It may be time to set off on an unplanned European vacation. Hot Hotels said it would acquire ReallyLateBooking, and Wednesday’s deal between the two European-focused companies marks the latest in what has been a flurry of recent activity around mobile apps that offer last-minute hotel reservations.
Hotel Tonight raised $45 million in funding earlier this month, and Groupon followed suit by announcing that it had acquired Blink. The move to snap up ReallyLateBooking seems like an attempt to keep pace—and a strong indication that the fight for last-minute reservation dominance in the coming months will be a Continental affair.
“This acquisition will make Hot Hotels the undisputed leader of last-minute mobile hotel booking in Europe,” said CEO Conor O’Connor. Of course, that was the motivation by Groupon’s grab of Blink, which also focuses on Europe. Hotel Tonight, meanwhile, has said that it will spend a good portion of its new war chest on extending its reach in Europe, where it already does 20 to 25 percent of its business.
While they’re pitching themselves primarily to travelers, Hot Hotels, Blink, and Hotel Tonight will all have to win over the hotels. The last-minute-reservation apps are disrupting an industry that sees both potential and danger in the shift, as Businessweek explained earlier this month:
The hotel industry is torn over this last-minute booking trend. On the one hand, mobile booking is likely to make up a significant proportion of business, and last-minute deals also help rent out rooms that would otherwise sit empty. But the move to mobile also probably means that a greater proportion of sales will be filtered through an intermediary that will take a cut. The hotel industry will pay $7.5 billion in commissions (PDF) to businesses helping sell hotel rooms in 2015, up from $3.8 billion in 2010, according to a report done last year by the American Hotel & Lodging Association and Smith Travel Research. These dues are going largely to travel-tech companies.
Still, all the recent activity probably offers hotels some sense of relief: consolidation will likely mean there are several viable companies competing for their favors.
