Skift Take

Does HotelTonight really provide incremental bookings without detracting from the hotels' own websites and apps? Several big hotel chains and Barry Sternlicht are now on board and apparently believe so. But, what happens down the road when the humble startup gets too powerful? That's something to consider, as well.

Starwood founder Barry Sternlicht has become an investor in, and a strategic advisor to, HotelTonight, signaling the tonight-only hotel app’s coming of age.

The last thing that the hotel industry thought it needed was another online or mobile travel agency to compete with, but Sternlicht’s investment, as well as HotelTonight’s first announcement of chain-wide partnerships with the likes of InterContinental, Hyatt, Best Western, Kimpton, Fairmont, La Quinta, Barcelo and Steigenberger, mean that HotelTonight no longer has trouble getting its sales calls answered from the hotel industry.

The key for HotelTonight, says CEO Sam Shank, was proving to the hotel industry that the same-day booking app could deliver incremental bookings, and can be used as a tool “only when they need us.”

Sternlicht, who is the founder and CEO of Starwood Capital Group and created W Hotels during his previous tenure as Starwood Hotels CEO, says HotelTonight is well-situated because booking windows are shortening, and everything is going mobile.

“But, there’s something more that attracted me: it’s that HotelTonight is proving booking by booking that both hotels and distributors can win,” Sternlicht says.

Prior to Sternlicht’s investment, HotelTonight reported last Fall that its total funding was $80.35 million.

HotelTonight isn’t disclosing how much Sternlicht invested. “It is a large investment for an individual,” Shank says. “It is significant.”

Shank expects Sternlicht to put in “one to two hours per month” on HotelTonight work, offering advice on the hotel booking experience, as well as the design and overall “vibe of the app.”

Sternlicht has already helped HotelTonight open some doors with hotel chains, Shank says, adding that his investment is “a really nice credibility message.”

Regarding the bevy of new chain relationships, HotelTonight COO Jared Simon says they will improve availabilities for travelers.

“In addition to working out business terms, a partnership to us means we have clearly specified all operational details of the relationship to ensure everything runs smoothly at the hotel, no matter what the circumstance,” Simon says.

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Tags: hoteltonight, investors, partnerships

Photo credit: Barry Sternlicht, the founder of Starwood Hotels and current CEO of Starwood Capital Group, has made a personal investment in HotelTonight. Starwood Capital Group

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