Airbnb is acquiring the online hotel booking platform HotelTonight Inc. in a move to diversify its service offerings.
The rental-by-owner company announced the acquisition Thursday, saying in a statement that HotelTonight will help further Airbnb’s mission to “create a world where anyone can belong anywhere.” HotelTonight was founded in 2010 and offers deals on unsold hotel rooms in 18 U.S. cities, as well as Sydney, Australia.
“HotelTonight is a hotel-booking service focused on making last-minute trips easy and fun, offering guests seamless, on-demand booking for boutique and independent hotels,” Airbnb’s statement explained.
Speaking of the acquisition, Airbnb co-founder and CEO Brian Chesky said in a statement Thursday that “a big part of building an end-to-end travel platform is serving every guest, whether they plan their trip a year or a day in advance.”
“Working with the incredible team at HotelTonight,” Chesky continued, “we will offer guests an unparalleled last-minute travel experience that provides unique, memorable hospitality on every trip, on any schedule, at any time.”
HotelTonight co-founder and CEO Sam Shank said Thursday that by joining Airbnb the company “can give guests more choices.”
“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,” Shank continued in a statement.
The financial details of the acquisition were not publicly disclosed. However, the New York Times reported that the deal values HotelTonight at around $465 million, which would make it Airbnb’s largest acquisition.
Users can access HotelTonight via the web or one of the company’s mobile apps for Apple iOS devices (iPhone and iPad) and Android devices (Google, Samsung, Huawei, and others). An Airbnb spokesperson told Inman Thursday that the apps have been downloaded 32 million times.
In a blog post from 2017, Shank wrote that HotelTonight initially focused on growth and was burning through $30 million a year. However, after confronting fundraising challenges, HotelTonight pivoted and managed to become profitable over a period of seven months.
For its part, Airbnb said Thursday that in 2018 the company more than doubled the number of rooms it had in boutique hotels, bed and breakfasts, hostels, resorts and other similarly categorized properties. The company also revealed that “same-day bookings are now growing 2x year over year,” and that more than 400,000 businesses now use Airbnb to manage their travel.
Those stats hint at why Airbnb might have wanted to scoop up HotelTonight — a company that falls well outside of its conventional, rental-by-owner business model.
The acquisition comes as Airbnb prepares to go public either this year or, more likely, next year, according to the Wall Street Journal. And in that context, picking up HotelTonight demonstrates Airbnb’s ability to both grow and diversify — important factors for investors who might snap up shares in the future.