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Figure It Out When You Get There, Says Hotel Booking App

Sam Shank, CEO and co-founder of HotelTonight
David Paul Morris | Bloomberg | Getty Images
Sam Shank, CEO and co-founder of HotelTonight

Is planning a trip just too much hassle? One online travel booker instructs you to just go—you'll find accommodation at your destination through its mobile app after you arrive.

In fact, you can't book in advance with HotelTonight. Properties make rooms available for sale on the app only at noon of the booking day.

While its obvious use may be for those marooned by weather or a canceled flight, HotelTonight's focus is on "inspiring people to be more spontaneous and create a primary demand for the industry and hotels," CEO Sam Shank told CNBC's "Squawk Box."

That is, he doesn't want the service to be seen as cannibalizing but complementing other hotel business.

"These are people who would have stayed home or returned home," Shank said. "They have a tool to get a great hotel at a great, phenomenal, last-minute rate."

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The free app, for both iOS and Android devices, features hotels at 100 destinations in 12 countries across North America and Europe, according to a spokesperson for HotelTonight. Downloads for the app, which launched in January 2011, have tripled in the past year, to 6 million.

The San Francisco-based company has raised $35.9 million in funding with partners that include U.S. Venture Partners, Accel Partners, Battery Ventures and First Round Capital.

A midweek search for listings in New York found them running from $100 (marked down from $160) for a "Basic" in Brooklyn to $645 (down from $675) for a "Luxe" in lower Manhattan. Other category tags are "Hip," "Charming" and "Solid." Most rooms were in the $250 to $350 range, although a notice cited unusually high prices because of a large expo.

HotelTonight is unlike those online bookers offering so-called opaque deals, Shank said. "You know the name, where it's located. You know the amenities. You can see the bar. You don't want to book an opaque hotel on a service like Priceline or [Expedia's] Hotwire and find out it's ... much further away than expected."

Other power players in online travel booking include Orbitz and TripAdvisor. Expedia dominates the U.S. market, with a 43 percent share, though its stock is down about 2 percent this year. CEO Dara Khosrowshahi recently noted a slowdown in the U.S. for Hotwire but rapid growth overseas.

HotelTonight differentiates itself with its 11th-hour offers and mobile-only strategy. It takes advantage of the fact that hotels rarely sell out and in fact generally run at 60 percent occupancy.

There are always rooms for sale, Shank said.

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Always? Though many might worry about finding there's no lodging available if they take off on the spur of the moment, Shank said, "Even at the Super Bowl in New Orleans, we had the only hotel rooms in town. They were expensive. They sold in 20 minutes."

Shank said the app serves consumers' increasing demand for immediate service.

"We look at ourselves as on-demand, push a button and get shelter. That's how the world is moving. With Uber you push a button and get a car, with GrubHub you push a button and you get food. With us you push a button and you get a place to stay. We're the app for on-demand shelter."

By CNBC's Matt Twomey. Follow him on Twitter @Matt_Twomey.

Technology