Terms were not disclosed, but sources have told multiple national publications that HotelTonight will fetch close to its $450 million valuation as SF-based Airbnb swallows it whole.
The ink was barely dry on this morning’s New York Times piece on how the next generation of IPO millionaires is “about to eat San Francisco alive” when Airbnb made an announcement that, ostensibly, will add a couple hundred more millionaires to the mix. Airbnb is acquiring HotelTonight, according to Recode, which will add the last-minute hotel-booking app to the San Francisco-based travel platform’s additional options that are not just straight-up other people’s homes.
HotelTonight may not be a household name, but it's based here in SF and by all accounts it's a pretty successful company. CEO Sam Shank explained to Bloomberg in October, “hotels are catering to this idea of providing experiences, Instagram-able moments for Millennials, and we help people get this for a great price.” Those are some damned cringe-worthy buzzwords, but a search of their site shows they do have some very nice luxury hotel listings at pretty surprising discount rates.
HotelTonight’s special sauce is how they list last-minute, bargain rates for unused luxury hotel stock. Airbnb, meanwhile, has designs on becoming what Conde Nast calls “the Amazon of Travel,” and has experimented in recent years with a mixed bag of offerings like “Experiences” (again, ugh), Airbnb-branded apartment complexes, and luxury listings. Analysts see the HotelTonight acquisition as a route to building Airbnb’s customer base so as to get the maximum millions out of their upcoming IPO.
The financial terms of this acquisition were not disclosed, but according to Bloomberg, “a person familiar with the matter” said the price was close to HotelTonight’s most recent valuation of $463 million. That sounds insane to a lay person. But against Airbnb’s current $31 billion valuation, a measly half-billion is, well, the equivalent of maybe one night in a luxury hotel room.
Unlike most sky-high valued tech firms, Airbnb and HotelTonight do both currently appear to be profitable operations.
As an interesting aside, Airbnb co-founder and CEO Brian Chesky has reportedly been testing the waters and staying in HotelTonight listings “for the past four weeks.” Perhaps he even penned a few “Dear San Francisco” letters during that time.
Related: Airbnb CEO Rented Out His Own Unregistered Airbnb [SFist]