Airbnb Acquires HotelTonight, What’s the Difference Between Homesharing and Hotels Anymore?

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.

(HT: @HH_Cash)

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Why didn’t AirBNB just build their own from scratch? Half a billion buys a lot of labor costs.

  2. What’s the difference between buying something from Amazon and buying something from eBay?

  3. They could have built something probably much better but in the start-up space it’s all about speed. They have a ready to go instant platform. I’m sure their engineers will improve it but it’s all about speed, especially as they plan to do their IPO this year and go public. It’s all about speed and getting this out there before their IPO.

  4. Sounds like a good idea – airbnb isn’t ideal for last-minute, one-night stays, so HotelTonight (in their initial incarnation) is a good product fit.
    It might also give airbnb an easier way to accommodate stranded guests when the host cancels in the last minute…

  5. Besides that, they make us sign this agreement. “I agree to treat everyone in the Airbnb community—regardless of their race, religion, national origin, ethnicity, disability, sex, gender identity, sexual orientation, or age—with respect, and without judgment or bias.”

    We were planning a trip with a different couple and they refused to stay at an Airbnb due to this requirement. I agree that everyone should be treated with respect and without bias, but their issue was the judgement piece. Not only do you need to act in a certain way, they are trying to force you to think a certain way.

    And yet they go on with their own bias as Chris pointed out, and they don’t treat people with respect. They make you sign something that may go against your conscience. I know there is the active word to TREAT without judgement, and that is what I argued with the other couple. We can certainly agree to not Treat someone differently. But the word judgement certainly is an afront. AirBnb, we can choose to think as we wish. I guess AirBnb has no problem judging someone as unfit to rent through them because the person doesn’t have the same values as theirs.

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