Banking on Travel
March 19, 2004
TAKEOFFS & LANDINGS
By Heather Won Tesoriero
As appeared in the Wall Street Journal of San Francisco, Oakland, San Jose Metropolitan Area; Denver Metropolitan Area; Springfield - Holyoke Metropolitan Area; and Washington, DC Metropolitan Area.
WITH HIGH-PROFILE bankruptcies this past year shortchanging some travels, many are unaware of a way to safeguard their trip investments: escrow accounts.
An increasing number of tour operators - including Key Tours International of Fairfax, Va., and Imperial Tours of San Francisco and Beijing - have a bank hold money you’ve paid for a vacation in an escrow account. They take their commissions on the trips after they are either under way or completed. “It gives them instant credibility,” says San Francisco travel attorney Al Anolik, co-author of “Traveler’s Rights.”
A bank with an active escrow program, National City Bank’s travel-services department in Birmingham, Mich., says its escrow business has risen about 15% in the past year.
Some travel companies find such accounts a challenge. National Tour Association’s president, Hank Phillips, terms escrow “difficult” for many of his organization’s 620 members because they don’t have enough capital in reserves to operate that way.