Home-sharing giant Airbnb is looking more and more like an online travel agency with each passing year, and the company’s plans to acquire travel app HotelTonight isn’t likely to change this perception any time soon.
The HotelTonight app allows users to make last-minute bookings on discounted hotel rooms. Launched in 2010 it reportedly has been downloaded by more than 15 million users.
Airbnb indicated its acquisition of HotelTonight would allow it to: accelerate its work in building an end-to-end travel platform that serves all users, meet growing demand for boutique hotels and support its Homes hosts. This strategy is in line with what was said at this year’s International Hotel Investment Forum in Berlin, where Airbnb executive Greg Greeley said the company will operate as an open platform that is accepting of new ideas. Greeley also declined to define Airbnb as a home-sharing company, hospitality company or otherwise, and its purchase of HotelTonight reflects this fluidity.
“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,” said Brian Chesky, Airbnb’s co-founder/CEO and head of community, in a statement. “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.”
Following the acquisition, HotelTonight will continue to operate its own website and app independent of Airbnb,, with HotelTonight co-founder Sam Shank reporting to Airbnb’s Greeley.
“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,” said Shank. “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.”
Chesky stated his company plans on becoming an all-encompassing travel platform, something similar to an OTA.
Nick Wyatt, head of research and analysis, travel and tourism at analytics company GlobalData, said he anticipates Airbnb will make a initial public offering some time in 2020. He said this will attract investors because it will push the company further into the hotel-booking business, diversifying its revenue streams.
“Buying HotelTonight increases its presence as an intermediary and this helps, to some extent, to mitigate the risks associated with city authorities clamping down on short-term rentals. Investors will very much see this as a positive,” Wyatt said. “The relationship between online travel agents is increasingly strained as hotel operators look to negotiate down commission rates, but ultimately the relationship is mutually beneficial and this is a great addition to Airbnb’s portfolio of services.”
The American Hotel & Lodging Association responded to Airbnb's announcement, stating the acquisition of HotelTonight shows Airbnb is still looking to legitimize a business that continues to skirt industry regulations.
“We’re not surprised by this move given major cities, including New York, Boston, Los Angeles and Washington, D.C., just passed strong short-term rental laws last year to rein in Airbnb. Not to mention they are facing an outcry form a broad-based coalition of residents, affordable housing, labor and community leaders about their negative impact on housing and neighborhoods across the country," said Chip Rogers, president/CEO of the AH&LA. "This move is likely a knee-jerk reaction to offset their financial losses when these regulations take effect this year and in anticipation of other major cities likely to pass similar laws.
“If Airbnb wants to enter the hotel business, then it needs to do so on a level playing field and be regulated, taxed and subject to the same safety compliances and oversight that law-abiding hotel companies adhere to each and every day,” said Rogers.