The rest of the travel industry -- or at least the big players that matter -- have caught up to HotelTonight, the first mover in the same-day mobile hotel-booking space. Heavily funded, HotelTonight is seeking an exit that makes its investors whole.
HotelTonight has put itself up for sale, according to a source who has knowledge of the circulation of the company’s profit and loss statements and presumably other financials being shown to potential acquirers.
It isn’t known whether HotelTonight has hired bankers or whether the process is of a less formal nature.
The move takes place following the news last month that HotelTonight, a mobile-only last-minute booking app launched five years ago, layed off 20 percent of its staff, or 37 employees.
[Update: A majority of the layoffs were to the sales/account manager staff, a very labor-intensive portion of the business, according to a source.]
With $81 million in funding and a valuation in the $320 million range, HotelTonight was a first-mover in same-day mobile hotel bookings but subsequently expanded into bookings as much as seven days in advance because the same-day space was a limited one. In the past five years, numerous rivals, including Booking.com, debuted their own same-day or last-minute hotel-booking apps.
Despite the layoffs, HotelTonight CEO Sam Shank won’t concede an inch and maintains that nothing has changed about what he characterizes as the startup’s healthy prospects. In August, Shank projected some 100 percent growth year over year in HotelTonight’s gross bookings for 2015, and said following the November layoffs that they were geared to position the company for long-term growth.
Nothing has changed since August regarding HotelTonight’s trajectory, Shank said.
When asked December 2 about HotelTonight being up for sale, Shank denied it.
“We are not actively seeking to sell HotelTonight,” Shank told Skift. “We have responded to offers to partner in the past, but chose to remain fully independent. Meanwhile, it’s all systems go over here as we are on track to hit profitability next year.”
The layoffs in November may have been geared to stem losses and to put HotelTonight into the position of getting out of the red, and making a sale more attractive to a potential buyer.
Although not confirmed, it would be totally reasonable to assume that two of the most-active buyers in the travel industry, the Priceline Group and Expedia Inc., and others could be assessing whether acquiring HotelTonight would be a worthy deal considering the lofty valuation.
Despite its competitive challenges, HotelTonight certainly fields an elegant mobile app and often offers attractive rates to consumers that are difficult to find elsewhere. Independent hoteliers express satisfaction with the distribution they are getting through the app.
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Photo credit: HotelTonight is looking for an exit now that the competition, with ample marketing power, has caught up. Pictured is the HotelTonight smartphone app. HotelTonight