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The Travel Agent Trust Account – your flexible friend

The dawn of the internet age has brought with it an almost limitless flexibility in the way that travel agents can structure the sale of travel arrangements so as to suit each pocket, whim and preference: changes to contract terms and holiday descriptions can be made at the touch of a button on line – no need to wait for the next brochure print run in this day and age!

Although the legislation governing the industry hasn’t really kept pace, the basic requirement for consumers to have forward payments for traditional ‘package holidays’ financially protected has remained a central tenet of the UK’s governance of the holiday trade; and the range of products available on the market to provide that financial protection has adapted to mirror the variety of travel companies and sales structures in the market.

Different types of the more traditional travel bonds or financial failure insurance policies have evolved over the last ten years, but it is really only the travel agent trust account that has the ability to morph seamlessly to cover a range of different types of sale using just one trust account. Let’s look at some examples of flexible travel agent trust account that we have set up:-

  • Business A wanted to appease its merchant services supplier by having all its turnover protected in a travel agent trust account but the applicable legislation didn’t require all turnover to be protected as the business already had a small business ATOL in place in respect of its licensable turnover. We drafted a tailor made trust deed and devised a specific reporting and payment structure to keep both the CAA and the merchant services supplier happy by protecting only the turnover that was required to be protected by law. We also have a happy client!
  • Business B sells package travel arrangements business to business; but some of those businesses facilitate contracts between their consumer customers and business B (confused? – so were we!). In plain English some of their sales required financial protection and some didn’t and traditional bonds and insurance options weren’t open to them because of the unpredictable nature of the sale. A travel company trust account was the answer they needed: we were able to suggest contractual arrangements with business customers, and a linked reporting mechanism on their booking system, to build the flexibility they needed into their travel company trust account.

These are just two examples of where Serenity have been able to use our experience in travel agent trust accounts coupled with travel and trust deed specialist legal knowledge to apply a solution to a problem that might not otherwise have been solved.