Airbnb’s more than US$400 million acquisition of HotelTonight will enable Airbnb for the development of an end-to-end travel platform that allows its users to track down last-minute Airbnb lodgings and also hotel accommodations. This news also came just a little over a year after Airbnb first introduced Airbnb Plus, a subsection of its service which includes boutique hotels and traditional bed and breakfasts in early 2018. Airbnb’s other services include Airbnb for Work which also had quick success. Launched in 2014, it now accounts for about 15 percent of bookings.
This new acquisition was hardly a secret as it has already “brought on boutique hotels.” Referring to the startup as a “very, very small company,” Glenn Fogel, CEO of Booking Holdings, said that he’s unsure that adding the hotel-booking startup represents anything different than what Airbnb previously discussed.
Airbnb had been working in recent years to expand its home rental marketplace into a travel platform, which has now included concierge services and optional tours for selected bookings. Since launching its Airbnb Plus and adding more hotel availabilities, the company claims to have tripled hotel bookings on its platform from 2017 to 2018.
“We started HotelTonight because we knew people wanted a better way to book an amazing hotel room on-demand, and we are excited to join forces with Airbnb to bring this service to guests around the world,”Sam Shank, Co-founder and CEO of HotelTonight
San Francisco-based HotelTonight gathered a valuation of US$463 million with a US$37 million Series E funding in 2017 since it was founded in 2010. The startup has secured a total of US$131 million in venture capital funding from Accel and Battery Ventures, which have been in nearly every round of funding for HotelTonight. The startup’s early investors include Forerunner Ventures and First Round Capital.
HotelTonight offers discounts at hotels in the United States, Europe, and Australia. It partners with hotels to provide un-sold rooms, catering to business travelers or those seeking to make last-minute accommodation arrangements. This deal will make it easier for Airbnb users to book hotels without planning weeks or months ahead and will help Airbnb expand its community beyond short-term rental hosts and guests.
Kicking off 2019 with an acquisitive streak, Airbnb has also acquired Danish startup Gaest, a provider of a marketplace-style platform for users to post and book venues for meetings and other work-related events in January.
Working with hotels will also make it easier for Airbnb to enter certain markets that have stricter housing rules on renting properties for short-term stays. According to a press release, HotelTonight app will continue to operate as usual, but the inventories will likely also be made available through the Airbnb’s Plus portal.