With Airbnb looking to grow its burgeoning hotel inventory, most industry analysts agree that the company’s takeover of last-minute booking platform HotelTonight is a strategic win for the homesharing heavyweight.
“Airbnb has been trying to get more independent hotels on its platform for a while, and this was a smart way for them to dip their toes a little more into the space,” said Makarand Mody, assistant professor of hospitality marketing at the Boston University School of Hospitality Administration. He added that the purchase also gives Airbnb more competitive clout.
“I think this is definitely a distribution synergy-based acquisition, and it’s really about the battle of the click,” Mody said. “When you look at what the OTAs, hotel companies and Airbnb are all doing, it’s basically just becoming a big distribution game.”
According to Simon Lehmann, CEO and co-founder of AJL Consulting, a private accommodation and vacation rental industry firm, the move also serves as a way for Airbnb to quickly augment its footprint ahead of a planned initial public offering.
“Airbnb will need to justify their expected IPO valuation,” Lehmann said. “And you can’t scale Airbnb by solely depending on hosts. So obviously, the next step is to start aggregating inventory.”
Airbnb announced earlier this month that it had agreed to acquire HotelTonight for an undisclosed sum, with media reports pegging the deal at between $400 million and $500 million.
Launched in 2010, HotelTonight was originally introduced as a mobile app offering users the ability to book a room that same night at a discounted price. The platform later extended its booking window to seven days and eventually to 100 days, while also adding new features like multiroom booking capabilities.
Airbnb, meanwhile, officially opened its homesharing-focused platform to hotels early last year, offering users access to boutique properties, bed-and-breakfasts and other hospitality venues like hostels and resorts. The company reported that the number of hotel listings more than doubled in 2018, with users booking three times as many nights with boutique hotels in 2018 as they did in 2017.
Though the two platforms vary, Lehmann is confident that HotelTonight will fit comfortably within the Airbnb fold.
