AirBnB, the US online marketplace that connects people who want to rent out their free spaces for people who are looking for some accommodations, is adding another company to its portfolio. The company’s latest addition is the last-minute hotel booking app HotelTonight. The deal comes ahead of the company's planned IPO (initial public offering).
Airbnb has acquired the San Francisco-based service for an undisclosed amount. The company has declined to share information about how much it paid for the 9-year-old mobile hotel booking app. The deal will allow Airbnb to extend its core home-sharing business to include some hotel experience, which now the focus of the company’s expansion plan.
About the latest addition, HotelTonight
Founded in 2010 and based in San Francisco, HotelTonight is a mobile hotel booking application that allows both business and leisure travelers to find and reserve same-day hotel accommodations. The startup offers some of the best pricing for the last-minute hotel deals, offering discounted rooms to travelers.
Before its deal with Airbnb, the startup has managed to raise around $131 million in total funding. The startup’s investors include some of the biggest names in the venture capital world. These include Accel, Battery Ventures, Forerunner Ventures, First Round Capital, All Blue Capital, Manhattan Venture Capital, RSC Capital, US Venture Partners, GGV Capital, Coatue Management, Aspect Ventures and individual investor like Victor Koch.
The startup makes most of its revenue from hotel reservations from small hotels, targeting business areas. This makes the startup a good fit for Airbnb’s next big expansion plan, which now includes some concierge services as well as optional tours for select bookings. The deal comes after the launch of Airbnb Plus, a newly added service that allows hotel operators to list rooms on Airbnb’s online marketplace or platform.
Since the launch of Airbnb Plus and the addition of hotel features, the tech giant has seen a huge increase in its hotel bookings.
The latest deal is also expected to boost the already well-established Airbnb’s core home-sharing business. According to the tech giant, around 90 percent of the users who made a hotel reservation (using the Airbnb platform) have decided to book a stay in a home.
Airbnb is expecting around 500 million guest arrivals by the end of the first quarter, the company claimed in its recent blog post.
As of the transaction, the HotelTonight’s mobile app and website will continue to operate independently. But its offerings and contents will also be made available to Airbnb Plus service.
Airbnb plan for big IPO
The deal with HotelTonight will help the company in their massive expansion plans, which include a number of listings from boutique hotels. Many analysts this deal as a part of a much bigger company’s strategy, whose main goal is to win the heart and minds of travelers who have shied away from the risks of renting a home.
The company has started its 2019 business year with some strategic acquisitions.
Earlier this year, it snatched Gaest, a Denmark-based startup that provides a marketplace-style platform for people that want to post and book venues for business meeting and events. And now, it bought again another startup, HotelTonight. The company is currently profitable and doing well. It is valued at $31 billion, according to a recent report by TechCrunch.
Airbnb’s bold plan to become a one-stop travel service for all travelers has places the company in a collision course with more established and bigger rivals, Priceline and Expedia. This means that the company will need to be more creative and focus.
In addition to the HotelTonight deal, the company is also preparing for its upcoming IPO or initial public offering. The company’s billion-dollar valuation is expected to draw some attention, especially in the business world.
