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Protected Trust Services (PTS) CEO Daniel Landen shares why 2025 could be the turning point for travel businesses ready to embrace secure financial models.
We all know just how much things have gone up in value over the past five years, from milk to our mortgages. Just looking at June 2025 alone, 59% of UK households reported increased expenses, according to statistics portal, Statista.
We must remember that it’s not just us in the travel industry feeling the pinch on our wallets; it’s our customers too. The very people we rely on to book holidays and travel with us year-on-year.
Financial distress in 2025 is reaching a peak for both travel businesses and their customers.
According to the latest Red Flag Alert from insolvency specialist Begbies Traynor, there has been a 39% year-on-year jump among travel businesses feeling ‘financial distress’. Now is time to make some vital changes for our industry.
Inflation over the last four years has created a vicious cycle in travel. Customers no longer have the funds for the holidays they used to take, and businesses don’t have the funds to adjust prices accordingly.
It’s no surprise that we see articles stating that companies are having a hard time with cash flow. But it’s more than just the cost of the holiday, it is also the cost of running a business in travel; marketing costs, staff wages, rents, and business rates are all only going one way, and that’s up.
Next to this, businesses using bonds and insurance are becoming ‘higher-risk;’ and in return, the price of bonding is increasing, and both insurance and card acquiring services are turning more and more businesses away after balance sheets start to fluctuate downwards.
With so many businesses hyper-focused on surviving in the short-term, it’s easy to ignore everything else going on in the face of financial distress.
If you’re in a position where you are using a third party for services you might think that it doesn’t apply to you, and to a degree, you’re right. However, with the cost of a holiday going up, so does the profit and if you’re giving 30-40% of this to someone else then they are winning just by the cost of the holidays increasing.
Changes to financial models
It appears that as an industry we are moving more towards a separation of consumer money with some companies separating this from working capital.
The CAA’s draft ATOL reform focuses on segregation of customer funds in trust accounts as the preferred protection model and a decisive move away from traditional bonds.
This does not have to be another daunting change being put upon businesses. The move to more protective financial models is the opportunity businesses need to be taking. While the CAA is looking to change compliance to require businesses to segregate funds and separate client monies, PTS members have been doing just that for years and riding this wave of financial distress with relative ease.
It may feel like the worst time to make major changes, but if ever there was a moment that proved the value of a stable travel trust account, it’s now.
Separating client money from working capital isn’t just about protecting the customer, it’s about protecting you, the person working in travel.
Card companies don’t carry the risk, so the rates are low and more importantly stable. There is no bonding each year or insurance to worry about. Paying suppliers when you want and cash flow being your profit, not customer funds.
In a bonding or insurance solution, you will inevitably be paying out your hard-earned money to sustain your business and retain your clients.
You will not lose money in a trust account. Client funds will go in, suppliers will be paid, you will receive your profits, and if anything happens, the client funds will be released back to the client. You will not spend money on your business, only to wish you hadn’t when a client needs a refund. You will not pay out of pocket to keep yourself afloat if your balance sheets fluctuate.
Now more than ever, travel businesses need the stability that a PTS trust account can provide.
With a financial protection method that both the CAA and consumer confidence favours, a franchise ATOL, rapid onboarding, access to affordable card acquiring, daily reconciliation, a 40% reduction on admin time, no profits taken, and more, PTS can give each business the ability to focus on what matters.
You shouldn’t be fighting fires every day, and even now, you don’t have to be. And while the CAA is deciding on the ATOL reform, now is the time to get ahead, to not only work on the short-term solution, but the long-term one as well.
It may not be PTS you choose, but there are some amazing trust providers out there offering solutions for all types of businesses.
So, whilst we have been through the peak booking period in 2025 and are nearing the end of the peak travel period, take the opportunity to look at every option in front of you, even you may be surprised.
Financial distress in 2025 is real, but so is the solution.
To discuss a fast-track move to a trust account and ATOL protection, contact 0207 190 9988 or hellopts@protectedtrustservices.com
