Consumers are ready to travel over the next twelve months, according to a new study commissioned by Amadeus. Using a panel of 4,500 consumers from France, Germany, UK, US, and Singapore, the study examined discretionary spend preferences over the next 12 months with international travel (43%) ranking the highest priority, outpacing online subscriptions (38%) and domestic travel (35%).

The study found that those traveling from the U. S. expect to spend $3,268 on international travel over the next 12 months.

Of interest to us, however, is how consumers are expecting to pay for their travel. Is BNPL an option? The study found that a whopping 84% of consumers indicated they were more likely to use an installment option such as “Buy Now, Pay Later” (BNPL) to pay for their trip. Popular travel sites such as Carnival and Expedia offer Buy Now, Pay Later solutions at the checkout page, enabling consumers to split their payments over a fixed period of time.

Klarna is working with suppliers such as Expedia. com and Booking. com while Affirm is currently partnering with providers such as Delta Vacation, Priceline, and StubHub.

Uplift, a BNPL vendor specializing in travel, is partnering with 140+ travel partners. BNPL options typically allow consumers to extend the life of the loan longer than on a credit card, but at the cost of reduced rewards, if any. We were not surprised to see the uptick in BNPL usage for travel, especially given how hot the BNPL industry is currently, but with a possible recession brewing, BNPL providers will be taking on heightened levels of risk in an already risky business.

For more of our thoughts about BNPL, please see the following resources from our analyst team:BNPL: Was It All a Dream? Wake Up and Smell the Coffee Overview by Ben Danner, Research Analyst at Mercator Advisory Group

By Ben Danner
Aug 05, 2022 00:00
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