Airbnb acquires last-minute hotel booking app HotelTonight

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Airbnb has struck a deal that will help bolster its boutique hotel business.

The company announced Thursday it signed an agreement to acquire HotelTonight, a last-minute hotel booking startup.

HotelTonight, founded in 2010, is best known for its app and website that allow customers to book discounted hotel rooms ranging from boutique hotels to large chains — on short notice. While the acquisition price was not disclosed, HotelTonight was last valued at $463 million in 2017.

Airbnb, which is worth about $31 billion, previously said it is on a mission to build a platform that helps people with all aspects of travel, including where to stay, what to do and how to get there. The acquisition will help Airbnb diversify its business as it gears up to go public.

But the move could also spur backlash from the hotel industry, which has been a vocal adversary to Airbnb and has pushed for regulations on short-term rental businesses. Although HotelTonight lists excess inventory from some big hotel brands, those companies may take issue with the concept now that the app is part of Airbnb.

In addition to booking hotels for the same day or next night, the service also lets users book up to a week in advance for stays up to 5 nights, or up to 100 days in advance for stays up to 14 nights. Airbnb already allows boutique hotels and bed-and-breakfasts to list rooms on its platform, and in 2018, it made it easier for boutique hotels to use the site.

Airbnb said Thursday that the boutique-hotel offerings are beneficial to its core home rental business. Nearly 90% of guests who used Airbnb to book a hotel room have returned to the platform for a second trip and booked a home rental listing, according to the company.

The HotelTonight app and website will continue to operate as it does today, the company said. Over time, Airbnb will add select listings of boutique rooms from HotelTonight to the Airbnb platform, the company added.

Airbnb said HotelTonight CEO Sam Shank, who co-founded the San Francisco-based company, will stay on to lead Airbnb’s boutique hotel category when the deal is complete. Shank will report to Greg Greeley, Airbnb’s president of homes.

Airbnb has acquired a handful of other startups over the years, including social-payments startup Tilt in 2017 and Accomable, a London-based Airbnb-like service for the mobility sector in 2016.

Airbnb and HotelTonight had previously been in informal discussions about an acquisition but talks were believed to have gone cold, according to a Wall Street Journal report in January.

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