Published: Sat, March 09, 2019
Markets | By Otis Pena

Home share merger: Airbnb buys HotelTonight app to broaden travel offerings

Home share merger: Airbnb buys HotelTonight app to broaden travel offerings

San Francisco-based HotelTonight has raised over $126 million from investors such as Accel, most recently closing a $37 million round in early 2017 at an estimated valuation of $463 million.

Airbnb has in recent years added premium and luxury home rentals to its platform and allowed boutique hotels to list their rooms on its site.

"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", said Brian Chesky, co-founder, CEO, and head of community at Airbnb.

The HotelTonight app and website will continue to operate. HotelTonight will expand Airbnb's lodging portfolio with an on-demand booking option for boutique and independent hotels.

HotelTonight had raised almost $127 million in venture funding, most recently a $9.2 million round last month, and was valued at $463 million.

Together with HotelTonight, Airbnb believes it can offer places to stay for all types of traveller on any kind of trip and make it easier for small businesses and hoteliers who provide authentic, unique experiences within Airbnb's global network of hosts and guests.

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In 2018, Airbnb more than doubled the number of available rooms in hotels, resorts, hostels and similar venues.

The acquisition extends Airbnb's reach even further into the hotel industry, where it has been a disruptive force since its launch just over a decade ago.

Founded in 2010, HotelTonight offers an online travel app that enables users to find discounted hotel accommodation around the world. The company is also said to be on track to be profitable for the second consecutive year in 2019 before interest, taxes, depreciation and amortization.

Three HotelTonight executives whose roles are not continuing after the acquisition will be out of a job, according to a person familiar with the deal's terms, while the remaining employees will join Airbnb.

Unlike most sky-high valued tech firms, Airbnb and HotelTonight do both now appear to be profitable operations. Airbnb, on the other hand, is valued at $31 billion and is expected to file for an initial public offering some time this year.

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