Sarah Todd, director at Sheffield Travel Centre Ltd, reacted after reports suggested an amber plus category would be added to the system of where people can travel to.
It would identify countries likely to move onto England's red travel list, with Spain, Greece and Italy being mentioned as possibilities.
Such a step could trigger an exodus of about a million British tourists already abroad, cause further damage to the travel industry and deal a new blow to southern Europe's summer tourist season.
Mrs Todd said: “The traffic light system is a shambles.
"It is doing nothing but confusing people and knocking their confidence. They don’t understand it because it changes so often.
"We should have kept the clarity of the original system, but to release an amber plus category means people are confused again. Confidence had been growing but that’s gone now.”
Customers calling the city centre firm based in West Street are moving holiday dates to later in the year in the hope of escaping the need to quarantine, either at home on their return from holiday or in a foreign country.
“People are scared that if they are put on amber plus they will have to quarantine when they come home. They aren’t cancelling, but they are moving holidays further down the line,” said Mrs Todd.
She added France and Italy were worst affected, due to tight visitor restrictions. “It means you have to quarantine when you get there, which is confusing because people think it is okay to travel.
"It is not a reciprocal situation, it is a shambles. We’ve been waiting for the green light to travel which would have been fabulous but what we’ve got is a mockery.”
Double jabbed travellers from the EU and US can now arrive in the UK without quarantine, facilitating emotional reunions between families and friends after long periods of separation due to the pandemic.
Mrs Todd said: “That is good for UK tourism market, but I’m in a position as an international operator so it doesn’t help me.”
The firm was established in 1984 and is one of the cities leading independent travel agencies.
She added testing was also an issue for customers. “Testing is a huge hurdle, even if you’re double jabbed you still have to have a test to return home and that’s worrying people. It’s not the cost, which is 30-60 Euros, but the fear is if you get a positive test, you are stuck there for 10 days.”