Airbnb set to acquire HotelTonight

Airbnb Inc. agreed to buy HotelTonight, its biggest acquisition yet, in a move to increase hotel listings on the site as the home-sharing startup prepares for an eventual public offering.

Airbnb declined to disclose financial terms of the deal, but a person familiar with the matter said the price is close to HotelTonight's last private valuation. A venture capital deal two years ago valued HotelTonight at $463 million, according to PitchBook Data, a market research firm. In early 2017, Airbnb acquired Luxury Retreats for about $300 million, its largest purchase at the time.

San Francisco-based HotelTonight offers last-minute hotel bookings, seeking to tap into unused inventory largely in urban areas, and the app has been a travel-industry darling since it launched in 2010. It has partnerships with thousands of hotels in North and South America, Europe and Australia.

The acquisition extends Airbnb's reach even further into the hotel industry, where it has been a disruptive rival since its launch just over ten years ago. Airbnb transformed the travel sector by persuading millions of people to open up their homes to strangers, and became such a market force that mainstream travel and hotel companies like Booking Holdings Inc. have been furiously spending to offer more home listings on their own sites. Last year, Airbnb began highlighting hotels on its website and introduced a loyalty program, taking a step further onto the turf of its rivals.

Airbnb, which is valued by private investors at $31 billion, is preparing to go public, although it has not specified a time frame. Before that, it has expanded its offerings beyond home stays. The company now offers 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.

HotelTonight appealed to Airbnb because it fits into the company's own model and will help it cater to growing consumer demand for same-day bookings, according to the company. Airbnb has more than 6 million listings.

For the past four weeks, Airbnb co-founder and Chief Executive Officer Brian Chesky has lived out of HotelTonight listings in and around San Francisco to try out the site. Chesky wanted to taste-test HotelTonight as the deal approached, an Airbnb official said.

In November 2016, Chesky announced Airbnb was going to become an end-to-end travel platform, offering flights, experiences and more. The objective is for Airbnb to become the Amazon.com Inc. equivalent for travel -- a one-stop-shop for holiday-goers.

Information for this article was contributed by Olivia Zaleski of Bloomberg News and by The Associated Press.

Business on 03/08/2019

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