Why Tour Operators Are Racing to Add Buy Now, Pay Later Options

Why Tour Operators Are Racing to Add Buy Now, Pay Later Options

Tour operators face a growing reality: travelers want flexibility at checkout. The numbers tell the story clearly. Nearly 40% of travel companies surveyed by Phocuswright in 2024 had already adopted installment payment options. For tour operators specifically, the decision to offer buy now, pay later (BNPL) is shifting from competitive advantage to operational necessity.

The Travel BNPL Surge

Global BNPL usage is accelerating fast. Juniper Research predicts the number of worldwide BNPL users will climb 107% by 2028, reaching over 670 million from 380 million in 2024. PayPal alone reported more than 32 million active global users had made purchases using its BNPL services as of 2023.

For tour operators, this trend translates directly to booking behavior. According to NerdWallet’s March 2025 report, nearly one in five American travelers planned to use a BNPL service to pay for summer vacations. The message is unambiguous: travelers expect payment flexibility, and they will shop elsewhere if it is not available.

How BNPL Works for Tour Operators

BNPL enables customers to split tour costs into smaller, scheduled payments. The structure varies by provider:

• Short-term installments: Three to four interest-free payments spread over several weeks, ideal for domestic tours or mid-range packages.
• Long-term financing: Monthly payments extending over months or years, suited for premium international expeditions or luxury group travel.

Customers know their exact payment schedule upfront. This transparency appeals to budget-conscious travelers who want to lock in rates without immediate full payment.

Real Market Impact

Major BNPL providers report significant travel sector growth. Klarna announced in September 2024 that the value of travel bookings processed through its platform increased 50% year over year. Affirm reported travel and ticketing volume rose 38% in Q4 2024, crossing $1 billion.

Airlines see similar patterns. Spanish carrier Vueling reported BNPL sales soared 210% after implementing PayPal’s installment option. While airline data dominates headlines, tour operators stand to capture comparable gains, particularly in the experiential travel segment where Gen Z and millennial travelers concentrate.

Demographics Driving Demand

Younger travelers show the strongest BNPL adoption. Gen Z and millennial consumers demonstrate higher affinity for installment payments across all categories, and travel is no exception. These demographics also show greater propensity to use BNPL for live events and experience-based travel, categories where tour operators often specialize.

The Coachella music festival illustrates this behavior. Billboard reported that 60% of general admission ticket buyers opted for payment plans, accepting a $41 handling fee to spread costs over time. Tour operators targeting similar demographics should take note.

Implementation Considerations

Tour operators evaluating BNPL partnerships should assess several factors:

• Integration complexity: Most major BNPL providers offer APIs and prebuilt plugins for common booking platforms.
• Fee structures: Merchant fees typically range from 2% to 8% per transaction, varying by provider and plan length.
• Chargeback risk: BNPL can reduce certain fraud risks while introducing new dispute patterns operators must understand.
• Cash flow timing: Operators receive full payment upfront from BNPL providers, though settlement timing varies.

Key Takeaways

• BNPL adoption in travel is accelerating, with nearly 40% of travel companies now offering installment options.
• Global BNPL users are projected to reach 670 million by 2028, creating a massive addressable market.
• Gen Z and millennial travelers show the highest BNPL usage rates, making it essential for operators targeting these demographics.
• Major BNPL providers report 38% to 50% year-over-year growth in travel bookings.
• Tour operators should evaluate integration costs, fee structures, and cash flow impacts before selecting a provider.

Sources: PayPal, CNBC, Airwallex/Skift