Travel Now Pay Later Services Market to Reach USD 98.6 Billion by 2033

Introduction

The Global Travel Now Pay Later (TNPL) Services Market is projected to reach approximately USD 98.6 billion by 2033, growing from USD 46.1 billion in 2023. This growth is expected to occur at a compound annual growth rate (CAGR) of 7.9% over the forecast period from 2024 to 2033.

Travel Now Pay Later (TNPF) services represent a financing model that allows consumers to book and pay for travel services in installments, rather than paying the full amount upfront. This service is often integrated with online travel agencies (OTAs) or airlines, enabling travelers to spread their payments over time, typically with little or no interest, depending on the terms. The offering is similar to other buy-now-pay-later (BNPL) schemes but is specifically tailored to the travel industry, including flights, hotels, tours, and other travel-related expenses. TNPF is gaining traction among consumers seeking more flexible payment options for travel expenditures.

The Travel Now Pay Later services market is the segment of the travel industry focused on facilitating consumer access to financing options for travel bookings. This market includes a range of financial products that allow consumers to finance their travel experiences over time. It consists of various players, including fintech companies, traditional travel agencies, and OTAs, which partner with payment service providers or third-party BNPL platforms to offer flexible payment solutions. The market is driven by the increasing adoption of digital payment systems, changing consumer preferences for convenience, and the rise of budget-conscious travel planning. Additionally, the market encompasses both short-term loans and installment-based payment plans for various travel-related expenses.

Several factors are contributing to the growth of the TNPF services market. First, the ongoing shift in consumer behavior towards more flexible and convenient payment methods has significantly accelerated, especially post-pandemic. With economic uncertainties, consumers are increasingly prioritizing financial flexibility, making TNPF an attractive option for travel bookings. Additionally, the rise of younger, tech-savvy consumers who are familiar with BNPL services for retail purchases is driving adoption in travel.

Another key growth driver is the proliferation of digital payment solutions and the increasing integration of BNPL services into mainstream travel booking platforms. As travel demand rebounds globally, the increasing affordability and ease of access to travel financing options are supporting higher conversion rates and spend per customer, further stimulating market growth.

Demand for TNPF services is largely driven by evolving consumer preferences for flexible payment solutions. A significant portion of the consumer base seeking TNPF services includes millennials and Gen Z travelers, who prefer spreading out payments rather than committing to a lump sum upfront. This demographic is also more inclined to seek out travel experiences, making them a core target for TNPF providers.

Furthermore, there is rising demand from mid-to-high-income consumers who are eager to book aspirational travel experiences but prefer to mitigate the financial burden. The increasing trend of experiential travel—where consumers prioritize vacations and unique travel experiences over traditional goods—is further fueling demand for travel financing options.

The TNPF services market presents several key opportunities for stakeholders. First, expanding offerings to international travel markets can unlock significant growth potential, especially in emerging economies where disposable income levels are rising, and consumers are becoming more accustomed to digital financial products. Additionally, by collaborating with airlines, OTAs, and hospitality providers, TNPF service providers can enhance consumer experience, streamline the booking process, and increase conversion rates. There is also the opportunity to integrate loyalty programs and offer personalized financing options, which can increase consumer retention and drive repeat business.

Moreover, as travel demand continues to diversify with the rise of niche tourism (such as eco-tourism, wellness travel, and adventure travel), TNPF providers can cater to these new segments by offering tailored financing solutions that align with the specific needs of these travelers. Lastly, as regulatory frameworks for BNPL services mature globally, there may be opportunities for TNPF providers to engage in partnerships with regulatory bodies to create industry standards, fostering trust and security in the payment ecosystem.

Key Takeaways

• The Global Travel Now Pay Later Services Market is projected to reach approximately USD 98.6 billion by 2033, up from USD 46.1 billion in 2023, reflecting a CAGR of 7.9% during the forecast period from 2024 to 2033.
• In 2023, Leisure accounted for a dominant share of 55.3% in the Based on Type segment of the Travel Now Pay Later Services Market.
• In 2023, International destinations held a leading market position in the Based on Destination segment of the Travel Now Pay Later Services Market, with a 65.1% share.
• In 2023, Installment Plans dominated the Based on the Payment Plan segment of the Travel Now Pay Later Services Market, capturing 52.4% of the market share.
• In 2023, Travel Agencies held the largest share of 33.3% in the Based on Distribution Channel segment of the Travel Now Pay Later Services Market.
• North America led the market with a 60.4% share in 2023, generating USD 27.8 billion in revenue from the Travel Now Pay Later Services Market.

Travel Now Pay Later Services Statistics

• The demand for “Travel Now, Pay Later” (TNPL) is seeing rapid growth, especially among individuals aged 26-45 from major cities like Ahmedabad, Bengaluru, Chennai, and Delhi-NCR.
• Young Indians, particularly Gen Z and millennials, are fueling a significant rise in travel to Thailand, accounting for 80% of bookings.
• Globally, over 360 million people are currently using BNPL services, with projections suggesting this will increase by 157%, reaching 900 million users by 2027.
• The BNPL market is expected to hit $80.77 billion in the coming years, with the U.S. market alone projected to reach $9.2 billion by 2030.
• PayPal Credit leads the BNPL space, used by 57% of consumers. However, 18% of U.S. BNPL users report missing payments.
• In the UK, BNPL adoption has surged, with 50% of adults having used the service by 2024, up from 36% in early 2023.
• 38% of Brits used BNPL in the year leading up to January 2024, and 14% used it for the first time during that period.
• An Expedia study found that 80% of respondents aged 18-34 were willing to pay extra to upgrade their travel experience.
• 73% of Gen Z have used BNPL, with 70% intending to continue using it in the future, indicating strong future demand.
• In 2023, 68% of online traffic to travel and hospitality websites came from mobile devices, highlighting the shift toward mobile-first booking options.
• Despite mobile traffic dominance, desktop usage still accounts for about 62% of sales, with consumers using mobile for research but preferring desktop for bookings.
• 39% of users favor apps over mobile websites, citing speed as a key advantage, while 30% appreciate the enhanced functionality of apps.
• A significant 82% of travel agents recognize the growing need for digital retailing solutions for both leisure and business travel.
• Corporate travel managers are feeling the pinch of rising airfares, with 86% reporting that costs have impacted their travel plans.
• 11% of BNPL users for travel services have incurred late fees, which are typically higher than those of traditional credit cards.

Emerging Trends

• Increased Adoption Among Millennials and Gen Z: The Travel Now Pay Later (TNPL) model has become particularly popular among younger generations, especially Millennials and Gen Z. These age groups are more likely to prioritize experiences over material goods, and TNPL services offer an affordable way to travel without immediate financial burden. Studies indicate that approximately 40% of consumers aged 18-34 have used buy-now-pay-later services, with a significant portion using it for travel-related purchases.
• Integration with Digital Wallets and Mobile Apps: As mobile payments continue to gain traction, TNPL services are increasingly being integrated into digital wallets and mobile apps. Payment platforms like PayPal, Apple Pay, and Google Pay now allow users to access TNPL options directly through their apps. This seamless integration reduces friction in the checkout process, improving customer experience and encouraging higher usage rates.
• Customizable Payment Plans: One emerging trend is the availability of highly flexible payment plans that allow consumers to choose their repayment terms. This customization could include bi-weekly, monthly, or even seasonal payment options, making travel more accessible to people with varying financial capabilities. Travel companies are incorporating these plans to cater to a wider demographic, enhancing overall market appeal.
• Expansion into International Markets: TNPL services, initially popular in North America and Europe, are expanding into emerging markets. Countries in Asia-Pacific and Latin America are seeing significant adoption, driven by increasing middle-class populations and rising disposable incomes. In markets such as Southeast Asia, over 25% of consumers reported using BNPL services, with a notable share opting for travel-related services.
• Partnerships with Travel Industry Giants: Major airlines, hotels, and online travel agencies (OTAs) are increasingly partnering with TNPL providers to offer consumers more financing options. For example, several airlines now allow passengers to pay for tickets over several months. These partnerships enable travel companies to cater to a broader customer base, potentially increasing bookings and revenue while enhancing customer loyalty.

Top Use Cases

• Booking Airline Tickets: One of the most common uses of TNPL services is for booking airline tickets. With the high upfront cost of air travel, particularly for long-haul flights, TNPL allows travelers to break down payments into smaller, more manageable installments. This flexibility is especially appealing for families or individuals planning complex itineraries. Around 28% of travelers reported using BNPL for flight purchases in 2023.
• Hotel Stays and Accommodation: Hotels and resorts are increasingly offering TNPL options to customers looking to reserve their stays. This allows travelers to secure accommodations without paying the full amount upfront. Hotels, especially luxury brands, report a rise in conversions when offering flexible payment options, with a 15-20% increase in bookings tied to BNPL adoption.
• Vacation Packages: Comprehensive vacation packages, including flights, hotels, and activities, often involve significant upfront costs. By using TNPL services, travelers can spread out payments over time, making these all-inclusive packages more attractive to a wider audience. In some markets, 30% of holiday bookings now involve flexible payment terms, which encourages higher spend per customer.
• Tours and Experiences: Another key use case is booking tours and activities. Whether it’s a guided city tour, adventure travel, or excursions, TNPL services allow travelers to book experiences in advance without worrying about immediate payment. This model is especially beneficial for travelers seeking immersive experiences that involve multiple services.
• Cruise Ship Bookings: Cruises are high-ticket items, often requiring payments well in advance. TNPL services are now being used to book cruises, allowing travelers to secure their spot without paying in full upfront. The global cruise industry has seen a significant uptick in bookings through flexible payment options, with some cruise lines reporting up to 25% of their sales being financed through TNPL services.

Major Challenges

• High Default Rates and Financial Risks: One of the major challenges with TNPL services is the risk of payment defaults. As consumers increasingly use these services for discretionary purchases, including travel, there is a growing concern about non-payment and the financial strain it could place on both the providers and consumers. Some reports suggest that around 10-15% of users default on their payments, particularly during economic downturns.
• Regulatory Scrutiny and Compliance Issues: As the TNPL sector grows, regulators are paying closer attention to these services, especially concerning transparency, interest rates, and fees. In some regions, lawmakers are considering tighter regulations to ensure that consumers are fully aware of the terms and conditions of their purchases. Non-compliance could lead to heavy fines and stricter oversight, challenging the growth potential of TNPL companies.
• Limited Consumer Awareness: While TNPL services are gaining popularity, there is still a significant portion of the population that remains unaware of these options. In markets with low digital penetration or older demographics, the use of TNPL is still relatively low. Companies need to invest heavily in consumer education and marketing to boost awareness and adoption, particularly in less mature markets.
• Potential for Overspending and Debt Accumulation: Some critics argue that TNPL services may encourage overspending, particularly in the travel sector, where consumers may book expensive vacations they cannot truly afford. There are concerns that this could lead to debt accumulation for consumers, potentially impacting their financial health. In 2023, it was estimated that about 18% of consumers using BNPL for travel-related purchases reported struggling with managing multiple payment schedules.
• Operational Costs for Travel Providers: For travel service providers, integrating TNPL services into their offerings can be costly. Payment processing fees, platform integration, and the management of installment plans can increase operational overhead. Smaller travel companies may face significant barriers in adopting TNPL solutions, which could limit the widespread uptake of this payment model across the industry.

Top Opportunities

• Emerging Middle-Class Consumer Base in Asia-Pacific: One of the most significant growth opportunities for TNPL services is in the Asia-Pacific region, where a rapidly expanding middle class is eager to travel but faces financial constraints. By offering flexible payment options, TNPL services can tap into this growing consumer base. In countries like India and China, over 40% of the population is projected to enter the middle class by 2030, driving demand for accessible travel financing options.
• Expansion of Cross-Border Travel: Cross-border travel has rebounded post-pandemic, and TNPL services can support this growth by offering travelers an easy way to manage expenses across different currencies and destinations. Travelers who book international trips often face high upfront costs for flights, accommodations, and activities. By offering TNPL, travel companies can make these international journeys more affordable and attract customers from emerging markets.
• Partnerships with Corporate Travel Programs: Companies that handle corporate travel can leverage TNPL to offer employees more flexible payment options for business trips. By incorporating TNPL into corporate travel programs, businesses can give employees more freedom in planning their trips, which could lead to increased adoption. Corporate travel spending is expected to grow by approximately 10% annually in the coming years, creating opportunities for TNPL providers to target this lucrative segment.
• Integration with Sustainable Travel Initiatives: As sustainability becomes more important to travelers, TNPL services can partner with eco-friendly travel companies, such as sustainable hotels, carbon-neutral airlines, and green tour operators. Providing flexible payment terms for eco-conscious consumers can further drive market growth, with the number of sustainable travelers increasing globally. A recent study indicated that 60% of travelers are willing to pay more for sustainable travel options.
• Targeting Senior Travelers: The senior population, particularly in North America and Europe, is an untapped market for TNPL services. Older travelers often have fixed incomes but may want to travel more frequently or in luxury. By offering TNPL services tailored to seniors, such as fixed payment schedules or lower interest rates, providers can unlock a new demographic, as nearly 25% of senior citizens are now traveling internationally annually.

Key Player Analysis

• Afterpay: Afterpay, founded in Australia, is a prominent player in the Buy Now Pay Later (BNPL) market. It allows consumers to make purchases and split payments into four interest-free installments. Afterpay has expanded its reach to multiple international markets, including the United States, United Kingdom, Canada, and New Zealand. The company was acquired by Block (formerly Square) in a USD 29 billion deal, significantly broadening its market scope and integration into Block’s broader payment ecosystem.
• PayPal Holdings, Inc.: PayPal, a global leader in online payments, has successfully entered the BNPL space with its “Pay in 4” offering. This service allows consumers to split their purchases into four interest-free payments, available through PayPal’s extensive network. PayPal’s large, established user base of over 400 million active accounts provides a significant advantage in scaling its BNPL service across North America, Europe, and other key regions.
• Splitit: Splitit distinguishes itself by allowing consumers to use their existing credit cards for BNPL purchases. Unlike many other BNPL providers, Splitit does not require credit checks or charge interest, making it an attractive option for consumers looking to avoid additional fees. The platform operates globally, processing millions in transactions annually and establishing partnerships with major merchants across diverse regions.
• Sezzle: Sezzle is a U.S.-based BNPL provider that has gained popularity, particularly among younger consumers. The service enables users to break down payments into four interest-free installments, which has resonated with its demographic, especially Millennials and Gen Z. Sezzle works with thousands of merchants and has established a robust user base, offering a flexible and user-friendly alternative to traditional credit options.
• Perpay Inc.: Perpay operates uniquely in the BNPL market by offering installment payments linked to consumers’ paychecks. This model provides access to credit without the need for credit checks, appealing to individuals with less traditional credit histories. Perpay partners with large retailers and focuses on financial inclusion, offering its services to a wide range of consumers, particularly those looking for straightforward payment plans based on their income.

North America Travel Now Pay Later Services Market

North America Dominating Travel Now Pay Later Services Market with Largest Share of 60.4% in 2023

The Travel Now Pay Later (TNPL) services market in North America continues to lead globally, capturing a dominant market share of 60.4% in 2023, valued at approximately USD 27.8 billion. This significant share is driven by the region’s advanced financial infrastructure, high consumer adoption of flexible payment solutions, and the robust growth of e-commerce platforms that integrate TNPL services.

The presence of key market players, as well as a favorable regulatory environment, further bolsters market expansion in North America. The rising preference for deferred payments, particularly among millennial and Gen Z travelers, along with increased partnerships between travel providers and BNPL platforms, has contributed to the region’s strong performance. Additionally, the growing trend of experiential travel, where consumers are more willing to make large bookings and pay later, has further accelerated the adoption of TNPL services across the region.

In the coming years, North America is expected to maintain its leading position, driven by ongoing innovations in fintech and payment technologies, as well as the continued shift toward digital-first travel solutions. Given the region’s relatively high purchasing power and increasing consumer confidence in alternative payment methods, North America is projected to remain the primary growth engine for the TNPL services market globally.

Recent Developments

• In October 2024, Travel Leaders Network, the leading network for travel advisors in North America, earned recognition as one of the “Most Reliable Companies for 2025” by Newsweek, in collaboration with Statista. Ranked 203rd on the list, the company joins prominent names like Microsoft and T-Mobile. The rankings were determined through surveys of over 1,700 business decision-makers, evaluating key factors such as dependability, ease of business, and customer satisfaction.
• In 2024, Zilch, a UK-based fintech company known for its “Buy Now, Pay Later” services, introduced a new payment option that allows users to spread payments over three months with no interest. The product, which is initially available to 100,000 customers, is aimed at offering greater financial flexibility for larger purchases. Zilch plans to extend this feature to its full user base of over 3.6 million customers by April 2024.
• In 2024, Shoplazza, an eCommerce platform serving merchants in the U.S., entered into a partnership with Sezzle to provide flexible payment options like “Buy Now, Pay Later.” This collaboration allows Shoplazza merchants to offer installment payment plans through Sezzle, meeting increasing consumer demand for alternative payment methods, such as the Pay in 4 and Pay in 2 plans offered by WebBank.

Conclusion

The Travel Now Pay Later (TNPL) services market is poised for significant growth, driven by changing consumer preferences for flexible payment options and the ongoing digital transformation within the travel industry. As consumers, particularly younger generations, continue to seek more convenient and affordable ways to manage their travel expenses, TNPL services are becoming an increasingly attractive solution.

The expansion of these services across various travel sectors airlines, accommodations, vacation packages, and experiences along with broader adoption in emerging markets, presents a wealth of opportunities for stakeholders. However, challenges such as potential financial risks, regulatory hurdles, and consumer education remain key areas to address. With the right strategic partnerships and continued innovation, TNPL services are expected to play a pivotal role in reshaping the future of travel financing, offering greater accessibility and affordability for travelers globally.

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