We’ve all been there: you find the perfect villa for that summer family reunion or the ideal loft for a friends’ getaway. The dates are open, the price is right, but there’s a snag—you aren’t ready to drop two thousand dollars on a credit card today, especially while you’re still waiting for everyone else in the group to confirm. Usually, this is where the tab gets closed and the dream trip gets forgotten.
Airbnb is betting big that it can fix that friction point. As of February 17, 2026, the company has officially expanded its "Reserve Now, Pay Later" feature globally. Following a pilot program in the US and Canada late last year that saw surprisingly high adoption, this move allows travelers to lock in eligible listings without paying a single cent upfront.
It’s a massive shift in how the platform handles booking commitment, designed to make planning easier for guests while aggressively targeting a market segment long dominated by competitors. So, how does it actually work, and is there a catch?
How does ‘Reserve Now, Pay Later’ actually work?
Think of this as a grace period for your wallet. Under the new global system, if you book a listing that has an eligible cancellation policy, you can secure the reservation immediately with $0 down. Instead of being charged instantly or splitting the payment, the full amount is deferred until just before the host’s free cancellation period ends.
This is part of what Airbnb calls "Project Hawaii," a broader innovation cycle focused on the core app experience (search, booking flow, design). AI-driven customer support is a separate strategic pillar, not part of Project Hawaii itself, but reflects a similar commitment to innovation. The logic here is simple: by aligning the payment deadline with the cancellation deadline, Airbnb removes the financial risk for the guest during the planning phase. If your plans change before that deadline, you can cancel without ever having to wait for a refund, because you never paid in the first place.
Is this the same as ‘Buy Now, Pay Later’ loans?
This is a crucial distinction. When you hear "pay later," it’s easy to assume this is another partnership with installment lenders like Klarna or Affirm. While Airbnb does partner with Klarna for a separate "Pay Over Time" feature in some markets, this internal "Reserve Now, Pay Later" option is fundamentally different.
It is not a loan. There is no credit check, no interest, and no third-party lender involved. It is simply a deferred payment model. Unlike the "Buy Now, Pay Later" schemes that split a purchase into four payments over six weeks, this feature keeps the payment as a lump sum—it just pushes the due date into the future. It’s much closer to the "book now, pay at property" model that has made Booking.com a heavyweight in the hotel sector for years.
Which bookings are eligible for the $0 upfront option?
Before you rush to book a penthouse for next New Year’s Eve, you should know that not every listing qualifies. The feature is specifically tied to listings with "Flexible" or "Moderate" cancellation policies. If a host has a "Strict" policy requiring immediate commitment, you’ll likely still need to pay upfront.
Additionally, while the rollout is global, there are currency exceptions. According to the release details, bookings made in Indian Rupees (INR), Brazilian Reals (BRL), and Turkish Lira (TRY) are currently excluded from this feature. However, for the eligible markets, the uptake has been swift. During the pilot phase in North America last year, Airbnb reported that 70% of eligible bookings opted for this deferred payment method.
Why is Airbnb making this change now?
To put it bluntly: conversion. Airbnb wants to stop you from hesitating at the checkout screen. In their Q4 2025 earnings report released on February 12, 2026 (after market close), the company posted revenue of $2.78 billion, a 12% increase year-over-year. While those numbers beat analyst estimates, maintaining that growth requires removing every possible barrier to booking.
CEO Brian Chesky has been vocal about this, framing the feature as a significant revenue driver. By removing the upfront cost, Airbnb is psychologically incentivizing travelers to commit to bookings earlier—and potentially book more expensive stays. Analysts have noted that when the immediate "pain" of paying is removed, travelers are more likely to lock in higher-value accommodations, boosting the Average Daily Rate (ADR).
What are the risks for hosts?
While this is a clear win for guests, the picture is slightly more complex for hosts. The primary concern bubbling up in the community is "reservation squatting." Because there is zero financial commitment required to hold dates, a traveler could theoretically book three different properties for the same weekend while they make up their mind, holding that inventory hostage from other paying guests until the last minute.
However, CFO Ellie Mertz has noted that despite the new investments in these features, margins remain stable. The company is banking on the fact that the increased booking volume and longer lead times will outweigh the cancellation risks.
Looking Ahead
This rollout signals a maturity in Airbnb’s business model, moving away from purely protecting the host’s payout to prioritizing the guest’s booking experience. By effectively subsidizing the risk of cancellation, Airbnb is directly attacking Booking.com’s market share, particularly for group travel where collecting money upfront is a logistical nightmare. The real winner here is the cash-flow-conscious traveler, who can now secure travel plans months in advance without tying up capital. However, hosts will need to watch their calendars closely; if "squatting" becomes prevalent, we may see a shift back toward stricter cancellation policies to force upfront payment.
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