Hotel Tonight, a Last-Minute Travel App

Way back in the mists of time—before the age of Expedia and Priceline —people called to make hotel reservations. Now the act of booking a room may be moving back to the phone. In the past year, reservations via mobile apps have jumped from 3 percent to 10 percent of all bookings made through online travel agencies, websites such as Expedia and Priceline report. About half of those happen on the same day as the hotel stay. The evidence suggests there’s a new breed of traveler who waits until the last minute to book a bed.

The San Francisco startup Hotel Tonight has encouraged this trend. Its free iPhone app, which has been downloaded more than a million times since it was introduced in January, features only-that-night listings for hotel rooms in 28 American cities. “Our customers are high-quality smartphone users who have usually never stayed at the hotels they book in,” says Sam Shank, Hotel Tonight’s co-founder and chief executive officer. “This is not the beer cooler crowd.” The company recently got some new funding—venture firm Battery Ventures led a $9 million investment—and also acquired some new competitors. Over the past few months, both Priceline and Expedia have added tonight-only booking features to their mobile apps.