Airbnb has announced that it will now let guests pay a deposit at the time of booking, marking a notable shift from the current state-of-play that requires you to pay the full amount up front.
The new “pay less up front” option has been in testing prior to launch, and Airbnb said that around 40 percent of guests chose to delay full payment when presented with the opportunity. According to the company, guests can choose to pay a 50 percent deposit “in most cases” in advance, with the remainder payable shortly before the check-in date.
Above: Airbnb: Pay less up front
With nearly $ 5 billion in equity investment, Airbnb has emerged as the poster child for the home-sharing economy, an industry that has disrupted the traditional holiday letting market. Rivals in the space include OneFineStay, which was bought out by hotel giant AccorHotels or $ 170 million, while HomeAway and HouseTrip were snapped up by Expedia and TripAdvisor respectively.
Airbnb, for its part, is expected to go public in the next couple of years, and in the meantime it’s pushing to make its platform more appealing to guests. Back in November, the company announced it would make it easier for groups split the cost of their stay, while it acquired Accomable to improve accessibility for disabled travelers.
Adopting a deposit-based approach fits into the broader picture here, as it allows guests to pay in two installments. It could also go some way toward helping hosts secure more bookings, given that would-be guests may be more inclined to make a booking if the up-front payment is lower. Airbnb also said the new payment option “encourages” bookings even further ahead of time.
“We’ve found that Pay Less Up Front encourages bookings further in advance,” it said in a statement. “Compared with ordinary bookings, the Pay Less Up Front payment option led to bookings with nearly double the lead time, helping hosts to secure and manage bookings more easily.”
The “pay less up front” option is arriving globally from today across all Airbnb platforms. The only real caveats to qualifying for the option is that the stay must be booked at least 14 days in advance, while the overall value must be more than $ 250.
