Airbnb has announced that it is acquiring the hotel booking platform company HotelTonight. The terms of the deal were undisclosed, but Erin Griffith of The New York Times said that it is in the “vicinity of its last private valuation” of $465 million.
This means it is the largest acquisition to date for Airbnb. One of Airbnb’s previous biggest deals was for travel service Luxury Retreats for $300 million in 2017.
HotelTonight launched in San Francisco back in 2010. Since then, HotelTonight raised $127 million in venture funding. However, the company spent the first five years with a high burn rate. At one point, HotelTonight was burning through $2.5 million per month ($30 million per year).
“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 Airbnb co-founder, CEO, and head of community Brian Chesky. “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.”
Airbnb’s decision to buy HotelTonight may be linked to regulations from cities that limit rental availability. This means that Airbnb could still generate revenue from the hospitality industry through HotelTonight in markets that heavily regulate personal home rentals.
Through the HotelTonight acquisition, Airbnb plans to become an “end-to-end travel platform.” Last year, Airbnb expanded by doubling its number of boutique hotels, resorts, and B&Bs.
HotelTonight’s booking app and website are going to continue operating independently. So you can still expect HotelTonight to offer hotel reservations at discounted rates. Following the acquisition, Shank is going to lead Airbnb’s boutique hotel category.
“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,” added HotelTonight co-founder and CEO Sam 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.”
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