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Analysis

Why Airbnb wants to acquire HotelTonight

The platform has approached the HotelTonight hotel reservation application which has more than 25,000 partner hotels. But why would Airbnb want to change its business model?

The Wall Street Journal revealed that discussions were underway between Airbnb and Hotel Tonight to acquire the latter. If this operation is carried out, the platform could expand its housing offer, open up to traditional hotels and be less dependent on the rental of private homes.

HotelTonight, which stands out from other OTAs by offering last-minute bookings, reported a business volume of 500 million dollars in bookings with 25,000 hotel partners in more than 30 countries in  2016. While Airbnb announced that same year that it would offer more than 660,000 housing units for reservation, thus a more substantial offer, which is also being attacked by local legislations, some of which are seeking to reduce it.


Traditional hotels would thus represent a source of additional income in cities that have a negative view of Airbnb.

Read about the strong arms between the platform and Paris, New York, Ireland.

This acquisition would be a logical continuation for Airbnb, which opened its platform to boutique hotels and announced that this action had enabled it to boost traffic to its website in general. It could therefore be welcome before its IPO scheduled for this year.

However, Airbnb has an image that reflects strong values to its customers such as trust and the sharing of experiences among hosts and guests; and in this respect it defines itself as a "community platform". Integrating traditional hotel reservations on its site could blur its image.

Finally, the reason for the acquisition of the company could be quite different. Dan Wasiolek, senior equity analyst at Morningstar Research Services says: "The rumour that Airbnb is seeking to acquire HotelTonight indicates either a significant shift in focus to offer traditional hotels or the acquisition of the IT structure behind the platform." 

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