Late payments are a persistent problem across industries, but in the travel sector, the risks and knock-on effects can be especially damaging.

Unfortunately, despite years of campaigning, the Government has offered little concrete support to address this issue, leaving travel firms to manage late-paying clients and suppliers on their own.

Traditional credit control policies help, but there is a smarter, more secure option available to travel firms – conditional payment solutions, commonly known as escrow.

This ultra-low-cost method eliminates the uncertainty of late payments and offers protection for both buyers and sellers.

Why late payments are a serious threat to travel businesses

Chronic late payments can be devastating in the travel sector.

Cash flow interruptions can prevent you from securing bookings, paying suppliers on time, or meeting payroll, especially during peak seasons when working capital is stretched.

How conditional payment (escrow) works for travel firms

With conditional payment:

• The client’s funds are held securely by an FCA-authorised third party (escrow provider).
• The buyer retains full control – their payment is only released to you when agreed conditions, such as confirmation of booking, itinerary delivery, or service completion – are met.
• If conditions are not fulfilled, funds are returned to the buyer, giving them complete confidence in the transaction.

For travel firms, this means:

• Immediate secured payment, removing the risk of late or non-payment.
• Protection from bad debt clients who use chronic late payment to stretch your resources.
• Improved trust with legitimate clients, who know they’re guaranteed to receive the promised service – or their money back.

And crucially, this solution is ultra-low cost, making it an efficient tool for businesses of any size.

Why this is better than traditional credit control

While standard credit control methods (credit checks, clear payment terms, automated reminders) should still be part of your process, they do not remove the fundamental risk that a client might delay or default.

Conditional payment eliminates the risk entirely. No more chasing payments, no more legal costs to recover debts, and no more putting your business under financial strain.

Spotting the wrong type of customer

If a client is unwilling to use conditional payment, that reluctance often reveals something important.

Are they trying to control cash flow at your expense?

Are they masking an inability to pay at all? These are warning signs that the relationship might not be worth pursuing, as the cost of non-payment often outweighs any short-term profit.

Take control of your payment processes

With minimal Government intervention, travel firms should take proactive steps to protect their cash flow.

Implementing conditional payment solutions ensures you stay in control, maintain client trust, and secure your income upfront.

If you have considered integrating conditional payment or other credit control strategies into your business model, contact our team today for advice.