[Read on The New York Times]
SAN FRANCISCO — Airbnb says it plans to acquire HotelTonight, a service for travelers seeking last-minute hotel bookings, in a deal that will expand the lodging-rental company’s portfolio with traditional and boutique hotel listings.
Terms of the deal were not disclosed. The acquisition values HotelTonight in the vicinity of its last private valuation, $465 million, said two people who were briefed on the deal and were not authorized to disclose the price. That would make it Airbnb’s biggest acquisition.
In a statement, Brian Chesky, Airbnb’s chief executive, emphasized the company’s desire to expand into all aspects of travel. “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,” he said.
Airbnb, which is valued by private investors at $31 billion, is preparing to go public, though it has not specified a time frame. Ahead of that, it has expanded beyond home stays to appeal to a broader range of travelers. The company now lists boutique hotels, luxury hotels, activities and a hotel-like service called Airbnb Plus. In February, Airbnb hired Fred Reid, former chief executive of Virgin American, to strike more partnerships in the transportation industry.
The San Francisco company is part of a coterie of highly valued start-ups, often called “unicorns.” Many of these unicorns are now moving toward the public markets, including the ride-hailing firms Uber and Lyft. Last week, Lyft unveiled its public offering prospectus, which showed that the company was growing quickly but was also losing money. Airbnb has turned a profit, excluding certain costs, for the past two years, the company said in January
Founded in 2010, HotelTonight has raised $127 million in venture funding, according to Crunchbase. It began as an app that listed discounted rooms to last-minute travelers. But the company put a priority on growth over profits in its first five years of operation, burning as much as $30 million a year, according to a blog post by Sam Shank, HotelTonight’s chief executive and co-founder. In 2015, HotelTonight laid off 37 employees, or 20 percent of its staff.
In 2017, HotelTonight expanded the time frame in which customers can book hotels to 100 days, putting it in direct competition with the likes of Expedia and Booking Holdings, the $80 billion travel behemoth that owns Priceline and Booking.com.
Airbnb is also locked in competition with Booking Holdings. The two companies have taken turns announcing ever-larger numbers of home listings in the last year; Airbnb currently touts six million. Buying HotelTonight gives Airbnb access to even more properties. Airbnb said HotelTonight would continue to operate as a stand-alone business.