How To Offer Finance For Holidays

What holiday finance can do for your margin and momentum

Offering customer finance for holidays means giving people a structured way to spread the cost of a trip across manageable repayments, rather than relying on savings or an expensive, unplanned credit-card balance. For a travel business, it is less about “discounting” and more about improving affordability at the point where intent is highest. With UK consumers spending heavily on travel and many planning higher-value breaks, finance can help you protect conversion rates, increase average booking values, and reduce drop-off when customers reach the payment page. Done properly, it also supports clearer budgeting for customers because repayments, interest, and term are laid out upfront.

Why travellers are increasingly paying with credit

Holiday spending remains resilient in the UK, including tens of billions spent on overseas trips in 2025, and a large share of adults plan a holiday each year. At the same time, a meaningful minority are already funding holidays using credit products such as credit cards and BNPL, with some people even still paying off last year’s trip. This pattern is particularly pronounced among younger adults and in certain regions, and parents face an added pinch when the average family holiday can run into the low thousands. When prices rise and deposits are due months before departure, finance becomes less a luxury and more a way to keep plans realistic without draining savings in one hit.

How finance at checkout lifts conversion and basket size

Finance reduces the “sticker shock” moment by reframing one large payment into a transparent monthly figure. That single change can make upgrades feel achievable: a longer stay, all-inclusive, better room types, or additional experiences. Research into holiday borrowing suggests many borrowers use loans specifically to extend trips or upgrade the package, which aligns with how travel businesses grow revenue without chasing new customers. Finance also supports earlier commitment: demand for holiday loans tends to peak in autumn and winter when people plan ahead for summer, making it a strategic lever for smoothing seasonality.

Understanding APR isn’t just about percentages - it’s about knowing what you’ll pay in real terms. The best finance offers make total cost and repayment schedules easy to compare.

Standout line: If customers already use credit informally, offering a clear, regulated option can be the more responsible alternative.

Typical transaction values (and what finance can cover)

What you can put on finance

1. Package holidays (flight + hotel)

2. Accommodation-only bookings

3. Deposits and balances (where the lender supports split payments)

4. All-inclusive upgrades and room upgrades

5. Extra nights or itinerary extensions

6. Airport parking, transfers, and car hire

7. Luggage, seat selection, and ancillary fees

8. Excursions and experiences

9. Travel insurance or protection add-ons (where available)

FCA and compliance: the non-negotiables

Holiday finance promotions must be clear, fair and not misleading, with the right risk warnings and representative examples where required. Your team should avoid implying guaranteed acceptance and should present key terms, including APR, total amount payable and term, in a way customers can understand before applying. Data handling must follow UK GDPR, and you should only introduce customers to a lender or broker through approved, compliant journeys and wording. If you are not authorised, the right permissions and exemptions must be in place.

Broker and introducer models, explained simply

Most travel firms do not want the operational burden of becoming a lender, underwriting credit risk, or building regulated credit infrastructure. That is where an introducer model can work well: you introduce the customer to a broker such as Kandoo, and the broker facilitates access to suitable lenders and manages the regulated aspects of the credit application journey. In practice, you keep control of the booking experience while the finance element is handled through a compliant pathway, with eligibility checks, lender decisions, and documentation managed appropriately. It is a practical route for SMEs because it can be integrated into your checkout and supported with compliant marketing materials.

A clear customer journey you can map to your checkout

1. Customer builds their holiday basket (trip, passengers, dates, add-ons).

2. Finance option is shown early on key pages (product page and basket), not only at payment.

3. Customer selects “Pay monthly” and reviews an example (term, APR, estimated monthly cost).

4. Identity and affordability checks begin within the broker or lender flow.

5. Decision is returned (approved, referred, or declined) with transparent next steps.

6. Customer e-signs the agreement and receives documentation.

7. Booking is confirmed and your business receives the payment as per the agreed commercial model.

8. Aftercare triggers (payment reminders, documentation, support contacts) are issued through the appropriate parties.

Next-step suggestions:

• Add a monthly-cost indicator on your top-selling packages to test uplift.

• Promote finance hardest during October, November and January when planning and borrowing demand often rises.

• Consider offering optional protection add-ons, especially for higher-value trips where cancellations can be costly.

Getting live with Kandoo

Kandoo helps UK travel businesses offer customer finance in a way that is straightforward for the customer and workable for your team. The starting point is clarifying your average booking values, seasonality, and how you take payment today (deposit only or full basket). From there, we help you choose a finance approach that fits your customer profile, support you with compliant on-site messaging, and guide you through the practical integration so the finance option appears naturally within your booking journey. The goal is simple: reduce payment friction at checkout, keep your brand experience intact, and give customers a clear, responsible way to pay over time.

FAQs

Q: Is holiday finance the same as BNPL?
A: Not always. BNPL typically refers to shorter-term, often interest-free instalments, while holiday finance can include longer-term fixed credit with an APR and a clear total amount payable.

Q: Will offering finance increase my conversion rate?
A: It often helps, particularly on higher-value baskets, because customers can compare affordability in monthly terms rather than absorbing the full cost upfront.

Q: What trip values work best for finance?
A: Finance tends to have the biggest impact where bookings run into the thousands, such as family holidays and long-haul travel, but it can also reduce drop-off on mid-range city breaks.

Q: Can customers finance add-ons like insurance or excursions?
A: In many setups, yes. Financing the full basket can increase average order value and simplify payment, but it must be presented clearly and responsibly.

Q: Do I need to be FCA authorised to offer finance?
A: Not necessarily. Many travel firms operate as introducers, passing customers to an authorised broker or lender through an approved journey. The right permissions and processes matter.

Q: When should I promote holiday finance most heavily?
A: Demand often rises when customers plan ahead for summer, commonly in autumn and winter. Align finance messaging with your peak enquiry and booking periods.

Q: How do I talk about APR without confusing customers?
A: Keep it practical: show the monthly payment, term, APR, and total amount payable together, and avoid vague claims like “cheap” or “guaranteed approval”.

Q: Does offering finance mean encouraging people into debt?
A: It should not. Done correctly, it provides a transparent, regulated way to budget, which can be safer than relying on unplanned credit or overdrafts.