Airbnb diversifies its platform to capitalize on the growing experience economy as it prepares for an IPO.

WHAT HAPPENED: Airbnb, planning to go public in early 2020, acquired HotelTonight to further integrate and expand hotel bookings on its platform, but it may be looking further for growth.

Why it matters

  • Airbnb’s purchase of HotelTonight for an estimated $450-500 million, was its biggest acquisition thus far and a good match; Airbnb claims that same-day bookings doubled in 2018 YOY and HotelTonight lets travelers book discounted, last-minute reservations. It will also give Airbnb users who are less inclined to stay in someone’s home with more options, pointing to the company’s burgeoning diversification efforts. The more booking mechanisms it can embed in its platform—the more vertically integrated it can become—the more Airbnb can reap the gains of an industry expected to be worth $1 trillion by 2022, even as competition mounts.
  • Now, there is speculation that Airbnb will snap up Resy, a restaurant booking platform that’s more upscale, though smaller, than OpenTable, which has more than 20 times the restaurants in its database. Resy, which has a mystery potential buyer, is also currently expanding its global presence, which would align well with Airbnb’s international footprint—in fact, Airbnb invested $13 million in the platform in 2017 and integrated the reservation system with its own booking site. A merger with Resy would safeguard Airbnb against competitors like Booking Hotels, which acquired OpenTable in 2014, but Airbnb may also look to flight booking platforms for future growth.