- Airbnb agreed to buy HotelTonight as part of the hospitality startup's push to create a more robust travel platform, the company announced. Several news outlets citing unnamed sources said the deal was valued at about $465 million — the biggest acquisition yet for Airbnb.
- HotelTonight's app helps people find last-minute hotel rooms by connecting them with vacancies in mostly urban areas. The company was founded in 2010 and raised $127 million in venture funding, per Crunchbase.
- In announcing the deal, Airbnb said the growth in bookings of boutique hotels has helped to support its core home-sharing service. About 90% of guests who first used Airbnb to book a hotel room returned to the platform for a second trip to book a home, per the company blog post.
Since its 2010 launch, HotelTonight has distinguished itself as a mobile-first hotel reservation specialist. Its acquisition by Airbnb could help the hospitality platform increase its mobile footprint, especially among mobile-savvy consumers looking for the type of last-minute bookings for which HotelTonight is known. The acquisition comes at a time when hotel chains are looking for creative ways to compete with Airbnb's boutique offerings, such as Kimpton's recent expansion of its interactive Room 301 influencer experience.
Like ride-hailing company Uber, Airbnb is a disruptor of an established industry as a "sharing economy" platform. The company has branched out from its initial focus on home-sharing into other services as part of its ambition to be a one-stop shop for travelers. The addition of HotelTonight expands Airbnb's reach into the hotel industry more than a year after starting Airbnb Plus as a hotel-like service that lets travelers book properties that are verified to meet higher standards of cleanliness, comfort, design and hospitality.
CEO Brian Chesky spent two weeks booking and staying in different HotelTonight properties to research the deal, CNBC reported. HotelTonight will continue to operate independently while Airbnb considers how to integrate its boutique hotels and bed-and-breakfast listings into its platform. After the deal is completed, HotelTonight founder Sam Shank will report to Greg Greeley, Airbnb's president of homes, and lead the company's boutique hotel category, per the company blog.
Meanwhile, Airbnb isn't limiting its growth plans to lodging. The company last month hired Fred Reid, the founding CEO of Virgin America and a former president of Delta Airlines and Lufthansa Airlines, to seek more partnerships in the transportation industry and broader travel space. It remains to be seen what kinds of transportation partnerships Airbnb will strike. Chesky considered starting an airline two years ago, The Information reported, but has since inched back those plans, per CNN.
Like Uber, Airbnb also has filed for an initial public offering (IPO) of stock, although it's unclear when it will go public. The company became profitable in 2017, and has raised more than $4 billion from investors. Its most recent funding round valued the company at $31 billion, CNBC reported.