Airbnb sought to buy Hotel Tonight before floating stocks: reports
Airbnb move comes in the wake of hotel analysts saying company would need to diversify before going public
Airbnb has held talks related to acquiring Hotel Tonight, a San Francisco-based company that sells unused hotel inventory through an app at the last minute, according to media reports.
The Wall Street Journal newspaper reported, however, that talks between the two private sector companies have now gone cold.
NEED FOR DIVERSIFICATION
Airbnb—which continues to plan a public IPO—is potentially looking to boost its growth potential by diversifying, a move aimed at attracting new investors.
In fact, many analysts have said that buying another hotel booking site or even potentially buying actual hotels may just be an important and necessary step before Airbnb goes public.
If it does happen, a revised time table for such a deal would have Airbnb making its initial public offering (IPO) move in 2020.
As of March 2017, Hotel Tonight has been valued at $463 million following a $131 million round of funding. Nearly two years later, the company is now thought to be worth much more.
Airbnb, meanwhile, was valued at $31 billion following its most recent funding round in that same month of March 2017. The fact remains that Airbnb simply must broaden its offerings.
Many of Airbnb’s recent moves such as Airbnb Plus, a luxury offering to reach business travelers, and its Experiences program have all been efforts to mimic the services and standardization of traditional hotel chains.
Some of those moves, specifically the Experiences program, have not lived up to expectations, observers say.
The Wall Street Journal notes that Airbnb has, in fact, expanded its listings for boutique hotels by as much as 152 percent since it started in 2008. The company has also customized several of its properties for better uptake on home-sharing sites.
Experts in the hospitality space have said Airbnb is working to become something closer to an online travel agency like Expedia or Priceline.
Let’s take a look at a few other projects currently underway related to residences:
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