Sam Shank and HotelTonight had a significant impact on the travel industry's competitive landscape. We picked 15 pivotal events that helped to define Shank's legacy as co-founder and CEO as he embarks for a new journey elsewhere.
HotelTonight co-founder and CEO Sam Shank, who steered the hotel booking app even after it was acquired by Airbnb in 2019, recently announced he would be leaving the short-term rental giant. Shank wrote on his LinkedIn account that he would take some time before making plans for a future outside of the travel industry.
So Skift is looking back at Shank’s time at the helm of HotelTonight, which he co-founded in 2010, through articles documenting 15 key moments in the San Francisco-based company’s history, including securing $3.25 million in funding, launching service in London, expanding to a 100-day booking window, debuting a desktop service, and being acquired by Airbnb.
London represented the first market HotelTonight served outside of the U.S. and Canada. And Shank said the company had plans to expand elsewhere in the United Kingdom as well as other destinations in Western Europe.
HotelTonight announced in December 2012 it was offering same-day hotel bookings in Paris, Nice, Brussels, Mexico City and Acapulco. That represented the company’s first foray in continental Europe after launching in UK that June. HotelTonight also announced it would make new versions of its app available in French, German, Italian and Spanish.
HotelTonight’s landing $45 million in funding was another sign of growing investor interest in mobile booking. The company had raised $80 million up to that point. Shank, who described that round as very validating, said HotelTonight planned to double to staff to around 200 employees over the next year as well expand further in the U.S. and internationally.
Starwood founder Barry Sternlicht becoming an investor in HotelTonight served as a sign of the hotel app’s coming of age. Shank didn’t disclose how much Sternlicht invested in HotelTonight, but said it was a significant amount. Shank added that Sternlicht would provide HotelTonight with advice on the hotel booking experience as well as matters pertaining to the app’s operations.
Despite possibly having a valuation of $320 million, HotelTonight faced challenges approaching its fifth anniversary in December 2015. Although a majority of hoteliers interviewed by Skift complimented the company on its ability to efficiently sell rooms at the last-minute, others noted HotelTonight still needed to improve amid competition from Booking.com and other major online travel agencies.
Although Shank said HotelTonight had grown 100 percent in booking volume in 2015, the company announced in November of that year it was laying off 37 employees, roughly 20 percent of its workforce. Shank described the decision as agonizing, but said it was a necessary step for the company in the long term.
HotelTonight put itself up for sale in December 2015 after it had laid off 20 percent of its staff the previous month. Those layoffs may have been part of HotelTonight’s strategy to get out of the red and make a sale more attractive to a potential buyer. However, Shank denied that HotelTonight was actively trying to sell itself.
Shank admitted in February 2016, after downplaying its challenges despite laying off 37 employees, that HotelTonight had been overly focused on growth instead of profitability. He added that HotelTonight should have conducted what he described as difficult discussions with hotels about their margins sooner.
HotelTonight finally became profitable in April 2016, with Shank noting that the company was on track to double its revenue that year. However, analysts cast doubt on whether HotelTonight would be able to accomplish its goal of going public.
HotelTonight announced beginning in October 2017, it would expand its booking window from seven days to 100 days. The move put HotelTonight in direct competition with major brands in online travel sales, including Expedia, the Priceline Group and Ctrip. Shank said HotelTonight would thrive amid fierce competition from the travel industry’s behemoths, citing his company’s growth as a reason for his optimism.
HotelTonight debuted its desktop version in 2017, a move that had been predicted by Kayak CEO Steve Hafner the previous year. Although Shank had long resisted the need for HotelTonight to appear in desktop browsers, and was one of the first mobile-only travel apps, one drawback is it had not been able to advertise on the desktop version of Google’s price comparison feature. He said the move would make come of the the company’s marketing more efficient.
Airbnb conducted informal talks with HotelTonight about buying the hotel booking company, which Shank wouldn’t confirm. However, Kayaks’ Hafner said he wasn’t surprised Airbnb inquired about purchasing HotelTonight, citing Airbnb’s interest in adding more hotels to its platform.
Airbnb confirmed in March 2019 that it would acquire HotelTonight in a deal that sources told Skift was $400 million-plus in cash and stock. Airbnb said in a press statement that it would maintain the HotelTonight app and website, and Shank would become head of HotelTonight’s boutique hotel category.
Shank said at Skift Global Forum in 2019 that the strategy for the two companies, following Airbnb’s acquisition of HotelTonight, would be to let the two brands co-exist. He cited HotelTonight’s differentiated approach from Airbnb, referencing that HotelTonight only offered hotels as well as its focus on consumers booking last minute travel, as reasons for his confidence.
Airbnb’s record-setting initial public offering on December 10, 2020 had to be a very happy moment for HotelTonight investors, who were partially paid in Airbnb stock. saw the value of its stock in HotelTonight more than double. With a private valuation of around $18 billion during the beginning of the pandemic, Airbnb’s market cap flirted with the $100 billion mark on its first two days of trading. Roughly half of the $400 million deal to purchase HotelTonight was in stock.
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Photo credit: Sam Shank speaking at the Skift Global Forum in New York City on October 9, 2014. He recently stepped down as head of the Airbnb commercial team. Skift