Hotels Integrate Buy Now, Pay Later to Attract Younger Travelers

What's Happening?

The hospitality industry is increasingly adopting Buy Now, Pay Later (BNPL) options to cater to a new generation of travelers. This payment method is gaining popularity, especially among younger consumers, as an alternative to traditional credit cards. According to a NerdWallet report, nearly 20% of travelers used BNPL for their summer travel, prompting hoteliers to consider offering this option. Despite its growing popularity, the travel industry, particularly hotels, has been slow to adopt BNPL compared to online travel agencies like Expedia and Booking.com, which have offered it for years. Some hotels are hesitant due to potential complications at the front desk and concerns about whether BNPL users will spend on additional services during their stay. However, third-party lenders mitigate these risks by ensuring borrowers have the financial resources to repay their loans.

Why It's Important?

The integration of BNPL in hotels represents a significant shift in payment preferences, potentially expanding the customer base by attracting travelers who prefer this method over traditional credit cards. BNPL users often differ from traditional credit card holders, as they may not participate in mileage and rewards programs. Offering BNPL can attract a new segment of travelers, expanding a hotel's customer base. For hotels, integrating BNPL is not just about meeting consumer demand; it also presents a marketing opportunity. Unique Vacations has leveraged BNPL as a tool to drive direct bookings, offering promotions like 0% interest for qualified customers during peak sales periods. These campaigns have proven successful, with increased bookings and average order values.

What's Next?

As BNPL becomes more prevalent, hotels are exploring ways to integrate it into their marketing strategies and customer interactions. Unique Vacations, for instance, is incorporating BNPL options into email notifications and call center operations. The flexibility of BNPL allows hotels to offer upgrades or add-ons, enhancing the guest experience. There are ongoing discussions about integrating BNPL into property management systems, with the ultimate goal of making BNPL as accessible and seamless as credit card payments, offering guests a versatile and appealing payment option.