Airbnb Rolls Out 'Reserve Now, Pay Later' Feature Worldwide Following 70% Adoption Rate in US Market

Airbnb announced on Tuesday the global expansion of its 'Reserve Now, Pay Later' feature, enabling users to secure accommodations without immediate payment requirements. The functionality allows travelers to cancel reservations without financial penalties if plans change, as payment is not collected upfront.

The feature, which initially launched in the United States last year for domestic travel, has now been made available to users worldwide. According to the company, properties offering flexible or moderate cancellation policies are eligible for this deferred payment option.

Key Feature Mechanics:

• Users secure bookings without upfront payment
• Charges are processed closer to the check-in date rather than at reservation time
• Cancellations can be made without immediate financial loss
• Only properties with flexible or moderate cancellation policies qualify

The implementation mirrors the buy now, pay later (BNPL) payment models that have gained significant traction in e-commerce, effectively reducing barriers to expensive travel bookings by distributing costs over time.

Performance Metrics and Impact

Since its initial launch, the feature has demonstrated remarkable adoption rates, with 70% of eligible bookings utilizing the deferred payment option. During the Q4 2025 earnings call, the company reported that the feature contributed to increased booking volumes during the quarter.

Ellie Mertz, CFO of Airbnb, stated during the earnings call: 'Reserve Now, Pay Later saw significant adoption among eligible guests in Q4. It's also led to longer booking lead times and a mix shift towards larger entire homes, especially those with four or more bedrooms, contributing to the increase in average daily rate.'

Cancellation Rate Analysis

Mertz acknowledged that Airbnb's overall cancellation rate increased from 16% to 17% for the quarter, with higher rates observed among users of the upfront booking product. However, she characterized this increase as 'not hugely material relative to the broader cancellations on the platform.'

Market Research Insights

In a survey conducted with Focaldata, a London-based market research firm, Airbnb gathered data from U.S. travelers that revealed:

• 60% of respondents indicated that flexible payment options are important when booking holidays
• 55% stated they would actively use flexible payment options if available

Product Evolution Timeline

Airbnb has been iterating on deferred payment solutions for several years:

• 2018: Launched a product allowing users to book properties by paying 20% or 50% upfront, with the balance due later
• 2023: Partnered with fintech company Klarna to offer installment payments spread across four payments over six weeks
• 2024: Introduced 'Reserve Now, Pay Later' in the U.S. market
• 2025: Global expansion of the feature

The progressive rollout demonstrates the company's strategic focus on reducing friction in the booking process and making premium accommodations more accessible to a broader user base through flexible payment infrastructure.