Can't Afford a Vacation? Try Layaway

(MoneyWatch)  Layaway isn't just for discount retailers anymore. Layaway, essentially a low-payment installment plan offered by merchants with added fees and/or interest, is now gaining momentum in the travel industry.

Hyatt Hotels and Resorts recently partnered with eLayaway, a Florida-based Web site which offers all kinds of merchandise that can be purchased on layaway, including gift cards and checks for Hyatt stays. While similar installment plans have been used in travel agencies for years, this may be the biggest public rollout and first online venture to use it to sell vacations. N2 Vacations Travel Agency, a Missouri-based company, is the only other travel member on the site so far.

Michael Bilello, senior vice president of business development for eLayaway, said the Web site's customers grew to 75,000 and the company is already in talks with other hotels, cruise and airline companies to expand travel offerings next year.

One cruise line that may get in on the action is Holland America Line, which just announced its "Vacation Stimulus Plan," that sounds a lot like layaway. You be the judge:

• Deposits reduced by 50 percent on cruises or Alaska cruise tours (departing on or after May 1, 2009)
• 25 percent savings on standard cancellation plan (on or after May 1, 2009)
• Suspended fuel supplements for cruises (departing on or after Dec. 17, 2008)

(Aside from the suspended fuel supplement which they reported previously, the rest are new.) This means travelers come in with less cash -- a common reduced deposit of $350 now falls to $175. Aside from the reduced-price installment plan, Holland America shares at least one tenet with layaway -- commitment. If a customer cancels 75 days or less before the start of a trip, that customer loses his or her deposit.

eLayaway also charges a 1.9 percent service fee and a $25 cancellation fee if a customer stops making payments. Travel agencies also charge $50 to $100 fees on cancelled trips.

It's interesting that some companies are making a concerted effort to woo customers by easing one of their big fears -- spending money. By making several small payments on a big ticket trip, a consumer can reduce anxiety by paying only what he or she can afford at the time.

It's only a matter of time before more online travel sites offer layaway and tap into the emerging market.