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.

The acquisition extends Airbnb’s reach even further into the hotel industry, where it has been a disruptive rival since its launch just over 10 years ago. San Francisco-based Airbnb transformed the travel sector by persuading millions of people to open their homes to strangers, and became such a market force that mainstream travel and hotel companies such as Booking Holdings Inc. — whose brands include Priceline and Kayak — 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, further stepping onto its rivals’ turf.


Airbnb said HotelTonight appealed to it because the company fits into Airbnb’s model and will help it cater to growing consumer demand for same-day bookings.

Last year, Airbnb said, it more than doubled the number of rooms available on properties categorized as boutique hotels, bed-and-breakfasts and other hospitality venues such as hostels and resorts. Airbnb has more than 6 million listings, just ahead of Booking, which has more than 5.7 million home-rental listings.

HotelTonight’s app and website will continue to operate independently, but Airbnb will consider eventually integrating its boutique hotels and bed-and-breakfast listings onto its site. Once the acquisition is complete, HotelTonight founder and Chief Executive Sam Shank will report to Greg Greeley, Airbnb’s president of homes.

The acquisition is a change in strategy for Shank, who has been talking about taking HotelTonight public for well over two years. As recently as October, Shank said an initial public offering could be in the cards soon. “We’re definitely thinking about it,” he said in an interview on Bloomberg TV. During the interview, Shank said he deemed Expedia Group Inc. and Booking as his rivals, whereas he said Airbnb was “incredibly complementary to what we do.”


HotelTonight has leaned toward boutique hotels that offer quirky guest experiences with board games or pillow-fight kits in the lobby. “Hotels are catering to this idea of providing experiences, Instagram-able moments for millennials, and we help people get this for a great price,” Shank said during the October interview.

For the last four weeks, Airbnb co-founder and Chief Executive 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 vacationers.