Skift grip
Sam Shank and HotelTonight have had a significant impact on the competitive landscape of the travel industry. We’ve picked out 15 pivotal events that helped define Shank’s legacy as co-founder and CEO as he embarks on a new journey elsewhere.
Rashaad Jordan
HotelTonight co-founder and CEO Sam Shank, who ran the hotel booking app even after it was acquired by Airbnb in 2019, recently announced that he would leave the short-term rental giant. Shank wrote on his LinkedIn account that it would take some time before he made any plans for a future outside of the travel industry.
So Skift looks back on 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 winning a $3.25 million in funding, launching a service in London, expanding to a 100-day booking window, launching a desktop service, and being acquired by Airbnb.
1
HotelTonight expands to London
London was the first market served by HotelTonight outside of the United States and Canada. And Shank said the company intends to expand elsewhere in the UK as well as other destinations in Western Europe.
2
HotelTonight expands in Europe and Mexico and increases its language capabilities
HotelTonight announced in December 2012 that it offered same-day hotel reservations in Paris, Nice, Brussels, Mexico City and Acapulco. This represented the company’s first foray into continental Europe following its UK launch in June. HotelTonight has also announced that it will make new versions of its app available in French, German, Italian and Spanish.
3
HotelTonight secures $45 million in funding
HotelTonight’s $45 million funding was another sign of growing investor interest in mobile booking. The company had raised $80 million so far. Shank, who called this round very rewarding, said HotelTonight plans to double its headcount to about 200 employees over the next year and expand further in the United States and internationally.
4
Starwood founder Barry Sternlicht invests in HotelTonight
Signifying the maturity of the hotel app was Starwood founder Barry Sternlicht, who became an investor in HotelTonight. Shank did not reveal how much Sternlicht invested in HotelTonight, but said it was a significant amount. Shank added that Sternlicht will provide HotelTonight with guidance on the hotel booking experience as well as issues relating to app operations.
5
HotelTonight faces a crisis
Although it may have a valuation of $320 million, HotelTonight faced challenges as it approached its fifth anniversary in December 2015. Although a majority of hoteliers surveyed by Skift praised the company for its ability to effectively sell rooms at the last minute, others noted that HotelTonight still needed to improve in the face of competition from Booking.com and other major online travel agencies.
6
HotelTonight cuts 20% of its staff
Although Shank said HotelTonight increased its booking volume by 100% in 2015, the company announced in November of that year that it was laying off 37 employees, or about 20% of its workforce. Shank described the decision as agonizing, but said it was a necessary step for the long-term business.
seven
HotelTonight is for sale
HotelTonight went up for sale in December 2015 after laying off 20% of its staff the previous month. These 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.
8
HotelTonight has tough talks with hotels on the margins
Shank admitted in February 2016, after downplaying his challenges despite laying off 37 employees, that HotelTonight had focused too much on growth rather than profitability. He added that HotelTonight should have had earlier what he described as tough talks with hotels on their margins.
9
HotelTonight is finally turning profitable, but its chances of an IPO are slim
HotelTonight finally became profitable in April 2016, with Shank noting that the company was on track to double revenue that year. However, analysts have questioned HotelTonight’s ability to meet its IPO target.
ten
HotelTonight changes booking windows
HotelTonight announced from October 2017 that it would be extending its booking window from seven days to 100 days. The move put HotelTonight in direct competition with major online travel brands, including Expedia, Priceline Group and Ctrip. Shank said HotelTonight would thrive amid fierce competition from travel industry behemoths, citing his company’s growth as reason for his optimism.
11
HotelTonight launches desktop version
HotelTonight launched its desktop version in 2017, a move predicted by Kayak CEO Steve Hafner the year before. 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 downside was that it hadn’t been able to advertising on the desktop version of Google’s comparison shopping feature. He said the move would make the company’s marketing more efficient.
12
Airbnb discusses buying HotelTonight
Airbnb has been in informal talks with HotelTonight about buying the hotel reservations company, which Shank has not confirmed. However, Kayaks’ Hafner said he was not surprised Airbnb inquired about buying HotelTonight, citing Airbnb’s interest in adding more hotels to its platform.
13
Airbnb acquires HotelTonight
Airbnb confirmed in March 2019 that it would acquire HotelTonight in a deal that sources said was for more than $400 million in cash and stock. Airbnb said in a press release that it would maintain the HotelTonight app and website, and Shank would become HotelTonight’s boutique hotel category manager.
14
Shank says Airbnb won’t dilute HotelTonight brand
Shank told the Skift Global Forum in 2019 that the two companies’ strategy, following Airbnb’s acquisition of HotelTonight, would be to let the two brands co-exist. He cited HotelTonight’s differentiated approach to Airbnb, referring to HotelTonight’s only offering of hotels as well as its focus on consumers booking last-minute trips, as reasons for its trust.
15
HotelTonight investors see big gains on Airbnb going public
Airbnb’s record-breaking IPO on December 10, 2020 must have been a very happy moment for HotelTonight investors, who were partially paid in Airbnb stock. saw its stock value in HotelTonight more than double. With a private valuation of around $18 billion at the start of the pandemic, Airbnb’s market capitalization flirted with the $100 billion mark in its first two days of trading. About half of the $400 million deal to buy HotelTonight was in storage.
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