Airbnb announced on Tuesday that it is launching its “Reserve Now, Pay Later” feature globally. This option allows users to secure a booking without paying immediately, and to cancel without losing money if their plans change. The feature was first introduced in the United States last year for domestic travel.
Properties listed with a “flexible” or “moderate” cancellation policy are eligible for this upfront reservation. Guests who choose this option are charged closer to their check-in date rather than at the moment of booking. The feature functions similarly to “buy now, pay later” plans popular in e-commerce, aiming to make travel more accessible by spreading out costs. Since its launch, the feature has seen a 70% adoption rate for eligible bookings.
During its fourth-quarter 2025 earnings call, Airbnb stated the feature helped increase nights booked. Chief Financial Officer Ellie Mertz said, “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 noted that Airbnb’s overall cancellation rate rose from 16% to 17% for the quarter, and was higher among customers using the upfront booking product. However, she characterized this increase as not hugely material relative to broader platform cancellations.
Last year, the company surveyed U.S. travelers in partnership with Focaldata, a London-based market research firm. The survey found that 60% of participants consider a flexible payment option important when booking a holiday, and 55% said they would use such an option.
Airbnb has been experimenting with pay-later products for several years. In 2018, it launched a product that allowed users to book by paying either 20% or 50% of the total upfront, with the remainder due later. Then in 2023, the company partnered with the fintech firm Klarna to let users pay for stays in four installments over six weeks.