The coronavirus has created a global crisis and with this, many meeting planners have been asked to either postpone or cancel their events. In this type of situation, one of the major benefits of advanced deposits being held in escrow is that the money cannot be held hostage by either party. Both parties will have to negotiate fairly and once terms are set, the instructions can be executed. If an event or program is simply going to be postponed and not canceled, the funds can be held in escrow until new dates are set.
Some of the other benefits of the escrow process during this time is that the client’s budget will remain committed and the budget is also shielded from foreign exchange fluctuations. Additionally, the funds will earn interest until the program can take place and the funds are released.
How it Works
Escrow requires advance to deposit funds to be held in an account. This provides the supplier and client protection as the funds will only be released when the program finishes. The funds can be interrupted if certain trigger conditions are met. This might include bankruptcy of the client, a change in ownership, or a force majeure. During this time, a force majeure might be implemented more as a result of the virus.