HotelTonight let travelers book unsold hotel rooms at steep discounts on the same day. Founded in 2010, the San Francisco company grew fast on venture capital and sold to Airbnb in 2019 for a reported sum exceeding $400 million. The deal let Airbnb move beyond home rentals into boutique and independent hotels. The HotelTonight app and brand ran independently for a time before folding into Airbnb's marketplace.
Founding and the Last-Minute Idea
Sam Shank, Jared Simon and Chris Bailey started HotelTonight in San Francisco in 2010. The insight was straightforward: hotels had empty rooms every night, and travelers sometimes needed a room at the last minute. A mobile app connecting those two sides could offer serious discounts while helping hotels fill beds that would otherwise sit empty.
The timing mattered. Smartphones were becoming ubiquitous, and the travel industry had not yet embraced mobile-first booking. HotelTonight launched as an iPhone app, unusual when most hotel booking happened on desktop websites or through travel agencies. The app focused on same-day stays, which meant the supply was perishable. A room unsold by 6 p.m. generated no revenue that night. HotelTonight gave hotels a way to capture some of that value.
The Business Model: Mobile-First and Same-Day Only
Three defining constraints
HotelTonight's core product showed discounted rooms available for booking that same day. Users opened the app, saw a curated list of hotels in their city, and booked in a few taps. Discounts often ran 30 to 60 percent off the standard rate. Hotels used the service to offload unsold rooms.
The model had several features that set it apart from established online travel agencies. It was mobile-only: no desktop website for booking. It was last-minute only: no booking for next week. And the app deliberately hid the hotel name until the user committed to book. This gamification created a sense of discovery and urgency. Users saw a price and a neighborhood, not the property name. The approach worked for spontaneous travelers and for hotels that wanted to discount rooms without publicly advertising lower rates.
Growth and Venture Capital Funding
Raising capital and expanding reach
Before the Airbnb deal, HotelTonight raised roughly $131 million in venture funding from Battery Ventures, Accel and Coatue Management. The company used that capital to expand from a handful of US cities to markets across North America and Europe. It also added features like advance booking for some supply and a loyalty program called HT Perks.
Standing out in a crowded field
The growth trajectory was strong but not without challenges. Rivals included other last-minute booking apps such as HotelQuickly and Blink, plus the established online travel agencies that began adding mobile and last-minute features. HotelTonight's differentiation rested on its focus and curation. It did not try to list every hotel in a city. It selected properties that met a quality threshold, which made the browsing experience faster and more reliable for users.
The Airbnb Acquisition in 2019
In March 2019, Airbnb announced it had agreed to buy HotelTonight. The deal was reported to be valued at over $400 million. Sam Shank, HotelTonight's CEO, joined Airbnb after the close. The transaction marked a significant shift for Airbnb, which until then had focused almost entirely on alternative accommodations: homes, apartments and vacation rentals.
For Airbnb, the purchase served a clear strategic purpose. The company wanted to expand into conventional hotel bookings, particularly boutique and independent properties that matched the design and experience aesthetic of Airbnb listings. HotelTonight had relationships with thousands of hotels and a technology stack built for mobile booking. Buying the company gave Airbnb a ready-made hotel supply and a team that understood the hotel industry. It also gave Airbnb a foothold in the last-minute travel segment, a gap in its product lineup.
What Happened to HotelTonight After the Deal
A gradual handover
After the close, HotelTonight continued to operate as a standalone app and brand for a period. Users could still book last-minute hotel rooms through the HotelTonight app. Over time, Airbnb began integrating the company's supply into its own marketplace. The hotel rooms that HotelTonight had under contract became bookable through Airbnb's main app and website. This gave Airbnb users access to a new category of accommodations alongside homes and apartments.
Why the slow integration mattered
The integration was gradual. Airbnb did not immediately shut down the HotelTonight app or retire the brand. The exact timing of the full integration is not publicly documented in detail, but the effect was clear. Airbnb had successfully added conventional hotels to its offerings without building the supply relationships from scratch. For hotel owners, the deal meant access to Airbnb's large user base. For travelers, it meant more choices within a single booking marketplace.
Competitive Landscape and Lasting Significance
The mobile-first edge
HotelTonight operated in a competitive segment of the online travel market. Direct rivals included other last-minute booking apps, but the broader competitive set included Expedia, Booking.com and Priceline. Those incumbents had vast hotel inventories and loyal customer bases, yet their mobile experiences were often secondary to their desktop offerings. HotelTonight's mobile-first design gave it an edge with younger travelers who preferred booking on their phones.
Airbnb's strategic pivot
The acquisition by Airbnb changed the competitive dynamics. Airbnb had been viewed primarily as a threat to hotels, not a partner. By buying HotelTonight, Airbnb signaled it wanted to be a marketplace for all types of travel accommodations, not just home rentals. This move put Airbnb in more direct competition with the established online travel agencies.
A validated exit
For the industry, the deal showed that last-minute mobile booking had become a valuable enough segment that a major player was willing to pay over $400 million to enter it. HotelTonight's founders and investors achieved a successful exit, and the company's technology and hotel relationships became part of one of the largest travel marketplaces in the world.
Key Facts
- Founded: 2010 by Sam Shank, Jared Simon, and Chris Bailey
- Headquarters: San Francisco, California
- Business Model: Mobile-first, last-minute, same-day hotel bookings
- Total Funding Raised: Approximately $131 million
- Key Investors: Battery Ventures, Accel, Coatue Management
- Acquired By: Airbnb in March 2019
- Acquisition Value: Reported to be over $400 million
- Outcome: Acquisition completed; HotelTonight app and brand eventually integrated into Airbnb's platform
Frequently Asked Questions
What was HotelTonight?
HotelTonight was a mobile app that offered last-minute, same-day hotel bookings at discounted rates. It was founded in 2010 and acquired by Airbnb in 2019.
How did HotelTonight make money?
HotelTonight took a commission on each booking, similar to other online travel agencies. Hotels offered discounted rates to fill unsold rooms, and HotelTonight kept a portion of the booking fee.
Why did Airbnb buy HotelTonight?
Airbnb wanted to expand into conventional hotel bookings, especially boutique and independent hotels. HotelTonight gave Airbnb an existing hotel supply, technology, and relationships.
Is HotelTonight still operating?
The HotelTonight app and brand continued independently after the acquisition for a period before being integrated into Airbnb's broader marketplace. The exact status of the standalone app as of 2024 is not publicly established.
