“Travel in installments” is an attractive product with deferred financial burdens

Dealers said that the “travel in installments” option attracted them at first, due to the flexibility and ease it provides in planning trips and vacations. However, their practical experiences revealed unexpected financial challenges, represented by the overlap of installments with monthly obligations, and the appearance of additional fees upon modification or cancellation, which made some of them feel financial pressure and re-evaluate the feasibility of relying on this type of travel product in the future.

Traders presented to Emirates Today their personal experiences, pointing out that the demand for this option is often motivated by income stability, or the desire to benefit from travel offers, in addition to the desire to provide a financial balance in cash for vacation expenses.

They explained that changing financial circumstances or not calculating subsequent expenses accurately may turn the experience from a comfortable solution into a long-term burden, stressing that advance planning and setting a clear payment plan are essential factors to avoid falling into financial pressure after the end of the trip.

For their part, travel and economic experts said that the demand for travel plans in installments is witnessing remarkable growth in the current period, especially among young travelers and those with middle incomes, driven by the emergence of many new financing products in the market.

They explained to “Emirates Today” that the concept of travel in installments may not be suitable for all travelers, warning that travel, despite being a means of rest and recreation, may turn into a financial burden for some individuals. They stressed the importance of balancing the desire to travel and financial ability, calling on travelers to make deliberate decisions that guarantee them a comfortable travel experience without negatively affecting their financial stability in the long term, and not to travel by borrowing or accumulating debt, because this carries deferred risks known in economics as “cumulative risks,” which contribute to poor financial planning in the long term.

Banks operating in the local market, in addition to financial companies and travel applications, provide many products that allow customers to book trips and vacations, with the feature of paying in installments through specific payments extending from three to six months.

Some products set a minimum spending limit, as a condition for obtaining the installment offer, with fees for subscription and processing the request, while the one-time processing fee ranges between 1 and 2% of the total amount according to the financial product that is chosen, or they set a fixed amount that is determined, and in the event of not being able to pay on time, a late fee is imposed according to the service provider.

An experience that will not be repeated

The customer (Umm Ahmed) told Emirates Today: “I decided to travel with my family using the option (travel in installments), given that the financial situation was stable at the time, and I had the ability to pay later. However, some time after we returned from travel, a family member suffered a sudden health emergency, which incurred treatment costs that were not taken into account.”

Umm Ahmed added: “At that moment, the installments that I expected to pay on time became an additional burden, and I had to postpone a financial payment, which caused me financial pressure that lasted for a period of time.”

Umm Ahmed confirmed that she will not repeat this experience again, regardless of the offers and temptations related to the vacation payment mechanism. Rather, she will travel when she has the full amount allocated for the vacation without having to resort to travel products that allow for later payment.

Fees and payments

For his part, the traveler, Omar Khalil, presented his experience with traveling in installments, saying: “I arranged with my wife, after determining the travel destination and preparing the expected budget, that part of the vacation costs would be in installments. This was after we followed many of the offers offered through social media sites. So we bought travel tickets in installments through a travel application that allows this feature, and thus we paid the first installment of the total tickets, with the rest of the amount to be paid in three subsequent installments.”

He added: “The idea was basically to save the largest amount in cash, to be used for other trip expenses. Therefore, the idea seemed acceptable, and we even added to it hotel stays. The total value of the tickets exceeded 6,000 dirhams, and installments of the amount in four installments meant paying only 1,500 dirhams as a first payment, and the rest was to be paid in installments over another three months. The same applies to hotels, as the idea of ​​installments encouraged us to choose five-star hotels.”

Khalil continued: “The problem began after returning from vacation, and the due date for monthly payments, and because I made adjustments to the itinerary of the flights that I had previously booked, due to the delay in obtaining an entry visa to one of the Asian countries, this resulted in another problem related to cancellation fees or modifications to reservations, which constituted a financial loss in the value of the tickets, along with paying cancellation and modification fees for the application itself.”

Khalil said: “The idea of ​​traveling in installments may be tempting and attractive at first, but it is financially exhausting in the event of any modification to the itinerary, or cancellation of confirmed and pre-paid hotel reservations through installment applications,” adding: “I will think more than once in the future so that I do not fall into the same financial mistake.”

Loss of control

In the same context, the trader, Bashar Suleiman, said that the nature of his work makes his income fluctuate from one month to the next. Despite this, he decided to use the payment later feature to book a vacation, hoping that his financial income would improve later as a result of his work, but the following months were not good for him.

He added: “With the accumulation of daily installments and obligations, I began to suffer from financial pressures, and for a period of time I felt that I had lost control of my budget due to a hasty decision,” noting that he was able to pay later, but he does not advise repeating the experience, especially for people who are unable to bear the financial burdens later.

As for the customer, Ahmed Salem, he said that he traveled several times to keep up with the “travel trend” on short weekend vacations, noting that he used the pay later feature at frequent intervals, and did not notice that the installments would overlap with other financial obligations, which caused confusion for him, and he confirmed that this affected his ability to save. Salem added: “It is an advantage for travelers who are able to control their budgets, but it is a financial burden for others.”

For her part, the customer, Iman Al-Sayed, said that she did not calculate matters accurately before traveling, and she did not set up a payment plan in installments. She explained: “I thought the installments would be easy, but I did not set a clear plan for payment and did not calculate my other monthly obligations.”

She continued: “I began to delay paying my monthly dues, and I found myself paying additional fees and fines that significantly increased the cost of the trip, and in the end I paid more than I would have paid if I had waited and traveled when the money was available.” Al-Sayed said: “I came away from this experience with a lesson that the pleasure of traveling increases provided that you have the money to spend and not borrow.”

Financing products

In addition, the CEO of Al-Rayes Travel Company – Al-Rayes Group, Mohammed Jassim Al-Rayes, said, “The demand for travel installment plans is witnessing a remarkable growth in the current period, driven by the emergence of many new financing products in the market, which allow customers the option to pay travel costs in installments through external parties.”

Al-Rayes added to Emirates Today: “I do not encourage this type of plan,” noting that his company does not provide the “travel in installments” feature directly, but customers who wish to travel with the company and have installment arrangements through other parties can benefit from it without any obstacles.

Al-Rayes stressed that the concept of traveling in installments may not be suitable for all travelers, pointing out that travel and tourism are considered luxuries and not essentials, and therefore their costs should be dealt with with caution and financial responsibility.

He continued: “It is better for people who are unable to afford travel expenses to wait and plan to travel at a time when their financial capabilities allow it, rather than resorting to solutions that may impose additional financial obligations on them,” indicating that some travelers, especially those who travel several times during the year and follow trends and “travel trends,” may not have clear savings plans, which makes the installment option inappropriate for them, stressing that this model cannot be generalized to everyone.

Al-Rayes warned that travel, despite being a means of rest and recreation, may turn into a financial burden on some individuals, especially those who face financial difficulties, as they may find themselves facing obligations and debts that are difficult to repay later, stressing the importance of balance between the desire to travel and financial ability.

He called on travelers to make thoughtful decisions that ensure a comfortable travel experience without negatively affecting their financial stability in the long term.

Flexible payment solutions

In addition, Badr Ahli, CEO of Dubai World Travel Company, said that there is a noticeable trend towards flexible payment solutions, including “travel in installments” options, adding that the popularity of these plans is increasing, especially among young travelers and those with middle incomes who want to book their special trips without paying the full amount immediately.

He added: “Flexible payment options encourage early booking, which benefits both travelers and tour operators in managing capacity and prices,” stressing the importance of balance to benefit from these plans, including having a financial plan to repay money without difficulties.

Financial planning

In the same context, economic and investment expert, Mohamed Al-Mahri, said, “Financial planning is the first and essential step before making the decision to travel.”

He explained: “Travelling should not be done through borrowing or accumulating debt, because this carries deferred risks known in economics as (cumulative risks), which contribute to poor financial planning in the long term.”

Al-Mahri presented the best way to travel, saying: “The best way to plan travel is to save in advance, by deducting a monthly amount from the husband and wife’s income allocated for future trips, well before the travel date.”

He added, “Determining the available budget must precede choosing the destination, so that travel plans and needs are made according to the financial stock available to the individual or family,” pointing out that some travelers do not take into account their other obligations when making the decision to travel, only to find themselves later facing accumulated obligations that are difficult to manage.

Al-Mahri believed that entering the stage of borrowing turns travel from a pleasant experience into a source of stress and problems, pointing out that the experiences of many of those who traveled with loans were not happy, while those who relied on advance savings were the ones who felt most comfortable and enjoyed traveling.

He said: “If commitments overlap with the absence of any real ability to save, travel will not only be costly in terms of money, but also in terms of financial stability.”

He continued: “For those who do not have the ability to bear the cost today, it may be better for them to wait until the appropriate capabilities are available, as travel should not be a burden that haunts them after returning from vacation.”

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Different experience

The dealer, Samer Al-Khatib, was the only one whom Emirates Today met, and he presented a different experience, saying that when he decided to travel on a short vacation, he did not have the full amount allocated to spend on tickets, accommodation, and expenses, indicating that he checked his financial situation well before using the “travel in installments” feature.

Al-Khatib added: “I developed a clear payment plan, and determined the installments in proportion to my monthly income without affecting basic expenses. I also committed to paying on the specified dates, and completed the installments without any pressure or problems.”

• Travel may become a financial burden, especially for those facing financial difficulties.

• The best way to travel is to save by deducting a monthly amount from the income of the husband and wife.

• Travelers are required to make informed decisions that ensure a comfortable travel experience, without affecting their financial stability.