthebeach have contacted my friend (the other half of the booking) and offered him a full refund minus £10 pp admin fee!
Why haven't I been offered this when the bookings were made under the same conditions on the same date???
I have sent an email to their complaints department and await a reply.
I paid for the hotel on my credit card so can I dispute this transaction and claim the money back? 
It's £576 which I could do with getting back.... Please help! 

Life__Goes__On

Raise a "Chargeback" against the transaction stating non-supply of service, (using proof of cancellation) also state that you have rejected any vouchers that you are entitled to do under English law (even if you not been offered any).
Normally with a Chargeback the money is returned once it’s processed

OTB can dispute the Chargeback, but it must supply evidence to the card company.

If OTB is successful, then the Chargeback is reversed and the money taken back  from your account

If that fails then it's a Section 75 on the credit card.