Airbnb Launches ‘Reserve Now, Pay Later’ Globally

Home rental platform Airbnb has rolled out its “Reserve Now, Pay Later” service worldwide, allowing users to confirm bookings without making an immediate payment.

In a statement on 17 February, the company said the new feature enables travellers to secure reservations instantly and pay closer to their check-in date. This reduces the risk of losing upfront payments if travel plans change and a booking needs to be cancelled.

Airbnb first introduced the service last year for domestic travel within the United States. The company said the advance booking option will be available for listings that fall under “Flexible” or “Moderate” cancellation policies. Under this system, guests are charged closer to the check-in date rather than at the time of booking.

The model mirrors the popular e-commerce concept of “Buy Now, Pay Later”, which spreads out expenses and makes costly travel more accessible. According to Airbnb, since its launch in the US, 70 per cent of eligible bookings have used the feature.

During a discussion of its fourth-quarter earnings for 2025, Airbnb said the service contributed to growth in booked nights during the period. Chief Financial Officer Elie Mertz noted that “Reserve Now, Pay Later” has seen strong uptake among eligible guests.

He added that the feature has helped extend booking lead times and shift demand towards larger entire-home listings — particularly those with four or more bedrooms — contributing to an increase in the average daily rate.

Mertz also said Airbnb’s overall cancellation rate rose slightly to 17 per cent from 16 per cent during the quarter, with higher rates observed among customers using the advance booking product. However, he described the increase as not materially significant relative to overall platform cancellations.

Last year, Airbnb conducted a survey of US travellers in partnership with London-based market research firm Focaldata. The survey found that 60 per cent of respondents consider flexible payment options important when booking holidays, while 55 per cent said they would use such options if available.

Airbnb has been experimenting with pay-later products for several years. In 2018, it introduced a feature allowing users to book accommodation by paying 20 or 50 per cent of the total cost upfront and settling the remainder later. In 2023, the company partnered with fintech firm Klarna to allow travellers to split their expenses into four instalments over six weeks.