Vrbo Launches Reserve Now, Pay Later to Rival Airbnb
Vrbo introduces a Reserve Now, Pay Later feature allowing travelers to book vacation rentals with no upfront payment, featuring host-friendly terms.
Stock photo for illustration only, not from the actual event
- Vrbo has launched its new Reserve Now, Pay Later booking feature.
- The policy charges cards before the free cancellation window closes.
- The feature is currently live on the website and coming to the app.
- It is part of Expedia Group's fall release of over 30 new features.
Vrbo, operating under Expedia Group, has rolled out a new feature allowing travelers to reserve eligible vacation rentals without putting down any money at the time of booking. This move mirrors a strategy previously adopted by its competitor Airbnb, which has credited similar payment options with driving substantial business growth since its launch last year.
The Reserve Now, Pay Later option is introduced as part of Expedia Group's comprehensive fall product release, encompassing more than 30 new and enhanced features across Expedia, Hotels.com, and Vrbo. According to the company, these additions are designed to help group trip organizers confirm attendees, collect contributions, and better manage overall stay costs.
Stock photo for illustration only, not from the actual event
The feature is already operational on Vrbo's website and will expand to the mobile application over the upcoming weeks. Meanwhile, Airbnb launched its version for U.S. domestic stays in August 2025 before expanding globally in February, offering it on listings with flexible, moderate, limited, or firm cancellation policies while charging guests the full amount seven days before the free cancellation window closes.
The introduction of pay-later models in short-term rentals highlights an ongoing industry effort to lower booking barriers for consumers. However, the distinct policy differences between Vrbo and Airbnb illustrate a fundamental trade-off: while Airbnb prioritizes guest flexibility—which subsequently impacts cash flow and slightly raises cancellation rates—Vrbo implements a more host-conscious approach by locking in payments earlier relative to the cancellation deadlines.
A key distinction in Vrbo's approach is its host-friendly mechanism, which charges the card on file seven days before the host's free cancellation window closes—potentially 30 or 60 days out—rather than Airbnb's window, which can occur as close as 24 hours before arrival. Airbnb previously reported that adoption of its feature exceeded 70% of eligible bookings, shifting demand toward larger homes with four or more bedrooms and raising average daily rates, though cancellation rates rose by about one percentage point to roughly 17% and delayed cash collection impacted working capital.
Beyond the payment update, the broader product release focuses on families and complex itineraries, including multi-room bookings, flexible multi-city packages, a conversational Activity Planner, One Key lounge access for flight delays exceeding 90 minutes, and AI-driven tools for property Q&A, natural language search, and voice support.
Source: Skift
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