Global Travel Now Pay Later Services Market By Type (Leisure, Business, Adventure, Family Travel, and Other Types), By Destination, By Payment Plan, By Distribution Channel, By Region and Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends, and Forecast 2023-2032
- Published date: Sep 2023
- Report ID: 102848
- Number of Pages: 254
The Global Travel Now Pay Later Services Market size is expected to be worth around USD 89.7 Billion by 2032 from USD 42.74 Billion in 2022, growing at a CAGR of 7.90% during the forecast period from 2023 to 2032.
Travel now pay later services are financing options that enable travelers to book and pay for their trips over time, rather than all at once. These have become increasingly popular in recent years as they make traveling more accessible for those who may not have the capacity to cover all costs at once.
Travel now pay later services are available from various sources, such as third-party companies that specialize in travel financing and airlines and hotels that provide their financing programs.
Rising Demand For Fintech Solutions Drives the Market Growth During Forecasted Period.
Many consumers prefer the option to pay for their travel expenses over time, rather than all at once. This helps them better manage their finances and budget accordingly. Travel can be costly. Financing options like travel now and pay later services make it more accessible for many consumers, enabling them to travel more frequently or to more costly destinations.
The growth of digital payment platforms such as PayPal and Klarna has made it simpler for consumers to access financing options for travel bookings. Fintech companies are taking advantage of technology by offering creative financing options like travel loans and installment plans. Furthermore, as the global middle class continues to expand, more people are traveling than ever before – creating a larger demand for travel now, pay later services.
The Interest Rates Charges Make Travelling Costly
Many travelers now, pay later services charge interest rates and fees that can add up over time, making travel more costly for consumers. Some may be deterred by these costs and opt for alternative payment methods instead.
Travel now, pay later services typically require consumers to undergo a credit check before the approval of financing. Individuals with low credit scores may not qualify for these options, restricting the market size. The travel now, pay later services market is becoming more and more crowded with fintech companies and traditional financial institutions entering the space. This could result in pricing pressure and lower profit margins for companies operating within this space.
In many countries, travel now, pay later services are subject to regulation which could limit their expansion. Economic downturns can impact consumer spending and make it more challenging for companies offering these services to attract customers. Furthermore, economic uncertainty increases the risk of default for these services, leading to higher default rates and losses for companies operating within this space.
The Partnership with Aligned Service Providers will boost the Market Demand and Consumer Experience.
The travel now pay later services market is expanding globally. Companies that succeed in expanding into new markets will have the potential to capture a larger share of this global pie. By partnering with airlines, hotels, and other travel providers, travel now, pay later services can offer consumers an easier booking experience.
These collaborations also give companies access to a larger customer base by integrating with popular digital payment platforms like PayPal or Apple Pay; travelers using these platforms already for financial transactions can benefit from these offerings as well.
In addition to financing and installment plans, travel now, and pay later services can offer value-added features like travel insurance, concierge services, and loyalty programs. These features help companies stand out from competitors and attract new customers.
Integrated Travel Now Pay Later Services make it Simpler for Consumers to Access Financing Options.
The travel now pay later services market has been revolutionized by fintech companies that use technology to provide consumers with innovative financing options. These companies are using artificial intelligence, big data analytics, and other technologies to simplify the lending process and offer personalized financing options to consumers.
Many travel booking platforms are now offering integrated travel, pay later services to make it simpler for consumers to access financing options while booking their trip. This trend is expected to continue as more companies strive to provide customers with a streamlined and convenient booking experience.
With consumer debt concerns on the rise, many travelers now, pay later services companies are emphasizing responsible lending practices such as providing customers with transparent terms and conditions and financial education resources. Some travel now, pay later services companies are providing subscription-based models that enable consumers to pay a monthly fee in exchange for discounted travel packages and other perks.
The Leisure Segment Holds the Majority of the Market Share during the Forecasted Period.
Based on type, the market for travel now pay later services is segmented into leisure, business, adventure, family travel, and other types. Among these types, the leisure segment is the most lucrative in the global travel now-pay-later services market, with a projected CAGR of 7.9%. The total revenue share of leisure-type travel now pay later services is 55% in 2022.
Leisure travel encompasses a range of activities like vacations, weekend getaways, family trips, and solo travel. It can also encompass adventure travel, cultural travel, and other forms of segmentation within travel.
Leisure travel often stems from personal interests, hobbies, and preferences and caters to various age groups, lifestyles, and budgets. Its estimated market share was 20.0% in 2022, followed by business type. Business travelers usually travel for work-related purposes, such as attending conferences, meetings, or training sessions. Business travelers may also need to travel for sales purposes, negotiations, or other job-related tasks.
The International Destination is the Most Significant Segment in the Global Travel Now Pay Later Services Market.
By destination, the market is further divided into domestic and international. The international segment is estimated to be the most lucrative segment in the global travel now-pay-later services market, with a market share of 65% in 2022.
International travel is an integral component of the global economy, having a major effect on sectors like tourism, airlines, and hospitality services. Also, the domestic segment is estimated to account for a revenue share of 35%. Domestic travel also plays an important role in supporting local economies while encouraging regional tourism.
Payment Plan Analysis
The Installment Plan Segment is Dominant.
By payment plan, the market is further divided into an installment plan, deferred payment plan, and other payment plans. Among these payment plans, the installment plan segment is estimated to be the most lucrative segment in the global travel now-pay-later services market, with a market share of 52% in 2022.
Installment plans in travel and tourism refer to payment arrangements that enable customers to pay their expenses in installments over time, rather than having to pay the full amount upfront. Installment plans can help travel companies increase sales and revenues by making products and services more accessible to a wider range of customers. Also, Deferred payment plans usually involve making a partial deposit upfront and deferring the remainder to a later date.
Distribution Channel Analysis
The Travel Agencies Segment is Dominant during the Forecasted Period.
Based on distribution channels, the market is segmented into travel agencies, airlines, hotels, tour operators, and other distribution channels. Among these distribution channels, the travel agencies segment is estimated to be the most lucrative segment in the global travel now-pay-later services market, with the largest revenue share of over 33% during the forecast period.
Travel agencies are businesses that specialize in offering customers travel-related services such as advice and recommendations, bookings, insurance, documentation, and package deals. However, Airlines play an integral role in the travel and tourism industry, providing transport to get travelers to their desired locations and is also anticipated to grow at a steady CAGR over the forecast period.
Key Market Segments
Based on Type
- Family Travel
- Other Types
Based on Destination
Based on the Payment Plan
- Installment Plan
- Deferred Payment Plan
- Other Payment Plans
Based on the Distribution Channel
- Travel Agencies
- Tour Operators
- Other Distribution Channel
COVID-19 Impact Analysis
The COVID-19 pandemic has had an uneventful effect on the travel now, pay later services market. With travel restrictions and border closures in many countries, travel has significantly declined. Due to the pandemic, traveling activities have decreased because of strict lockdowns all over the world. Many who had previously made plans have had to cancel them due to the crisis.
Due to the pandemic, many consumers have experienced financial strain, leading to an uptick in cancellations and refunds – potentially costly for travel now, pay later services companies. With many experiencing hardship due to this crisis, there has been an uptick in defaults on travel now, pay later services. This has resulted in higher losses for companies operating within the market.
Furthermore, the pandemic has caused a shift in consumer behavior with many seeking more flexible and cancelable travel options. Due to concerns over COVID-19 spreading, travel now, pay later services that offer flexible payment and cancellation options have seen an uptick in demand.
North America Region Holds Largest Market Share in Global Travel Now Pay Later Services Market.
North America is estimated to be the most lucrative market in the global travel now-pay-later services market, with the largest market share of 60%, and is expected to register a CAGR of 7.9% during the forecast period. However, Europe’s travel now pay later services market is projected to be valued at USD 8.5 Bn, with a revenue share of 21% in 2022, and register a CAGR of 9.5% from 2022 to 2032.
In North America, Fintech companies are taking advantage of technology by offering creative financing options like travel loans and installment plans. This is partly due to North America’s high disposable income and the availability of online travel agencies as well as direct booking options. As such, the market for travel now-pay-later services is anticipated to grow.
Furthermore, Europe is also a prime market for travel now pay-later services, with several providers providing flexible payment plans for bookings. This trend is especially prevalent in the United Kingdom where deferred payment plans are commonplace when booking flights and holiday packages.
Key Regions and Countries Covered in this Report
- North America
- The US
- Western Europe
- The UK
- Rest of Western Europe
- Eastern Europe
- The Czech Republic
- Rest of Eastern Europe
- South Korea
- Australia & New Zealand
- Rest of APAC
- Latin America
- Costa Rica
- Rest of Latin America
- Middle East & Africa
- Saudi Arabia
- South Africa
- United Arab Emirates
- Rest of MEA
Emerging key players are focused on a variety of strategic policies to develop their respective businesses in foreign markets. Several pay-later services companies are concentrating on expanding their existing operations and R&D facilities.
Furthermore, businesses in the travel now-pay-later services market are developing new payment methods and reliable financing options through innovation. In addition, several key players are now focusing on different marketing strategies such as spreading awareness about transparent terms and conditions and financial education resources, which is boosting the target products’ growth.
Market Key Players
Listed below are some of the most prominent travel now pays later services, industry players.
- PayPal Holdings, Inc.
- Perpay Inc.
- Quadpay, Inc.
- Other Key Players
- In 2022, Splitit, a merchant-branded installments-as-a-service platform, raised private placement capital to expand into underserved verticals. Their solution not only simplifies checkout for consumers but also offers merchant partners an uncompromised merchant-branded experience.
- In 2021, Afterpay, the global BNPL platform that pioneered ‘buy now and pay later (BNPL), will help Square to accelerate its strategic priorities for its Cash App and Seller ecosystems. Square will integrate Afterpay into its Cash App and Seller business units. This will allow even the smallest merchants to offer BNPL at check out, give Afterpay customers the ability to manage their installments directly in Cash App, as well as give Cash App customers access to merchants and BNPL deals directly within the app.
Report Features Description Market Value (2022) USD 42.7 Bn Forecast Revenue (2032) USD 90 Bn CAGR (2023-2032) 7.9% Base Year for Estimation 2022 Historic Period 2016-2022 Forecast Period 2023-2032 Report Coverage Revenue Forecast, Market Dynamics, COVID-19 Impact, Competitive Landscape, Recent Developments Segments Covered By Type (Leisure, Business, Adventure, Family Travel, and Other Types), By Destination (Domestic and International), By Payment Plan( Installment Plan, Deferred Payment Plan, and Other Payment Plans), By Distribution Channel (Travel Agencies, Airlines, Hotels, Tour Operators, and Other Distribution Channels) Regional Analysis North America – The US, Canada, & Mexico; Western Europe – Germany, France, The UK, Spain, Italy, Portugal, Ireland, Austria, Switzerland, Benelux, Nordic, & Rest of Western Europe; Eastern Europe – Russia, Poland, The Czech Republic, Greece, & Rest of Eastern Europe; APAC – China, Japan, South Korea, India, Australia & New Zealand, Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam, & Rest of APAC; Latin America – Brazil, Colombia, Chile, Argentina, Costa Rica, & Rest of Latin America; Middle East & Africa – Algeria, Egypt, Israel, Kuwait, Nigeria, Saudi Arabia, South Africa, Turkey, United Arab Emirates, & Rest of MEA Competitive Landscape Afterpay, PayPal Holdings, Inc., Splitit, Sezzle, Perpay Inc., Openpay, Quadpay, Inc., LatitudePay, and Other Key Players Customization Scope Customization for segments, region/country-level will be provided. Moreover, additional customization can be done based on the requirements. Purchase Options We have three licenses to opt for Single User License, Multi-User License (Up to 5 Users), Corporate Use License (Unlimited User and Printable PDF)
Frequently Asked Questions (FAQ)How big is the travel now pays later services market?
The global travel now pays later services market was valued at an estimated amount of USD 42.7 Bn in 2022 and will reach USD 90 Bn by 2032What is travel now pays later services market?
Travel now pays later services market has financing options that allow travelers to book and pay for their trips over time, rather than upfront.Why have travel now pays later services become popular?
Travel now pays later services have gained popularity as they make travel more accessible for those who may not have the capacity to cover all costs at once.What are the types of travel now pays later services?
The travel now pays later services market includes leisure, business, adventure, family travel, and other types of financing options.What are the key distribution channels in the travel now pays later services market?
The key distribution channels in the market include travel agencies, online travel agencies, direct booking options, and more.Which type holds the majority market share in the travel now pays later services market?
The leisure segment holds the majority market share in the travel now pays later services market.What are the drivers of growth in the travel now pays later services market?
The growing demand for fintech solutions and the increasing accessibility of travel financing options are driving the growth of the market.How do fintech companies contribute to the travel now pays later services market?
Fintech companies have revolutionized the market by using technology to provide innovative financing options and streamline the lending process.Which region holds the largest market share in the global travel now pays later services market?
North America is estimated to hold the largest market share in the global travel now pays later services market.Which key players dominate the travel now pays later services market?
Some of the prominent key players in the market include Afterpay, PayPal Holdings, Inc., Splitit, Sezzle, Perpay Inc., Openpay, Quadpay, Inc., LatitudePay, and others.
- PayPal Holdings, Inc.
- Perpay Inc.
- Quadpay, Inc.
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