Airbnb expands ‘book now, pay later’ service globally

Airbnb announced on Tuesday that it is rolling out a “Book Now, Pay Later” feature globally that allows users to secure reservations without paying immediately. This allows users to cancel their reservations without losing their advance payment, even if their plans change.

The company launched this feature in the U.S. last year for domestic travel. Airbnb said properties with “flexible” or “moderate” cancellation policies are eligible for advance booking. With this option, users will be charged closer to their check-in date instead of at the time of booking. This feature mirrors the “buy now, pay later” payment plans popular in e-commerce, making expensive travel more accessible by spreading the cost. The company said that since its introduction, 70% of eligible reservations have adopted the feature.

Airbnb said in its fourth quarter 2025 financial results that this feature contributed to an increase in room reservations in the quarter.

“In the fourth quarter, we saw significant adoption of ‘book now, pay later’ among our eligible guests. We also experienced longer booking lead times and a mix shift to larger overall homes, particularly those with four or more bedrooms, which contributed to higher average daily rates,” Airbnb Chief Financial Officer Ellie Martz said on a conference call.

Merz noted that Airbnb’s overall cancellation rate rose from 16% to 17% in the quarter, with higher cancellation rates among customers using prepaid booking products. But this is “less significant than the widespread cancellations on the platform,” she said.

The company surveyed U.S. travelers last year in collaboration with Focal Data, a London-based market research and polling firm. Of those surveyed, 60% of participants said flexible payment options were important to them when booking travel, and 55% said they would use flexible payment options.

The company has been experimenting with postpaid products for years. In 2018, Airbnb launched a service that allows users to book accommodation by paying 20% ​​or 50% of the total price. You have to pay upfront and the rest later. In 2023, the company partnered with fintech company Klarna to allow users to pay for their stay in four installments over six weeks.