Airbnb will allow US users book stays without paying upfront

Airbnb has launched a new feature called “Reserve Now, Pay Later” that lets users in the U.S. reserve a property without paying upfront, potentially allowing people to cancel their bookings with less hassle if their plans change.

The feature is applicable to properties that have a “flexible” or “moderate” cancellation policy. Flexible policies let users cancel their reservation up to 24 hours before they check-in, while moderate policies allow for no-fee cancellations until five days before check-in.

Users will need to pay the full amount for their booking before the listing’s free cancellation period ends. Airbnb will send users a reminder to pay before that date.

The company is not new to the buy-now, pay-later arena. In 2018, it launched a “Pay part now, part later” product that allowed users to pay either 20% or 50% in the first tranche and the rest later. In 2023, the company teamed up with Klarna to let users pay for their stays in four installments over six weeks.

Citing a survey it conducted with Focaldata, Airbnb said 55% of those surveyed preferred a flexible payment option while booking a stay, with 42% saying they missed out on properties while trying to figure out payment logistics with other travelers.