While it caused a lot of havoc within the industry, the Covid pandemic shone a light on the state of financial protection in travel and highlighted the benefits of the trust solution to travel businesses, stakeholders and consumers. Though they still aren’t widely understood, travel trust accounts are a serious consideration for many businesses.

Following the fall of the Thomas Cook Group in 2019, the insurance industry suffered huge financial losses, exposing the risks, expenses, and lack of protection. This was further compounded during the Covid-19 pandemic, which made insurance nearly impossible to renew.

It was in 2020 that the pandemic helped reveal the true number of gaps in travel’s financial protection. While many travel companies couldn’t process refunds or went bust entirely, those protected under a trust account were proving to be more financially robust. Some travel companies that had adopted the trust account solution still suffered losses during the pandemic, but travel companies that operated under trust were in a far stronger position to navigate its challenges.

Despite this optimistic turnout, the term ‘trust account’ is still misused and misunderstood. Though consumers and businesses are more aware of trust accounts, questions are still being asked, and we are here to answer them.

What is a Travel Trust Account?

In short, what you’re looking at is an outside trustee separating, storing, and protecting your client and stakeholder monies. Since the updated Package Travel Regulations 2018, a trust account must be completely independent to the travel business. Gone are the days where you could internally separate client monies in a client account.

Well managed trust accounts should commit to daily reconciliation. You should be able to track your business monies in real time – similarly to online banking. Protected Trust Services reconciles daily, and this is a key factor. Ensuring complete financial track and trace to all travel business members, consumers, suppliers, and stakeholders, allows for peace of mind and added security. The ability to track your company’s money with a daily reconciliation is something you should definitely confirm before committing to a trust account provider.

How Does a Travel Trust Account Work?

There are a range of ways that the money in a trust account is held, with a variety of structures. All of these fall under the term ‘travel trust account’ but not all are as thoroughly protected as others. In some cases, it is an independent bank account that is inaccessible to the trust account holder, in order to keep monies protected and separate to those involved in the trust account solution. This method is how Protected Trust Services (PTS) operates, with our independent trustees, Elman Wall. In other cases, it is with a trust account that is little more than a client account. At PTS, we do not believe that true protection is being provided if the trust monies are this easily accessible to the trust account holder.

As to the exact workings of each trust account, there are many elements of the process to consider, including what money goes into the trust, how differently you treat money in the trust account, etc. These questions are often determined by other external factors, such as who has control over the bank account, how much of the customer funds go into the account and whether the monies make a stop before they reach the trust account. A quick breakdown of the PTS trust account can be found in the diagram below

How The PTS Travel Trust Account Works

At PTS, our travel trust accounts provide a number of additional elements which are not common to all trust accounts. However, these provide greatly improved security, and we strongly believe that implementing them is crucial to ensuring a successful and thoroughly protected travel trust account system. These include:

  • Independent Trustees – Without having independent trustees to keep the money safe, there cannot be guaranteed financial security. If the money is in the account holder’s care, then it remains well within reach of those involved in the travel business. You can achieve a far greater level of protection, whilst substantially reducing the risk of fraud and misuse of funds, by placing the account in the hands of an independent and external party. It is our strongly held belief that in order to truly protect the monies in trust, the monies should not be controlled by any member of staff or director of the trust. The final payments should only ever be administered by an independent trustee separate to the trust business.
  • Pinpointed Track-and-Trace – At PTS, we use a track-and-trace system to keep track of your monies down to each individual booking. In a travel trust account system, this is crucial to be able to give everyone involved the confidence that their money is being watched over and protected.

In some cases, ATOL and Package Travel Regulations protected monies are treated differently regarding the level of protection they are afforded. However, at PTS we don’t believe in separate levels of protection for flight-inclusive holidays, so everyone receives the highest level of protection, regardless. Fundamentally, whether you are booking holidays with or without flights, you must still protect your monies as a travel business. This is imperative to ensure financial stability and peace of mind for the business owner.

What are the Rules and Legislation Around Travel Trust Accounts?

Travel trust accounts are a recognised form of financial travel protection under the Package Travel Regulations 2018 alongside insurance. However, how the regulations apply and dictate the operation of financial protection differs from bond, to insurance, to trust. At PTS, we use supplier failure insurance (SFI) for any early payments that have to leave the trust account, thus some further regulations involving the use of both trust and insurance would apply.

Under the 2018 Package Travel Regulations, it is required that all traveller monies (or less if insurance regulations apply) are held in the United Kingdom or a member state, via a trustee. These are to be held by the trustee until either: –

  1. The package has been fully performed.
  2. Monies have been paid to a supplier whilst fully supported with SFI and SAFI.
  3. Any monies have been returned to the traveller, or forfeited in the case of a cancellation by the traveller.

It is also specified in the Package Travel Regulations that the trust account holder must be separate to the organiser of the package. The organiser is the travel agent or tour operator that has created and/or sold the package to the traveller. However, the costs of the trust must be paid for by the organiser, not the independent trust account holder (which in this case, would be PTS).

Trust account systems are also of benefit to the consumer. Since, under the Package Travel Regulations 2018, if the organiser should go bust, all the monies paid into trust on behalf of the traveller must go towards the fulfilment of their package holiday, with any extra money going towards insolvency laws. This means that the consumer could still carry out their holiday without a hitch and may not even be aware that the organiser of their holiday has gone out of business.

There is relevant insurance that must be taken into consideration when working under a travel trust account. In accordance with the Package Travel Regulations, if an organiser is providing passenger transportation, they must invest in relevant insurance. PTS supports all members to ensure the required insurances are in place. This ensures that if the organiser should go bust, the insurer will repatriate the traveller, or provide any other transportation as necessary.

Can You Create Your Own Travel Trust Account Within Your Travel Business?

Running a trust account within the confines of your business does not constitute an independent trust account. If you are creating a ‘trust account’ through your business, for your business, then this effectively becomes a client account. This is a clear distinction that should be observed when you are looking into adopting the trust account solution. Because you are not separating the person profiting (you) from those paying (consumer) with a middleman (PTS), you are not guaranteeing protection to the consumer. Nor are you instilling trust, as fraudulent activity becomes possible. When the directors of the company have such access to all the money, it becomes a much more fragile system.

Instead, by working with a trust account holder like PTS, you are clearly demonstrating that you have no intention to lay hands on that money until the consumer has been fully provided for and protected during their holiday.

How are the Trust Rules Documented?

To ensure complete protection in a trust account solution, having a formal Trust Deed is vital to completing the process. This is the legal document that will ensure a firm structure of proceedings and will, with careful drafting, guarantee that the beneficiary and their funds are completely protected in all stages of the process. As with many contractual legal documents, the terms of a Trust Deed can be complex and long, ensuring that everything is covered without any loopholes or details missed. However, at a minimum, you should expect a Trust Deed to set out:

  • What money gets paid into trust
  • When that money gets paid into trust
  • What money can be released, including cancellations, refunds and other payments
  • Who the beneficiaries are
  • What will set off the release of trust funds to these beneficiaries

In short, this is the document that will state exactly how this trust system will be operated and how everyone is going to be protected in the face of any situation.

Who are the Stakeholders, Beneficiaries, and Trustees?

Who are the Stakeholders?

Put simply, a stakeholder is anyone who has an interest in the company. They are either affected by or affect the business, and are generally an investor, customer, employee, supplier, government, or trade association. In this case, the stakeholders are your holiday goers, service suppliers, travel agents, tour operators, insurance underwriters and merchant acquirers. The stakeholders are the parties that the trust account will protect. It is also worth noting that you will gain improved business insurance rates, as well as credit card and merchant fees, by joining a trust model. At PTS, all members enjoy financial savings with their stakeholders.

Who are the Beneficiaries?

In the case of a trust account, the ultimate beneficiary is an important role to establish. This is the person who ultimately receives the money that has been directed through the trust account. For example, if you are the travel company and a consumer books a holiday with you, they pay the money to finance the holiday and this goes into the trust account. Because this is a trust account service, that money is first and foremost going towards paying the supplier for the holiday services. Therefore, in this example, the ultimate beneficiary is the supplier. Establishing this is important in the event of failure in the business. In the case that your company goes bust, knowing who the ultimate beneficiary is allows the trust to still provide the necessary payments to that beneficiary, so the fall of the business doesn’t affect them as well.

Who are the Trustees?

The trustees are those responsible for the funds, who make sure the trust account is operated in the best interests of the beneficiaries (the consumers and suppliers). The trustees are the ones that make sure the money is not misused or misappropriated, ensuring that the money is only going towards the purchase of the consumer’s holiday and paying the suppliers what they are owed. The Package Travel Regulations do not state any specific qualifications to be a trustee for a travel trust account. However, it is required that they are independent of those involved in the trust account (in this case, they should be independent of the travel company and PTS). There are, however, much stricter requirements for a trustee where ATOL protection is concerned. The CAA provide a small range of approved trustees that have travel industry knowledge and experience, alongside an approved level of Professional Indemnity (PI) insurance. Asking who the trustees are is an incredibly important question for you and your travel business.

What is the Importance of Independent Trustees to Travel Trust Accounts?

At Protected Trust Services, we firmly believe in the assurance that trustees are independent and external to the trust account holders. This is why we appointed Elman Wall as our independent trustees, to guarantee protection and prevention of fraud. The use of independent trustees separates those involved in the trust solution and ensures all PTS members can have peace of mind that every length has been taken to ensure complete financial protection. This means that Protected Trust Services, as the account holder, do not have easy access to your money. PTS merely hold the account, providing all the information you need on your monies, as well as the technology to allow you to securely pay and organise your customers and supplier payments. Meanwhile, the independent trustee ensures that all money is secure and protected. Using an independent trustee adds an extra layer of protection that means no one involved in the business itself can simply use your money.

Why are Travel Trust Accounts the Best Option for Consumer Protection?

Though there are other methods of financial protection that are approved under the Package Travel Regulations, trust accounts are by far the most secure. With several layers of security between the consumer monies and the company, it provides complete trust between client and business.

Why are Trust Accounts a Better Option Than Insurance for Package Travel Regulation (PTR) Compliance?

As a tour operator looking for a protection solution that complies with the PTR, an insurance solution can seem like the way to go. However, in the long run it can often prove to be far less cost effective and much riskier than adopting the trust account solution. The issue with an insurance solution lies in whether the rates change. Especially during a time like the pandemic, higher risks in travel will cause the insurance providers to push up the premiums to compensate, which will cost you substantially more. Relying on these insurance solutions can also leave your business very vulnerable if the insurance provider goes into administration, or if they simply pull their insurance product from the market. We have seen this happen to a large number of tour operators and travel agents throughout the pandemic. In contrast, trust account solutions are flexible and much more cost effective, following the flow of the business rather than working against it. Though insurance can certainly work for some travel businesses, when you’re searching for lower cost security with fewer risks, trust accounts are the way to go.

Why are Trust Accounts a Better Option Than Bonding for Package Travel Regulations (PTR) Compliance?

As an alternative to a bonding solution, trust accounts have many advantages. Though many travel businesses use bonds to protect their money, it has begun to come to light how great of a disadvantage this method actually is – especially to consumers. The biggest disadvantage when compared to a trust account lies in the separation of monies. Whilst the PTS trust account separates all monies down to the individual bookings – each of which can be individually tracked, bonds are unable to do this. This can result in a consumer’s money being misallocated and could take a long time to be returned to them.

Additionally, bonds do not ensure a separation of consumer monies. Many travel companies who adopt a bond as protection, use client monies as working capital. This all may seem like a sure fire way to enhance quick growth and free up cashflow. However, you must always be in a solid position to refund client monies within fourteen days, if required. If client monies are spent as working capital, the financial foundations of the business are broken, leading to incredible financial instability – just as we are seeing with many travel businesses during the pandemic. In comparison, whilst trust accounts supply profits to the travel company at a later date, the travel company can rest assured that their current financial position is correct, and they can always administer refunds as required. Thus, in essence, the financial foundations of a travel business that adopts trust are significantly stronger. This is a big contributor to why no PTS member to date has gone bust. All PTS members adopt financial stability and run their business in the most financially stable manner. There is no confusion between profit and running costs – profit is simply profit.

What Happens if the Client Has an Issue?

If a consumer has an issue with their holiday, a PTS travel trust account makes this simple to solve. Issues can come up for a variety of reasons, but whether it’s a mistake, an emergency, or something unpredictable, making sure your client knows what to do – and then assisting them throughout – will help to instil confidence. This is why the transparency of a trust account system is so successful and important.

If the consumer does come across an issue, the first thing they should do is to contact the organiser of their holiday and the PTS member. It is very rare that they need to take it further than this. With a good travel business, they will be able to get to the root of the problem and solve it efficiently. Whether this is a refund or an amendment to the package, or even contacting a supplier, more times than not, the issue can be solved easily then. PTS work with expert travel business members, so it is exceedingly rare that a problem is not quickly and easily rectified. However, for peace of mind, working under a trust account also means that anything to do with funds can be dealt with fast and hassle-free.

In the event that the consumer’s PTS member cannot deal with the issue, they can get in contact with PTS head office to deal with the situation. Thanks to our very capable membership, this is something that has almost never happened, and we strongly advise that no consumer escalates an issue to PTS before talking to their travel agent or tour operator first.

What are the Benefits of the Travel Trust Account Solution?

Next to being easy-to-grasp and more mutually beneficial, there are a number of other benefits to keep in mind when you’re thinking of adopting a travel trust account solution.


A big portion of the benefits are centred around management. Managing client funds, supplier payments and cash flow are all far easier through a trust account, giving you more control over your finances and management, without losing protection. PTS gives you complete control of your travel business. Through PTS specifically, this means that you can login at any point and the PTS software will allow you to swiftly allocate your money to any specific transaction and client. This gives you more power over your business and providess the consumers and stakeholders with confidence in the financial protection of your services.


Of the methods of financial protection recognised by the Package Travel Regulations, travel trust accounts are comfortably one of the most affordable for any travel business. Unlike bonds or insurance, trust accounts provide solid protection for both your business and the consumer, whilst remaining highly affordable for all involved. If you’re starting up as a travel business, trust accounts are even more accessible if you’re thinking of joining a travel support solution like PTS . Your finances are protected, you are Package Travel Regulations compliant, and you can save costs to reinvest in making your travel business as great as possible!

Access to Currencies

One feature which may not immediately spring to mind, but which is a huge benefit of travel trust accounts, is the ability to work more efficiently in other currencies. If you would like to learn more about working in other currencies, we have a superb article on currency hedging in travel. In short, working under a trust account allows you to hold money in trusts in as many different currencies as your business needs, and to then deal in each respective currency as and when required. This gives much more freedom and security if you are a tour operator or supplier. At PTS, we understand that you may need to sell services local to another country using a foreign currency. As such, we work with our members and introduce you to our currency providers. Currency exchange can be unpredictable and is subject to change, but with effective planning, foreign exchange needn’t impact your profit margin and can be used to secure a guaranteed margin on your profits.

Package Travel Regulations (PTR) Compliance

Travel trust accounts – including the PTS trust account solution – are Package Travel Regulations compliant. Whilst it may not feel as if you are doing anything more than fulfilling the bare minimum requirements, choosing a PTR compliant solution is a large sign of being trustworthy. It makes the process simpler, confirms the company’s best interests, solidifies great protection for consumers booking a package holiday, and it puts all involved in the best financial position possible.

Financial Transparency

The Trust Account Solution covers all forms of holiday booking and, especially at PTS, lends itself to the many benefits of transparency in financial management. For example, when a consumer books with a PTS member and pays money for their package, that money goes straight into the trust account where it can be tracked every step of the way. It can be tracked for the company, or this information can be supplied to consumers if they so wish. This transparency allows everyone involved to understand exactly where their money is at any given moment, providing everyone involved with a level playing field and the confidence in their financial protection to do what they’ve set out to do.

Financial Efficiency

Alongside the level of transparency, working in trust accounts gives you the efficiency to process refunds or extra payments with much greater efficiency. This is especially true if you work under the PTS trust account. Any payments that need to be paid to the beneficiaries at either end of the booking process can be made swiftly, as all monies in the trust account are reconciled daily, down to the individual booking. It is easy to see where your monies are, and you can request funds transferred out of the trust account as long as you can provide a signed statement from the organiser detailing why this money needs to be released from the trust account by the trustees. All monies are ring-fenced, which means that the monies do not get lost throughout the booking process and are always within the system of suppliers, travel businesses and trustees.

Easier Access to Merchant Services

Merchant services aren’t easy to acquire in the travel business, as there is a certain level of risk that comes with travel. However, working under a trust account will not only provide much smoother and more efficient processes, but will provide the relevant financial security needed for a merchant service to have confidence in working with you.

Business Efficiency

Whilst this may vary from provider to provider, the PTS trust account solution ensures that if you make a payment into trust by 10am, that money will be processed the same day. All payments are also set up by you, the travel business owner (or designated person), through the bespoke innovative PTS technology. This software is highly intuitive, and payments are easy to set up for any travel business. In addition, we reconcile daily down to each individual booking, so everything is always up to date and right there at your fingertips. Our bespoke travel software provides up-to-date, detailed information for you whenever you need it, whether you’re a PTS member, a supplier, or a consumer.

To summarise, travel trust accounts are a highly robust, transparent and efficient solution, so you don’t have to be concerned about protection in any part of the process. This means that you can focus on selling quality packages to consumers, while assuring them that their money is mere hours away if anything should go wrong.

Why Work with Protected Trust Services (PTS)?

Travel trust accounts are beginning to be recognised for the superb level of protection they provide, and here at PTS, we do everything we can to provide the best trust service possible. PTS are the only company in the UK travel industry to reconcile daily down to each individual booking, giving PTS members complete control of their business. All of our members are experienced, passionate companies, and whether they are a one-man band or a large team, they all meet a high standard of expertise and conduct. This allows consumers the confidence to put their trust in our members.

When you become a PTS member, your business and your consumers are protected under our travel trust account, supplier failure insurance, and ATOL (should you require one). Since we reconcile daily, both you and your consumers will always know where client monies are, and we don’t let them leave that trust account if they’re not protected. We also pride ourselves on complete transparency so that consumers, PTS members, suppliers and stakeholders can all have complete confidence in PTS. Each travel business can grow and become the business they want to be, whilst knowing consumer monies are always fully protected. What’s more, we are proud to say that not a single PTS member has ever gone bust while working with us. Every single one of our 300+ members is thoroughly protected, so they have the financially robust platform necessary to thrive!

To find out more about the benefits of the PTS trust account solution, you can visit our Travel Trust Account page. Alternatively, to find out more about how we protect consumers, please visit our page on consumer protection. For any queries you may have, please contact our experienced and friendly staff by calling 0207 190 9988, or via email to ask@protectedtrustservices.com. We offer complimentary zoom meetings to travel businesses looking to understand more, and will be delighted to show you the PTS bespoke technology that ensures transparency, speed, excellence and financial security.

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