Airbnb expands its “Reserve Now, Pay Later” globally

Airbnb said on Tuesday that it is launching its “Reserve Now, Pay Later” feature — which lets users secure bookings without immediate payment — globally. This allows users to cancel their bookings if there is a change of plans without losing money upfront.

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

During its earnings calls for Q4 2025, Airbnb said that the feature helped grow nights booked in the quarter.

“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,” Ellie Mertz, CFO of Airbnb, said during the call.

Mertz noted that Airbnb’s overall cancellation rate jumped from 16% to 17% for the quarter, and it was higher among customers who use the upfront booking product. However, she said that this was “not hugely material relative to the broader cancellations on the platform.”

Last year, the company surveyed U.S. travelers along with Focaldata, a London-based market research and polling company. Of those surveyed, 60% of participants said that a flexible payment option is important while booking a holiday, and 55% said that would use a flexible payment option.

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