What Airbnb's Acquisition of HotelTonight Could Mean for Travelers

In a move that will expand its role in the travel space, Airbnb has inked an agreement to acquire the last-minute booking app, HotelTonight.

If HotelTonight's most recent valuation of $465 million is accurate, it would be Airbnb's largest acquisition to date, according to The New York Times.

In a statement, Airbnb CEO and co-founder, Brian Chesky, said the deal fits into Airbnb's plan to build "an end-to-end travel platform" that accommodates all travelers, whether they "plan their trip a year or a day in advance."

With the addition of HotelTonight's inventory, which is focused on boutique and independent properties, Airbnb will continue its effort to diversify beyond vacation rentals — many of which can only be reserved following approval from owners, which can take time.

Last year, Airbnb more than doubled the number of hotels, bed and breakfasts, resorts and more traditional listings on its platform. The acquisition of HotelTonight signals a deeper investment in expanding its footprint in hotels.

According to internal Airbnb data, the average traveler is booking a trip more than 35 days in advance. But business travelers often have less lead time (closer to 20 days on average), suggesting that this strategic move may also echo Airbnb's interest in luring more business travelers. In 2018, Airbnb reimagined its business travel community as Airbnb for Work, and more than doubled the number of companies that utilize Airbnb as an option for its employees.

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HotelTonight's inventory of more than 25,000 hotels may be insignificant when you consider that Airbnb's listings exceed 6 million. But the purchase of HotelTonight could indicate that Airbnb is preparing to challenge the booking behemoths of Expedia Group (Hotels.com, Orbitz, Expedia) and Booking Holdings (Booking.com, Priceline and Kayak).

Both travel companies already have strong footholds in the alternate accommodation space. Expedia owns HomeAway, and Booking.com has long specialized in nontraditional listings ranging from campsites and igloos to guest houses and pensions.

Until then, however, Airbnb is clearly investing in the tools (and inventory) that will make it a more viable option for both last-minute and business travelers.