Airbnb & HotelTonight: the competition ratchets up a notch

Mar 14, 2019

With Airbnb’s acquisition of HotelTonight and the release of EyeforTravel’s latest white paper this week, hotel distribution is a hot topic and there are concerns

The big news in travel tech this month is that Airbnb has snapped up HotelTonight for an undisclosed sum. This is yet more proof that hotel distribution is in flux, as revealed by EyeforTravel’s recent white paper  – Dirty Distribution Tactics and How Hotels can Fight Back.

Commenting on the deal, which expands Airbnb’s offering to include hotel inventory, and HotelTonight’s to include vacation rentals, Gopakumar Menon, VP – Distribution & Revenue Management, Highgate Hotels, says: “This is Airbnb’s biggest push into the traditional hotel community, and justifies to investors, as it prepares for its IPO, that they are indeed an end-to-end travel site partner, catering to both long and short-stay guests.”

He adds: “HotelTonight has had 15 million app downloads in less than a decade, and has well-curated boutique hotels that Airbnb can tap into, especially as there are several markets now imposing regulatory compliance [on Airbnb]”.  

In the white paper Menon reveals some of the steps that Highgate is taking to get its distribution strategy on track, and the importance of rethinking partner relationships. Needless to say, Google is playing a crucial role with and to date, he says, “has probably been the only one making the independent hotel room relevant” – this with its Hotel Paid Ads product.

However, Airbnb’s latest move could change the game.  

Time for disruption

Rob Paterson, CEO of Best Western, who is speaking at the London Digital Strategy Summit, argues the Airbnb-HotelTonight deal, is good for hotels. “I see competition in the OTA space as positive for the industry and Airbnb have made it clear they’re willing to challenge existing commission structures. The time is ripe for disruption and they have the resources to challenge it.”

The time is ripe for disruption and they have the resources to challenge it

Rob Paterson, CEO of Best Western

Inderpreet Banga, Sr. Director, eDistribution & Wholesale Strategy, Wyndham Hotels & Resorts, agrees: “As Airbnb gets ready to IPO, this is a strategic move to show investors they are ready to go against Booking and Expedia.  Competition is great for the industry and the duopoly today controls 90% share of the OTA marketplace.”

However, the news is not all good! Banga continues:“On the other hand, no one in the hospitality industry are fans of Airbnb and the additional supply that had been added globally without any regulation, as all of hotels are subject to. Cities and countries are finally recognising the impact of Airbnb and unregulated vacation rentals and taking action but there still needs to be alignment globally.” 

From a brand’s perspective, and given Airbnb’s foray into assisting boutique and independent properties to go brand-lite, it could be a concern

Inderpreet Banga, Sr. Director, eDistribution & Wholesale Strategy, Wyndham Hotels & Resorts

In addition, he continues: “From a brand’s perspective and given Airbnb’s foray into assisting boutique and independent properties to go brand-lite, it could be a concern. If the technology continues to evolve, and is inexpensive or free to hotels from the large OTAs, the strategy could encroach into franchisor territory. Booking and Expedia just announced their preferred technology partner programmes, something that hotel brands typically have offered.  Is this something that Airbnb can offer with HotelTonight for hotels? Time will tell.”

On a lighter note, we always knew that HotelTonight was going places! Did you know that back in 2011, the online travel app for discounted hotel nights beat off stiff competition from Kayak, Gogobot (now Trip.com) and Hipmunk, no less, to win the EyeforTravel Innovation Award in Las Vegas. Since then, over 15 million people have downloaded the app to book last-minute hotel deals across the Americas, Europe and Australia.