Lodging firm Airbnb (ABNB) recently rolled out a new feature called “Reserve Now, Pay Later” that will give U.S. travelers more freedom when booking a place to stay. This new option allows guests to secure a reservation without paying anything upfront, as long as the listing has a flexible or moderate cancellation policy. For reference, flexible policies let guests cancel for free up to 24 hours before check-in, while moderate ones allow cancellations up to five days in advance. Full payment is still required before the cancellation window ends, and Airbnb will send reminders to make sure guests pay on time.
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This new feature builds on Airbnb’s existing flexible payment offerings. In fact, back in 2018, the company launched “Pay Part Now, Part Later,” which let users pay either 20% or 50% at the time of booking and the rest later. Furthermore, in 2023, Airbnb partnered with Klarna to allow guests to split the cost of their stay into four payments over six weeks. Therefore, the new Reserve Now, Pay Later option adds to this lineup by removing upfront costs entirely at the moment of booking, thereby making it especially helpful for group trips or budget-conscious travelers.
Interestingly, recent data shows that this change meets a growing demand. According to a survey by Airbnb and Focaldata, 60% of travelers say that flexible payment options are important when booking a trip. Indeed, over half already use flexible payment features, and 42% said they’ve missed out on places they wanted to go to due to the time it took to figure out payment with others. As a result, by letting guests delay payment while still securing their booking, Airbnb hopes to boost both convenience for travelers and potential bookings for hosts.
Is ABNB Stock a Good Buy?
Turning to Wall Street, analysts have a Hold consensus rating on ABNB stock based on 11 Buys, 16 Holds, and five Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average ABNB price target of $140.50 per share implies 11.5% upside potential.
