Airbnb Acquires Last-minute Hotel Reservation app HotelTonight
Airbnb is trying to become one-stop travel service and will position the company to better compete with travel sites such as Expedia and Priceline.
Home-renting company Airbnb has acquired hotel room searching app, as the company’s latest push to enter the hotel booking segment and attract a variety of travelers before its widely anticipated IPO.
The deal expands Airbnb’s inventory by adding hotel listings along with its home listings. The company is trying to lure those travelers who prefer not to risk staying at a stranger’s home.
Airbnb is trying to become a one-stop shop travel service and will position the company to better compete with travel sites such as Expedia and Priceline.
Terms of the transaction were not disclosed.
Since 2017, HotelTonight has raised more than $115 million in funding. The company has a valuation of $463 million.
Airbnb CEO Brian Chesky called the acquisition “a big part of building an end-to-end travel platform.” Airbnb has been moving into new businesses outside home rentals, as regulations threaten to cap short-term rentals.
The company added tours, luxury homes and reservations and is on its way to add transportation services and last year made changes to its website to make it easier for boutique hotels and B&B to list their rooms.
In 2018, Airbnb doubled the number of rooms in its listings, resulting in three times the number of hotel room bookings year-on-year.
HotelTonight offers last-minute booking, with the San Francisco-based company offering unsold rooms from hotels and offers discounts. Although it is not a large travel-booking website, HotelTonight is profitable. In 2016, the company spent started cut costs by laying staff off and cutting promotions and went from burning up to $3 million a month to earning a profit, CEO and co-founder Sam Shank told Reuters.
Following closure of the transaction Airbnb and HotelTonight will operate as separate companies, Airbnb said. HotelTonight will keep its app and website.
Airbnb is currently valued at $31 billion and is a profitable company.