Airbnb expands its “Reserve Now, Pay Later” globally

Airbnb announced on Tuesday the worldwide rollout of its innovative "Reserve Now, Pay Later" feature, allowing travelers to secure their accommodations without immediate payment. This new option provides users the flexibility to cancel bookings without incurring upfront financial loss if their plans change. Initially launched in the U.S. last year for domestic travel, the feature applies to properties with "flexible" or "moderate" cancellation policies. Customers will be charged closer to their check-in date, rather than at the time of booking. This approach resembles the popular "buy now, pay later" schemes prevalent in e-commerce, aimed at making travel costs more manageable by distributing payments over time. Since its introduction, the feature has achieved a remarkable 70% adoption rate among eligible bookings. During Airbnb's Q4 2025 earnings call, CFO Ellie Mertz highlighted that the feature has positively impacted the number of nights booked, with significant uptake among eligible guests. She noted that it has also led to longer booking lead times and an increased preference for larger properties, particularly those with four or more bedrooms, contributing to a rise in average daily rates. Despite the overall cancellation rate increasing from 16% to 17% in the quarter, Mertz clarified that the rise was not significantly concerning compared to general cancellations on the platform. A survey conducted last year in collaboration with Focaldata revealed that 60% of U.S. travelers value flexible payment options when planning holidays, with 55% expressing a willingness to use such options. Airbnb has been exploring pay-later solutions for several years. In 2018, the platform introduced a model allowing users to secure a booking by paying 20% or 50% of the total cost upfront, with the remaining balance due later. More recently, in 2023, Airbnb partnered with fintech company Klarna to enable users to pay for their stays in four installments over a six-week period.