Major hotels chains have been in and out of experimenting with homesharing products, even as they engage in dirty tricks to get the practice banned in some jurisdictions.
Online travel agency sites have expanded their product suite by offering access to homesharing, and not just traditional hotel rooms.
And now Airbnb itself has acquired online hotel booking company HotelTonight.
Airbnb said it plans to acquire HotelTonight, a service that offers last-minute hotel bookings, in a deal that will expand the online room rental company’s offerings with traditional and boutique hotel listings.
Terms of the deal were not disclosed. The acquisition values HotelTonight in the range of its last private valuation, $465 million, said two people who were briefed on the deal and were not authorized to publicly disclose the price. That would make it Airbnb’s biggest acquisition.
HotelTonight started as a service to help hotels liquidate empty rooms at the list minute. Like Priceline, it took advantage of the idea that a hotel night can never be re-sold once the night has past. Spoiling inventory, which costs little to service (beyond some additional housekeeping when a guest checks out) gets sold inexpensively before it becomes worth zero. That works as long as the last minute booking service doesn’t undermine higher rates other consumers would be willing to pay.
They’ve since expanded their offerings and allow bookings up to 100 nights. They’ve burned through significant cash as they’ve tried to get guest attention and compete with larger booking platforms. They’re a valuable service, but faced daunting prospects. Airbnb will be able to fund them, and gets a traditional hotel booking platform in the process.