Buy Now Pay Later case study: CoralTree Hospitality
Increase order values
Allow guests to book their stay and spread the cost over time, making it easier for them to commit to reservations. For hoteliers, offering BNPL can increase booking conversions, attract a wider audience, and boost guest satisfaction.
CoralTree Hospitality embraces ‘Buy Now Pay Later’ solution to enhance guest experience
Jon Lazarus, Director of Distribution, and his team at CoralTree Hospitality in Englewood, CO, identified a growing need for BNPL solutions to better serve hotel guests. BNPL solutions allow businesses to receive full payment upfront while offering customers the flexibility to pay in monthly installments. The BNPL provider finances the transaction, handling the installment payments directly with the customer, so the business doesn’t have to manage the process. In return, the customer pays interest to the BNPL provider, similar to the terms of a loan or credit card.
“In today’s economic climate,” Lazarus explains, “travelers must consider not only lodging costs but also expenses for airfare, activities, dining, and transportation. With properties in high-cost destinations like Hawaii and Colorado, we saw BNPL as a way to help guests plan the vacations they’ve dreamed of while easing financial burdens.”
Breakthrough for the hospitality industry
While BNPL has seen widespread adoption in eCommerce, the hospitality sector faces its own unique operational challenges. Recognizing this, Lazarus and CoralTree’s leadership sought the right partners to make their BNPL vision a reality.
“There are several BNPL options available, but it was vital for us to receive timely notifications and clearly identify when payments were made through the BNPL solution to avoid operational disruptions,” Lazarus notes.
“Integration with our existing SynXis systems was non-negotiable, as all bookings had to be managed within our PMS. Additionally, we needed an API solution that wouldn’t slow down our booking engine or website.”
Together, Sabre’s SynXis Booking Engine team and Flex Pay collaborated to meet CoralTree’s needs. Lazarus and his team eagerly participated in the beta testing phase during the summer of 2024.
BNPL enhances guest spending across diverse property types
Since the Flex Pay beta launch with Sabre, CoralTree saw a 15% increase in average order value compared to non-BNPL bookings. This significant uptake was seen across all property types, including urban locations, rather than just the anticipated luxury resorts. The group also believes the BNPL option is encouraging travelers to book higher-tier rooms than they might have otherwise chosen.
The BNPL solution has provided a significant financial advantage by boosting both revenue and cash flow, as Flex Pay payments are made in full upfront. “We’ve seen a notable increase in revenue from Flex Pay bookings—revenue that might not have materialized without BNPL.” adds Lazarus.
A beneficial solution for California’s new laws
The integration also simplifies compliance with California’s new resort fee cancellation laws, which took effect on July 1, 2024. The law requires California properties to offer full refunds within 24 hours of booking to guests who request them.
“For our California properties, Flex Pay makes this process straightforward. If a guest cancels within the 24-hour grace period, we simply refund the Flex Pay virtual credit card, and Flex Pay handles the refund to the guest. It’s simple.” Lazarus explains.
As travel seasons approach at different times across the globe, CoralTree is eager to see how BNPL will impact bookings in key destinations like Hawaii. “With the positive results we’ve seen so far, we’re excited to see how BNPL influences travel patterns in the upcoming season,” Lazarus concludes.
