Airbnb to buy HotelTonight in its biggest acquisition yet ahead of expected IPO

Airbnb agreed to buy HotelTonight, its biggest acquisition yet, in a move to increase hotel listings on the site ahead of an eventual initial public offering for the home-sharing start-up.

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 US$463 million, according to PitchBook Data, a market research firm. In early 2017, Airbnb acquired Luxury Retreats for about US$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.

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. Airbnb transformed the travel sector by persuading millions of people to open up their homes to strangers. It 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.

In November 2016, co-founder and Chief Executive Officer Brian 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 equivalent for travel – a one-stop-shop for holiday-goers.