The news: Surging interest in installment loans for travel could reshape how travelers finance vacations, per The Wall Street Journal.

Why this matters: US consumers have pulled back on spending for travel in the face of an uncertain economic climate. Delta’s main ticket sales, for example, fell 5% YoY in Q2. 

Buy now, pay later (BNPL) financing could help reverse sluggish travel trends among the non-wealthy if consumers found installment loans to be more accessible and less risky than placing bookings on revolving credit. 

Affirm’s ideal ticket: The ticket size of various travel purchases—airfare, lodging, excursion packages—sits right in the pocket of the kind of purchases Affirm wants to snag: too large to comfortably pay off on a monthly credit card bill but too small to justify a personal loan. 

The provider has made inroads in other big-ticket arenas, like home repairs. A similar merchant partnership with a travel provider could help Affirm gain an extra foothold in the industry. With US digital travel sales anticipated to crack $313.7 billion this year, per our forecast—working more closely with airlines and travel portals like Expedia could help BNLP forms capture more of this volume.

Our take: One-fifth of US summer travelers already plan to finance trips with BNPL, per a survey by NerdWallet. And 42% of Gen Zers and millennials have used BNPL services—double the rate of their elder peers, per a J.D. Power survey. If BNPL providers lean into more partnerships with travel platforms, both parties can benefit from increased payment volume and ticket sales for the holiday season.

This content is part of EMARKETER’s subscription Briefings, where we pair daily updates with data and analysis from forecasts and research reports. Our Briefings prepare you to start your day informed, to provide critical insights in an important meeting, and to understand the context of what’s happening in your industry. Non-clients can click here to get a demo of our full platform and coverage.