Your guests are already splitting the cost of their hotel stays. The question is whether they’re doing it on your website or someone else’s.

Buy now, pay later (BNPL) has become a familiar option for travelers booking flights, hotels, and vacation packages. In January 2026, Expedia Group announced an expanded partnership with Affirm to offer installment payments across Expedia, Hotels.com, and Vrbo in the US.

For independent hotels, that’s worth paying attention to. Travelers increasingly have a choice in how they pay, and your direct booking experience needs to keep up.

By offering BNPL through your booking engine or payment links, you can give guests more flexibility without waiting months to collect their payments. Your property gets paid upfront, while the provider manages the guest’s installment plan.

In this guide, we’ll break down how buy now, pay later works for hotels, the benefits and costs, what to look for in a provider, and how to get started.

Key takeaways

Buy now, pay later (BNPL) allows guests to pay for hotel stays in installments while hotels receive payment upfront.
Offering BNPL can help hotels increase direct bookings, improve conversion rates, and encourage higher-value reservations.
BNPL is especially popular among younger travelers, with 62% of millennials and 49% of Gen Z saying it influences their travel booking decisions.
Hotels should compare BNPL processing fees against OTA commissions, potential booking revenue, and acquisition costs to evaluate profitability.
BNPL payment plans may include interest and affect guests’ credit, so hotels should clearly communicate payment and cancellation terms.
Integrating BNPL with your PMS and booking engine helps streamline payment processing, reconciliation, and reporting.

What is buy now, pay later for hotels?

Buy now, pay later (BNPL), also known as book now, pay later, is a flexible payment option that allows guests to split the cost of their hotel stay into installments rather than paying the full amount upfront.

Instead of collecting payments directly from guests, hotels work with a BNPL provider like Affirm, which handles guest approval, installment payments, and repayment collection. Hotels receive the booking amount upfront, minus processing fees, while guests pay over time.

Depending on the provider, purchase amount, and guest eligibility, payment plans can range from four interest-free installments to longer monthly payment schedules.

Unlike traditional “book now, pay at the property” options, BNPL allows hotels to receive payment before check-in without requiring guests to cover the full cost of their stay at the time of booking. Your existing rates and cancellation policies still apply.

BNPL vs other pay-later options

Not all pay-later payment options work the same way. The biggest differences for hotels come down to when you get paid, who takes on the payment risk, and how much flexibility you offer guests.

Why guests expect buy now, pay later in 2027

Buy now, pay later is becoming a familiar part of how travelers plan and pay for their trips. According to a 2026 NerdWallet survey, 17% of US summer travelers planned to use BNPL to cover travel expenses.

And adoption continues to grow. Affirm reported 27.8 million active consumers at the end of fiscal 2026, a 21% increase year over year.

For hotels, this signals a shift in guest expectations. Travelers are increasingly comfortable spreading the cost of their purchases over time, whether they’re booking flights, accommodations, or vacation packages. Offering the same flexibility through your direct booking engine gives them one less reason to book elsewhere.

7 benefits of buy now, pay later for hotels

Adding buy now, pay later (BNPL) to your hotel’s payment options can do more than give guests another way to pay. From increasing direct bookings to improving cash flow, here’s where BNPL can make a difference for your property.

1. Improves conversion rates

The total cost of a hotel stay can be a major hurdle at checkout, especially when guests are booking well in advance and paying for flights, transportation, and other travel expenses at the same time.

BNPL removes some of that immediate financial pressure by allowing guests to spread the purchase amount across smaller installment payments.

For hotels, offering BNPL at checkout can help reduce payment-related hesitation and give guests another reason to complete their booking directly.

2. Increases booking value

Spreading the cost can be all the convincing a guest needs to add a night, move up a room category or say yes to the spa package. Affirm reports that travel providers using BNPL see up to a 48% increase in average hotel booking value.

It also changes how guests plan around high season, when rates, flights, and activities cost more. Without a pay-over-time option, travelers often drop a room category or skip a night. With one, the wishlist stays intact. Pair it with upselling on room types and add-ons, and the extra spend feels manageable instead of risky.

3. Boosts property revenue

The proof is in the payment method when implementing your next BNPL for your hotel. Merchants saw a 14% increase in revenue for payment sessions where BNPL was an eligible payment method. How does this translate for your property?

Your guests are not only more likely to complete their transaction with your hotel, but they’re also more likely to spend more of their hard-earned cash on your property. This provides a huge boost to your additional offerings, like upselling on hotel room types and property upgrades, as well as ancillary services like spa treatments and on-site activities.

4. Extends booking windows

When guests can stretch the cost, they commit earlier. That gives you more lead time to forecast future demand, manage inventory and price with confidence.

Colin Whitney, VP of Flexibility at HTS (Hopper Technology Solutions), described the pattern from the travel-search side at Ambition Miami, with guests booking further out while costs stay high:

There is a rise in buy now pay later as well. We are seeing that that is becoming a big trend because that obviously helps offset some of the wallet spend and and kind of stretch it over time. But really becoming a major shift in the markets that we really haven’t seen in in quite some time.

There is a rise in buy now pay later as well. We are seeing that that is becoming a big trend because that obviously helps offset some of the wallet spend and and kind of stretch it over time. But really becoming a major shift in the markets that we really haven’t seen in in quite some time.

An earlier booking that would have otherwise waited for payday, or gone to a competitor, is a booking you can plan around.

5. Improves margins

When a guest picks BNPL on your own website, the booking stays direct, and so does the guest relationship. Compare the processing fee on a BNPL booking with the commission you’d pay on the same stay through an online travel agency, and the math often favors direct. It also means fewer discounts and promotions to move rooms in low season.

6. Enhances the guest experience

Guests want to pay the way they pay everywhere else. With a BNPL provider like Affirm, they see the total cost and the schedule before they confirm, and Affirm sends email and text reminders before each payment is due. That clarity builds trust at the most nervous moment of the booking, and it makes premium stays more accessible to more travelers, from a romantic weekend in New York to a multi-day resort package.

7. Keeps pay-later guests on your own site

Guests who want installments often default to an OTA because that’s where the option lives. Offering BNPL in your booking engine and in pay-by-link requests lets you catch them directly.

Pay by Link matters more than it sounds. When a guest inquires by phone, email or a messaging app, you can send a secure link that includes the Affirm option, so the conversation ends in a booking instead of a “let me think about it.” Highlight BNPL wherever guests make decisions, including your digital marketing channels, email nurtures and social media.

How buy now, pay later works for hotels

Next, let’s look at how BNPL works and how it fits with your property. When selecting and implementing buy now, pay later, keep in mind that it’s ultimately about what works best for your hotel and your guests.

For your guest

The guest selects BNPL at checkout in your booking engine, or opens a pay-by-link request you’ve sent
The BNPL provider runs a quick eligibility check and shows real-time plan options, including the total cost and payment schedule
The guest verifies their identity with a mobile number and confirms the plan
The reservation is confirmed in Cloudbeds
The BNPL provider collects the installments and reminds the guest before each one is due

For your property

The BNPL provider pays your property the full booking amount, minus the processing fee, rather than holding it until the guest finishes repaying. The funds then arrive through your regular Cloudbeds Payments payout schedule. You don’t wait for arrival day to be paid, and you don’t chase installments. Guest credit and repayment risk sits with the provider.

Some things stay with you, and that’s by design. Refunds start from the reservation folio in Cloudbeds, and the BNPL provider handles the reversal once you submit the request. Your cancellation and rate policies still apply to the booking, so keep them clear across every payment method.

What buy now, pay later costs hotels

Here’s where most BNPL guides go quiet, so let’s be direct. BNPL isn’t free for the property. The provider takes a processing fee, and that fee is the price of getting paid up front, converting guests who might hesitate and moving risk off your desk.

Run the math with your own numbers:

Booking value that would have gone to an OTA, minus the commission you’d have paid
Booking value that would have been lost to hesitation, minus the fee
Added value from the extra night or upgrade guests book when payments feel lighter
Chargeback and no-show exposure you no longer carry on those bookings

How to choose a buy now, pay later provider for your hotel

Not every provider fits every property. Look for:

Hospitality and travel experience, especially with higher-ticket stays
Plan flexibility, from short pay-in-four to longer monthly terms
Transparent merchant fees with no hidden add-ons
Clarity on who carries credit and fraud risk
Coverage across the regions, currencies and booking channels you sell in
Native integration with your PMS and payments, so reservations, folios and payouts reconcile on their own

Why payments belong inside your PMS

Most pay-later add-ons sit outside the PMS, which leaves someone matching payouts to reservations by hand.

With Cloudbeds, payments, the booking engine, the reservation folio, and the guest profile run on the same data layer. When a guest pays through BNPL, the transaction lands on the reservation, the payout reconciles with every other payment, and disputes appear in one place.

It’s one platform deliberately built on a shared data model, not a stack of separate tools stitched together at the login screen.

Let guests pay their way.

Make it easier for travelers to say yes with flexible payment options built into Cloudbeds.

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About Lana Cook

Lana Cook is a Content Manager at Cloudbeds where she is able to combine her love of writing and passion for travel. She has spent the last few years writing about all things technology and the ways in which it can be used to help businesses thrive. When she’s not busy writing, you can find her checking out the latest movie or searching for a new TV show to binge.