Representatives from the online travel agency answer questions, and operators raise concerns.
Earlier this week, TripAdvisor launched a new feature enabling travelers seeking tours, activities and attractions to book without paying up front, causing many operators to wonder how “Reserve Now & Pay Later” will impact their business.
TripAdvisor says the decision to offer a delayed payment option will improve the booking experience for travelers. “Flexibility is an important factor for travelers when making a booking decision. Whether they’re a couple of weeks away from pay day; or they’re trying to stretch their budget after paying flights and hotels,” says a TripAdvisor spokesperson. “We know they don’t like feeling locked into plans, but also don’t want to miss out. As they’re researching and planning their trip, we want to help remove as many barriers to purchase—checkout options being just one of many features customers consider.”
The spokesperson adds TripAdvisor is currently testing the Reserve Now & Pay Later feature with a small group of travelers, and the data proving it will foster more bookings is too preliminary to share. TripAdvisor also says Reserve Now & Pay Later will not affect operator payments or payout schedule.
Serious Operator Concerns
However, many operators are worried the new feature will lead to more frequent last-minute cancellations.
For Eric Wichner, founder of Vallarta Eats Food Tours based in Jalisco, Mexico, the new TripAdvisor feature is concerning because his intimate food tours are capped at six people. He needs a minimum of two people to run a tour. Last-minute cancellations are tough. “If someone books eight months in advance and they hold up four tickets, a solo traveler can book that tour. If the four people pull out last minute, I will have to cancel the tour for the single traveler,” he says.
“If a tour operator hosts 500 guests a day, six cancellations isn’t a big deal. It’s different for small, mom-and-pop operators,” says Wichner, adding he believes travelers are more committed to going on an experience if their credit card payment has already been processed.
TripAdvisor says they are aware how cancellations can negatively impact operators of tours, activities, attractions, events and experiences. “Over the coming months, we’ll be working with operators and closely monitoring conversion and cancellation metrics to inform how we iterate and scale the feature,” says the spokesperson.
The feature will start rolling out first with Viator and for travelers who book on English-language sites, including the U.S., U.K. and Australia. Reserve Now & Pay Later will soon launch for Things To Do on TripAdvisor in all languages and international sites.
While multi-day tours, products that are final sale or products that require an operator to manually accept bookings are not eligible for Reserve Now & Pay Later, operators cannot opt-out.