Airbnb expands its “Reserve Now, Pay Later” globally

Airbnb said Tuesday it is launching its “Reserve Now, Pay Later” feature — which lets users secure bookings without immediate payment — globally. This allows users to cancel their booking if there is a change in plan without losing any money up front.

The company launched this feature in America last year for domestic travel. Airbnb said properties with a “flexible” or “moderate” cancellation policy are eligible for advance reservations. With this option, users are charged closer to their check-in date rather than at the time of booking. This feature mirrors the “buy now, pay later” payment plans that have become popular in e-commerce, making expensive travel more accessible by spreading the costs. The company noted that since launch, the feature has seen 70% adoption for eligible bookings.

During its earnings call for Q4 2025, Airbnb said the feature helped increase nightly bookings in the quarter.

“Reserve Now, Pay Later saw significant adoption among eligible guests in Q4. This led to longer booking times and a mix shift toward larger homes, particularly those with four or more bedrooms, which drove average daily rate growth,” Airbnb CFO Ellie Mertz said during the call.

Mertz noted that Airbnb’s overall cancellation rate for the quarter increased from 16% to 17%, and was higher among customers who use the upfront booking product. However, she said it was “not very significant relative to widespread cancellations across the platform.”

Last year, the company surveyed US travelers with London-based market research and polling company FocalData. Of those surveyed, 60% of participants said that a flexible payment option is important when booking a vacation, and 55% said they would use a flexible payment option.

The company has been experimenting with pay-later products for years. In 2018, Airbnb launched a product that allowed users to book a property by paying either 20% or 50% of the total fee. Advance, rest later. In 2023, the company partnered with fintech firm Klarna to let users pay for their stay in four installments over six weeks.