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Bloomberg
Airbnb Inc. agreed to buy HotelTonight, its biggest acquisition yet, in a move to increase hotel listings on the site ahead of an eventual initial public offering for the home-sharing startup.
Airbnb declined to disclose financial terms of the deal, but a person familiar with the matter said the price is close to HotelTonight’s last private valuation. A venture capital deal two years ago valued HotelTonight at $463 million, according to PitchBook Data, a market research firm. In early 2017, Airbnb acquired Luxury Retreats for about $300 million, its largest purchase at the time.
San Francisco-based HotelTonight offers last-minute hotel bookings, seeking to tap into unused inventory largely in urban areas, and the app has been a travel-industry darling since it launched in 2010.
The acquisition extends Airbnb’s reach even further into the hotel industry, where it has been a disruptive force since its launch just over a decade ago. Airbnb transformed the travel sector by persuading millions of people to open up their homes to strangers. It became such a market force that mainstream travel and hotel companies like Booking Holdings Inc. have been furiously spending to offer more home listings on their own sites.
In November 2016, co-founder and Chief Executive Officer Brian Chesky announced Airbnb was going to become an end-to-end travel platform, offering flights, experiences and more.
The objective is for Airbnb to become the Amazon.com Inc. equivalent for travel — a one-stop-shop for holiday-goers.
Last year, Airbnb began highlighting hotels more prominently on its website and introduced a loyalty program, taking a step further onto the turf of its rivals. It more than doubled the number of rooms available in properties categorized as boutique hotels, bed-and-breakfasts, and other hospitality venues like hostels and resorts, according to the company. Airbnb has more than 6 million listings, just ahead of Booking with more than 5.7 million home-rental listings.
HotelTonight has leaned toward boutique hotels that offer quirky guest experiences with board games or pillow fight kits in the lobby. “Hotels are catering to this idea of providing experiences, Instagram-able moments for millennials, and we help people get this for a great price,†Sam Shank, the founder and CEO, said in an interview on Bloomberg TV last October. The sale is a change in strategy for Shank, who has been talking about taking HotelTonight public for well over two years.