During the ‘cost of living’ crisis, being able to defer paying for trips could help stimulate tourism in the year ahead. Jack Southan reports
Travel tech company Amadeus has partnered with two travel specialists – Uplift and Fly Now Pay Later – to bring “Buy Now Pay Later” (BNPL) booking services into the mainstream via its Xchange Payment Platform (XPP).
The hope is that BNPL services will spark an increase in travel bookings and overall spending by allowing the customer to spread the cost of their trip over a series of installments of six, nine or 12 months.
According to research by Amadeus, 68 per cent of travellers would spend more on travel if BNPL options were widely available. (It’s the same principle as Klarna, which has become popular among online retailers.)
Travel remains a big-ticket item for consumers, especially so when planning a family or long-haul trip in the current climate of financial uncertainty. Buy Now Pay Later options, which are already hugely popular in the retail sector, have emerged over recent years as a way to spread the cost of a purchase across several monthly payments, delivering additional flexibility for the everyday traveller.
Beatrice Bouju, head of partnerships and payments for Amadeus, says: “The growth of BNPL across all sectors has been remarkable and the message from travellers is clear – they want the choice to pay for the trip in installments. Such payment options will help travel’s recovery by facilitating pent-up demand for higher value holidays as travel restrictions are lifted.”
She adds: “Our vision for the Amadeus Xchange Payment Platform is a one-stop-shop for travel companies to access the latest in fintech innovation, so adding BNPL services from two travel specialists to the mix was an easy choice.”
The Amadeus XPP is already used by hundreds of airlines and travel companies , but now all airlines, travel agencies and hotels can add BNPL options to their sales channels via a single connection to Amadeus – making Fly Now Pay Later and Uplift BNPL options more readily available and practical.
Fly Now Pay Later’ chief commercial officer, Stephen Quinn, says: “According to research from Cornerstone Advisors, BNPL use by Gen Z in the US grew six-fold year over year. But Baby Boomer adoption increased even more rapidly, from 1 per cent in 2020 to 18 per cent in 2021. Integrating our services to the Amadeus Xchange Payment Platform provides ease of adoption for the travel industry and greater choice for travellers.”
As financial markets continue to fluctuate, it seems inevitable that travel will sit lower on the list of priorities for lower income consumers, however, the option of spreading the cost of trips will make going on holiday more feasible.