Even before the COVID-19 pandemic put the brakes on travel, “book now, pay later” deals and third-party services were gaining in popularity with travelers.
But in this era of pent-up travel demand and general uncertainty about how and when life – and travel – will return to normal, the notion of putting a future vacation on layaway suddenly makes a lot of sense – and many travel providers are taking notice.
Third-party travel financiers like Uplift and Affirm have been in the business for nearly a decade, but the challenges of the pandemic have brought other players to the table with such offers, too.
From hotels and airlines to resorts and tour operators, FamilyVacationist.com takes a look at how flexible booking options are reshaping the way we pay for travel.
The rise of book now, pay later services
“Purchasing travel can be stressful, especially for big-ticket purchases paid all upfront,” says Brian Barth, CEO of Uplift, a buy now, pay later site focused exclusively on travel. “Helping travelers pay over time gives them access to a vacation they might have never thought possible.”
Uplift partners with more than 150 airlines, cruise lines, vacation packagers and resorts to offer a budgeting tool that lets travelers spread out their purchase rather than waiting until they have the entire cost of the trip on hand before they book. And because Uplift’s installment payment plans are based on either no-interest or low-interest payments over a clear time frame, they’re more economical than putting a trip purchase on a credit card.
“Most credit cards charge a late fee when a payment due date is missed,” notes Barth, “but Uplift never charges a late fee and there are no prepayment penalties. Consumers know exactly what their fixed monthly payment will be at booking as well as how many months it will take to pay off their trip. When you carry a balance on your credit card, it’s difficult to calculate the interest and what needs to be paid each month in order to pay off the balance over a given time period.”
The other big third-party financing site in the space is Affirm, which offers financing options on everything from fitness equipment and electronics to furniture and travel. “The ‘buy now, pay later’ category was already on the rise, and the pandemic sparked an even greater surge,” says Greg Fisher, Affirm’s chief marketing officer. “We believe this is both the result of the rapid acceleration of e-commerce, and because consumers are more money-conscious than ever and want transparent, flexible ways to pay for things they want and need, including travel.”
Barth agrees, crediting the pent-up demand for travel as a result of the pandemic for a strong uptick in bookings late last year. “Our average daily transaction volume was up 32% month over month in December and 34% in January,” he notes.
Expanded book now, pay later options from travel providers
The rise of flexible booking options isn’t limited to third-party financiers. Even before the pandemic, most big hotel chains offered fully refundable reservations. Now almost all of the major U.S. airlines have essentially created a buy-now-fly-later model, too, by permanently eliminating change fees amid the pandemic.
Of course, there is one small catch. “The kicker is that if you want to change your flight, you don’t get a refund, only a voucher,” says Brian Kelly, founder and CEO of The Points Guy, adding that you may not get the full value of your initial purchase if you rebook a cheaper flight. His main tip: “Use your frequent flyer miles because if you want to change or cancel, most of those fees have been waived, so you can get all of your miles and taxes back.”
Tour operators like Intrepid Travel have adopted similar policies. “On most of our tours, once travelers pay the deposit and secure their spot, they have until 21 days before departure to pay the trip’s remaining cost,” says Matt Berna, managing director at Intrepid Travel. This flexible booking policy also allows travelers to cancel or change their tour 21 days before without a change fee.
Another popular small group tour operator, G Adventures, is currently offering $1 deposits on more than 450 trips for travel through March 2022. “We’re seeing a lot of pent-up demand for travel right now, with most people having been confined to a pretty small radius for the past eight months,” explains Ben Perlo, G Adventures’ managing director in the U.S.
“While the vaccine rollout is starting to spark optimism, we also know that we still need to exercise caution until we’re on the other side of the pandemic,” adds Perlo. “That’s why we’ve introduced a few ways for travelers to satisfy their wanderlust by booking now with great deals and terms for travel later.” G Adventures’ book-with-confidence policy offers flexible rebooking terms, allowing travelers to cancel and rebook up to 30 days prior to their departure date on any trip booked before March 31 and departing before Dec. 31 of this year.
Additional booking flexibility is also on the rise
Many travel providers that aren’t offering layaway-style deals are accommodating future travelers in other ways.
Backroads, an upscale tour operator with a focus on active trips, now allows travelers the option to cancel and receive a full refund of their deposit up until April 1 (or until their final payment due date, whichever comes first) in order to give guests more time to decide if travel will work for them without any financial risk. The company has also pushed back final payment due dates for all of its scheduled trips departing before July 1.
That added flexibility, coupled with the vaccine news, seems to be resonating with travelers. “Our phones are ringing practically like before the pandemic, and guests are expressing optimism about traveling again,” says Backroads’ president and founder Tom Hale. “Bookings are two to three times as strong as they were last fall. We are doing everything possible to make it easier for guests to plan their travel with the utmost flexibility.”
South American tour operator Metropolitan Touring, which focuses on travel to the Galapagos, Ecuador, Peru and Colombia, is offering similarly flexible bookings. The company currently requires just a 10%, with full payment due 60 days prior to departure for Galapagos trips, 30 days prior for stays at the biodiverse Masphi Lodge and 10 days at the historic Casa Gangotena in Quito, Ecuador. And in all cases, trips can be rescheduled without penalty.
In Africa, where many communities are suffering from the lack of tourism, tour operators are allowing even greater flexibility. Thanda Safari in KwaZulu-Natal South Africa is not requiring any payment until 30 days before departure. And, if guests are unable to travel once payment has been made, bookings are either rescheduled or refunded. African Bush Camps, which operates in Botswana, Zambia, and Zimbabwe, now allows cancellations with full refunds up to 45 days before the planned arrival.
As for whether these kinds of flexible booking options will stick around after the pandemic, Intrepid Travel’s Matt Berna is optimistic. “I do believe there’s been a permanent shift in accommodating flexible booking policies, which will continue to be of interest to customers and something the travel industry will provide, in some capacity for travelers.”
After a year of challenges for travelers and travel providers alike, that at least seems like a proverbial light at the end of the tunnel.
More from FamilyVacationist:
- Travel insurance: The ultimate guide to what you need
- 15 best all-inclusive resorts in the U.S.
- The best packing cubes for every type of traveler
Josh Roberts is a parent, a traveler, an author and the co-founder of FamilyVacationist.com. You can find his debut novel, “The Witches of Willow Cove,” wherever books are sold online.
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