With Airbnb looking to grow its burgeoning hotel inventory,
most industry analysts agree that the company's takeover of
last-minute booking platform HotelTonight is a strategic win for the
"Airbnb has been trying to get more independent hotels
on its platform for a while, and this was a smart way for them to dip their
toes a little more into the space," said Makarand Mody, assistant
professor of hospitality marketing at the Boston University School of
Hospitality Administration. He added that the purchase also gives Airbnb more
"I think this is definitely a distribution
synergy-based acquisition for Airbnb, and it's really about the battle of the
click," Mody said. "When you look at what the OTAs, hotel companies
and Airbnb are all doing, it's basically just becoming a big distribution game."
According to Simon Lehmann, CEO and co-founder of AJL
Consulting, a private accommodation and vacation rental industry firm, the move
also serves as a way for Airbnb to quickly augment its footprint ahead of a
planned initial public offering.
"Airbnb will need to justify their expected IPO
valuation," Lehmann said. "And you can't scale Airbnb by solely
depending on hosts. So obviously, the next step is to start aggregating
Airbnb announced earlier this month that it had agreed to
acquire HotelTonight for an undisclosed sum, with media reports pegging the
deal at between $400 million and $500 million.
Launched in 2010, HotelTonight was originally introduced as
a mobile app offering users the ability to book a room that same night at a
discounted price. The platform later extended its booking window to seven days
and eventually to 100 days, while also adding new features like multiroom
Airbnb, meanwhile, officially opened its homesharing-focused
platform to hotels early last year, offering users access to boutique
properties, bed-and-breakfasts and other hospitality venues like hostels and
resorts. The company reported that the number of hotel listings on Airbnb more
than doubled in 2018, with Airbnb users booking three times as many nights with
boutique hotels in 2018 as they did in 2017.
Though the two platforms vary, Lehmann is confident that
HotelTonight will fit comfortably within the Airbnb fold.
"The type of customer who uses HotelTonight is very
similar to the Airbnb customer, as well," he said. "He's flexible, he's
looking for a good deal, he's not too worried about what his accommodations
will be like when he gets there. I think the user base that HotelTonight has
could provide Airbnb huge leverage in terms of database and additional
Lehmann added that unlike many of Airbnb's core listings,
HotelTonight's inventory isn't at the mercy of local regulatory challenges,
which have intensified in key markets, including Paris and Miami, among others,
in recent months.
Robert Cole, Phocuswright's senior research analyst for lodging
and leisure travel, also said he saw opportunities for crossover.
"I think they may be able to have situations where
HotelTonight inventory could pop up in the Airbnb interface and vice versa,"
He also asserted that Airbnb will have to be careful when it
comes to clearly delineating between its hotel and home listings.
"It depends on the traveler and the purpose of the
trip," he said. "But the more Airbnb can understand that and then
present the right unit or hotel to the right person at the right time, the
better. And HotelTonight gives them access to a lot of very interesting hotel
data to work with."
Of course, the deal isn't entirely without potential
drawbacks. While Airbnb claims that nearly 90% of guests who first used Airbnb
to book a hotel subsequently returned to book a home accommodation, home hosts
who have invested in offering a more professional and premium experience --
often earning Superhost or Airbnb Plus status -- might find Airbnb's recent
focus on growing hotel inventory somewhat concerning.
Boston University's Mody said, "I think Airbnb might be
worried that they'll see some leakage of hosts on their platform, particularly
from those who hear this news and say, 'You know what? What's the difference
now? Why should I list on Airbnb and not also be on some of the other
platforms?' We may start to see more cross-platform listings, because then it's
going to become a distribution game for hosts as well, much like [it is] for
Likewise, as Airbnb's model starts to more closely mimic
that of a major OTA, Mody said, the company could also risk confusing customers
and losing some of its carefully crafted cachet.
"The whole idea of Airbnb was, when it started, this
sort of counter-culture platform where you could get something that was
different from a hotel," Mody said. "But now, if you're going to find
some of the same inventory on Airbnb that you do on an Expedia or Booking.com or another OTA, there is a likelihood that it's going
to be harder for users to figure out which is the best platform for them.
"Right now, with Airbnb, you still mostly know what
[type of accommodation] you're getting. But once you start throwing hotels into
the mix, I don't necessarily know, as a consumer, what might be the benefit of
booking on Airbnb versus Expedia.