Why Priceline Has Passed On Hotel Tonight—So Far

In late 2015, Priceline held discussions with Hotel Tonight about possibly buying the smaller hotel-booking rival. Executives at Priceline liked the startup’s young, affluent user base and boutique hotel selection. But Hotel Tonight was on pace to lose $37 million that year on revenue of just $33 million. Priceline executives didn’t believe Hotel Tonight could better keep costs in check while rapidly growing its customer base.

“After looking at the numbers, [Priceline] couldn’t see scalability at play,” says a person involved in the talks, which haven’t been previously reported.

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“I don’t mind telling you, we have very little awareness compared to our more entrenched competitive set, which are all household names. They’ve spent heaps of money and decades getting there,” Mr. Elias says. “I don’t think 2017 is the year of us being ubiquitous, but where it makes sense for us to resonate best, that’s where we’ll be.”

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