Why is HotelTonight good for Airbnb?
Even though Airbnb was commonly known for in the room-sharing market, the company has been aiming to become a . Besides hotels, Airbnb also .
For example, for a while. At the time when Airbnb celebrated its 10th anniversary in 2018, there were over , a growth of 520 percent over the previous year. Airbnb also hired an aviation expert last month to oversee the company’s new plan of transportation services.
According to , adding more hotels to its listing has become one of Airbnb’s strategies to boost its growth before the IPO (initial public offering). – HotelTonight, Airbnb can gain immediate market penetration in the OTA market and very likely allow Airbnb to add more hotel listings to its platform.
How much is the deal?
Started in 2010, HotelTonight has already raised about $117 million in venture capital and made the . In 2017, HotelTonight had , with estimated revenue of around $60 million in the year before.
According to , this acquisition is closed at a value of a little bit over $400 million, with about half in cash and the other half in stocks. Because half of the acquisition cost is made up of Airbnb’s stocks, HotelTonight could have “a nice little exit” under the condition that Airbnb’s stock price will increase when it goes public, as most people expect even though .
Last year, Airbnb had a value ranging from S22 million to $50 million, as estimated by Skift Research. Airbnb’s estimated revenue in 2017 was at $2.6 billion.
What’s next for HotelTonight and Airbnb?
While HotelTonight and Airbnb will maintain their operations as two separate entities, Airbnb suggested it would include some HotelTonight listings as part of the company’s larger platform in the future. It is hence not surprising to see more hotel listings will be added to Airbnb’s website soon. Likewise, it is also possible for HotelTonight to add Airbnb listings as part of its offerings, as .
Where is the competition among Airbnb, hotels, and OTAs heading?
The battle among these three key players in the lodging industry is only going to heat up even more, especially when they are all selling the same products now. For example,
· Airbnb will soon add more hotels to its listings with the acquisition of HotelTonight, in addition to its recent inductions of , the certified product types that provide similar hotel amenities.
· Hotels, such as and , have also entered the room-sharing market; they are selling residential rentals too, as what Airbnb does.
· Also through acquisitions (e.g., ), many OTAs invested big in room-sharing business. Travelers can now book residential homes on OTA websites. Coincidentally, and were fighting for the website with the most room-sharing listings last week.
Is acquiring HotelTonight a good deal for Airbnb? Why or why not? What will be Airbnb’s next move towards a travel enterprise?