Airbnb announced on Thursday it has signed an agreement to acquire HotelTonight, in a move that ramps up Airbnb’s boutique hotel offerings and helps diversify its business ahead of an expected public debut. The terms of the deal were not disclosed.
“Working with the incredible team at HotelTonight, we will offer guests an unparalleled last-minute travel experience that provides unique, memorable hospitality on every trip, on any schedule, at any time,” Brian Chesky, Airbnb co-founder and CEO, said in a statement.
HotelTonight, an app that enables travelers to book discounted hotel accommodations at the last minute, will remain a free-standing entity once the deal is approved. A spokesperson clarified that some HotelTonight rooms may be found on Airbnb, and, in some cases, users cruising the Airbnb platform may be redirected to HotelTonight if they can’t find what they are looking for on Airbnb.
“Together, HotelTonight and Airbnb can give guests more choices and the world’s best boutique and independent hotels a genuine partner to connect them with those guests,” HotelTonight Co-Founder and CEO Sam Shank said in a statement.
The acquisition is still subject to review, but an Airbnb spokesperson said the company expects the purchase will be approved in about 30 days.
Airbnb’s move confirms a January report from The Wall Street Journal that the two companies were in talks as part of Airbnb's strategy to expand its brand beyond just peer-to-peer apartment bookings. The Journal also reported that Airbnb was separately considering building a HotelTonight rival platform, as well as forming joint ventures with small hotel chains.
The HotelTonight acquisition isn’t Airbnb’s first foray into boutique hotel bookings. Airbnb has long allowed boutique hotels to list on its open platform. Plus, in early 2018, the company made a push to meet increasing demand for unique accommodations including small hotels, bed and breakfasts, hostels, and resorts by more than doubling these kinds of offerings and making it easier for those businesses to list on its platform. The company said guests responded "enthusiastically," booking three times as many nights in boutiques in 2018 as they did in 2017.
But Airbnb isn’t only looking at accommodations. The company’s ultimate goal is to build an end-to-end travel bookings platform for accommodations, activities, and transportation. The platform already offers accommodations and activities that it calls “experiences,” and in early February, the company made a decisive move toward transportation offerings by hiring airline industry veteran Fred Reid as Global Head of Transportation.
Airbnb was last valued at about $31 billion, following a funding round in 2017, and HotelTonight was valued at about $463 million the same year. Chesky told Recode in 2018 the company would be ready for an initial public offering sometime in 2019, but said he wasn't sure it actually would. Recode later reported Airbnb was mulling a direct listing.
