The Biggest Myth About Travel Trust Accounts

As travel trust accounts have become more widely used and understood, there have been many arguments about how effective they are. While properly run trust accounts are more secure financially, there are many complaints that are based on myths and misunderstandings.

We get it, on the basic level of understanding, trust accounts simply seem far too good to be true. There has to be some disadvantage, right? Well, that is partially determined by the travel trust account that you are using or considering using.

Some trust accounts are run much more like business accounts, and it is important to keep in mind that these are not properly run trust accounts. If the trust account is not run effectively, then it absolutely will be too good to be true, because it will most likely use the financial protection that trust accounts usually offer as more of a marketing tactic, while giving too much access to the account.

Properly run trust accounts are where the biggest myth can seem true.

Your Profits Are Locked Up in Trust Accounts: Myth!

The basic way that most trust accounts are described is like this: instead of paying you directly, your traveller will pay money into the trust account and you won’t have access to a single penny until that traveller has returned from their holiday. This is to protect the consumer (and shows no regard for protecting the business).

While this does hit the main points, a trust account should protect the business and the consumer equally. If you are running a business where your customers book years in advance, this version of a trust account is completely ridiculous and unsustainable.

Fortunately, this is not really how good trust accounts are run. For example, here at PTS, our travel trust account does take payment directly from the consumer and separate that money so that, if necessary, the consumer can get a refund efficiently and without it coming out of the business’ pocket. That is truly how a trust account works.

However, that money is not completely inaccessible to the business until the consumer returns from their holiday. That would be unsustainable. While the trustees are there to prevent the business from having direct access to funds, there are many reasons for a business to request funds are released and, at least at PTS, the trustees are incredibly efficient and can respond to these requests immediately.

A perfect example of this, is when suppliers need to be paid. Of course, the suppliers need payment long before the customer goes on holiday, so a member of PTS can easily request that these monies are released to the supplier and when that happens, those funds are then insured as an extra protection measure to ensure any bumps do not affect the customer or the member business.

Part of this myth that we are always combating here at PTS, is also the idea that your profits are inaccessible to you for an unreasonably long time. This will vary based on the trust account you are using, but if a member is going through the PTS trust accounts, this is not something to be concerned about. With the PTS trust, a member can claim their profits from a booking as soon as the supplier has been paid. This means no waiting around for needed funds, no waiting for the customer to travel, no stress, as soon as all other parties are paid, your profits are yours.

There are still a lot of things that a lot of people don’t understand about travel trust accounts. If you think they may be the right financial protection method for your business, but you’re uncertain about some details, don’t stress, reach out to our team at PTS and we can help you find out if a trust account is the right fit for you.

So, if you would like to learn more about travel trust accounts with PTS, please get in contact with one of PTS’ lovely staff members by calling 0207 190 9988. Or, you can visit our member support and travel trust account pages to learn more about how we protect you.