Research by Butter, the UK’s only Buy Now Pay Later (BNPL) travel agency, suggests the BNPL approach could help rejuvenate a pandemic-weary tourism sector, allowing holidaymakers to overcome the financial uncertainty caused by Covid by spreading the cost of their holiday via more manageable monthly instalments.
Irritated by the lack of flexible payment options whilst planning a holiday, co-founders Timothy Davis, Stefan Hobl and Nik Haukohl were inspired to build the UK’s first buy now pay later travel agency back in 2017, enabling travellers to spread the cost of travel arrangements over time, with full payment not due until after the trip.
While the BNPL approach has been around for some time, research by Butter shows that the ability to pay for holidays in such a way could help boost the tourism industry over the coming months.
In fact, the figures show that 78% of holidaymakers stated that spreading the cost would make them more likely to book a holiday this year.
Butter’s research also shows the ability to better manage their income is the driving factor behind a lift in consumer confidence when spreading the cost of their purchase.
35% said that the BNPL approach allowed them to maximise their income on a monthly basis while still securing the purchasethey had planned. This means holidaymakers are able to secure some summer sun without having to pay out large deposits or upfront costs in order to do so, leaving them with enough money in their back pocket to cover the rest of their monthly outgoings.
A further 27% were able to make the purchase as they didn’t have the money at the time of transacting, allowing them to book without fear of prices increasing further down the line.
23% also said the BNPL approach allowed them to purchase a more expensive product than they might have otherwise if they weren’t spreading the cost, meaning they could improve the quality of their holiday without impacting the affordability of their trip away.
Timothy Davis, Co-Founder and CEO of Butter, commented:
“Opting for a BNPL travel agent could be the answer for holidaymakers who aren’t confident in committing to a big-ticket purchase in the current climate, as it allows them to spread the cost over a number of months and even after they’ve travelled.
As well as this greater convenience and financial empowerment it also minimises the risk of booking a holiday to a much larger degree.
Not only are many travel agents providing Covid protection to help boost consumer confidence, but doing so with a BNPL travel agency such as Butter provides the additional safety net of Section 75 protection. So if you do book a holiday and the airline or hotel is unable to fulfil their side of the bargain, you should be able to receive a full refund on the money paid.
Our goal at Butter has always been to provide consumers with this simple and responsible alternative to credit cards and loans, while at the same time incorporating the expertise and protection you would expect from your travel agent.
The combination of our pedigree within the travel sector and a transparent approach to lending enables holidaymakers to budget and spend intelligently, and in a manner that suits their individual financial needs.”