TLDRs:
- Airbnb expands pay-later bookings worldwide, allowing users to secure reservations without upfront payment.
- Flexible payment option encourages longer booking lead times and higher-value reservations.
- Demand rises for larger homes, boosting Airbnb’s average daily revenue per stay.
- Cancellation rates tick up slightly among pay-later users but remain manageable for the platform.
Airbnb (ABNB) shares edged higher on Tuesday following the company’s announcement that its “Reserve Now, Pay Later” option is now available globally.
The move is designed to make travel planning more accessible and flexible for users, enabling bookings without immediate payment while still allowing cancellations without financial loss if plans change.
Initially rolled out in the United States last year, the feature was limited to domestic travel and properties with flexible or moderate cancellation policies. With the global launch, users around the world can now book stays and defer payments until closer to their check-in dates. The system mirrors the popular “buy now, pay later” trend in e-commerce, which spreads out costs and allows consumers to manage expenses more easily. Airbnb reported that 70% of eligible bookings in the U.S. adopted the pay-later option during its trial.
Global Pay-Later Option Launches
The worldwide expansion of this payment method comes as Airbnb seeks to capture a larger share of the travel market, especially among cost-conscious travelers.
The flexibility of delayed payments has been well-received, with surveys conducted by Airbnb and London-based Focaldata revealing that 60% of participants consider a flexible payment plan important when booking trips, and 55% would actively use such an option.
Flexible Payments Drive Longer Bookings
Ellie Mertz, Airbnb’s CFO, highlighted during the Q4 2025 earnings call that the feature contributed to longer lead times for bookings.
“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,” Mertz explained.
The longer booking window helps Airbnb better forecast occupancy and revenue while giving travelers added flexibility.
Larger Homes See Increased Demand
The adoption of pay-later bookings has not only increased reservation volume but also shifted demand toward larger homes. Properties with multiple bedrooms are seeing higher bookings as families and groups take advantage of the deferred payment structure.
This shift benefits Airbnb by driving higher average daily rates and boosting revenue per booking.
Cancellations Rise Slightly but Manageable
While the feature has led to a modest rise in cancellations, from 16% to 17% overall, Mertz noted that the increase is not significant in the broader context of the platform’s cancellations.
“This is not hugely material relative to the broader cancellations on the platform,” she said, emphasizing that the benefits of increased booking volume and higher-value reservations outweigh the slight uptick in cancellations.
Airbnb has been experimenting with flexible payment models for several years. In 2018, the company introduced partial upfront payments of 20% or 50%, with the remainder due later. More recently, in 2023, it partnered with fintech firm Klarna to offer installment payments over six weeks.
The global rollout of “Reserve Now, Pay Later” represents the culmination of these efforts and positions Airbnb to attract more travelers by easing financial constraints while maintaining booking flexibility.
Investors responded positively to the announcement, sending Airbnb shares slightly higher as the market anticipates continued growth in bookings and revenue from the expanded pay-later program. With travel demand rebounding globally, the platform’s innovative payment options are likely to play a key role in its growth strategy in 2026.
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