Many elderly people become reluctant to bathe, and there are various reasons for this. It may be balance problems, causing a fear of falling; discomfort with temperature changes, the cool
or heat of a bath/shower water; modesty (especially if they need help bathing); or body pain associated with standing, bending, or sitting. People with Alzheimer's or dementia can fear water, and be irritated by its sound.
I would try talking to your dad to see if you can get a little more information about why he doesn't want to bathe. Ask him specifically if he feels unstable, chilled, or in pain. There are bathing techniques for people with all of these issues, but the topic is sensitive as it indicates a significant loss of independence. This article on bathing your dad elaborates, with helpful suggestions.
I would also talk to your dad's doctor about his reluctance to bathing. A check-up may be a good idea. His doctor can help rule in, or out, medical explanations. Meanwhile, there's nothing really wrong with your dad bathing by hand-washing, as long as he's cleaning all of his body folds, and private areas. This is where bacteria lingers which can cause odors. But a full bath once a week (or so) is a good idea, so you're doing the right thing by getting more information.
I get quite a few questions on bathing and the answers may help you. Here's one from a woman having a similar problem with her mother. Here's more advice on dealing with bathing resistance, and here's one on why bathing regularly is necessary. I hope they help.