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 Europe-focused companies is the latest in a flurry of activity around mobile apps that offer last-minute hotel reservations.
Hotel Tonight raised $45 million in funding earlier this month, and Groupon (GRPN) followed by announcing that it had acquired Blink. Hot Hotels’ move to snap up ReallyLateBooking seems an attempt to keep pace, and it strongly indicates 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 Chief Executive Officer Conor O’Connor in a press release. Still, that was Groupon’s motivation in grabbing Blink, which also focuses on Europe. Hotel Tonight, meanwhile, has said it will spend a good portion of its enhanced war chest on extending its reach in Europe, where it already does 20 percent to 25 percent of its business.
While they pitch primarily to travelers, Hot Hotels, Blink, and Hotel Tonight will have to win over the hotels. Last-minute-reservation apps are disrupting an industry that sees both potential and danger in the shift, as Bloomberg 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.”
On the other hand, the recent activity might offer hotels some relief: Consolidation probably means that several viable companies will be competing for their favors.