The low end of the accommodation reservation and online booking industry has gone through a consolidation over the years and one player, Dublin-based Web Reservations International, has emerged as the big rollup shop in the sector.

WRI, which already owns Hostelworld and Hostels.com, has now acquired London-based HostelBookers. It was an all-stock deal, and still needs regulatory approval to clear. Terms of the deal were not disclosed.

The acquisition pairs two of the dominant players in the hostel sector, although Booking.com in the past few years has been adding lots of budget and apartment hotels, as well as hostels, to its roster.

WRI is owned by private equity firm Hellman and Friedman, which acquired it in 2009, and hence has the backing to keep buying up smaller players in the sector. The equivalent to WRI would be HomeAway, in a parallel sector of vacation rentals, which has over the years consolidated lots of players in the rentals market to reach scale.

WRI says it has about 35,000 properties in 180 countries. And some of the language in the sale release gives a hint of what it plans:

‘To compete head-to-head with the “big beasts”, like Expedia and Booking.com, we need to invest. The capacity to inject more resources into online marketing and technology is absolutely key to this sector, and our increase in scale will enable us to ramp that activity up in the face of some very large and dominant competitors.

 

‘We want to provide a service that both competes head to-head with the large online travel agents, and retains the personal service and sector knowledge that comes from being a smaller, budget-focused player – meeting the needs of hostels, B&Bs and smaller hotels, and providing enhanced service to our customers and partners.’

Launched in 2004, London-based HostelBookers hadn’t raised any venture money to date. It offers some 20,000 hostels, apartments, and budget hotels in 3,500 markets, and employs about 120 people.

Tom Meyers, the editor of budget-hotel comparison site EuroCheapo, notes that HostelBookers makes claims that its rates are lower than Hostelworld’s for the same properties.

If HostelBookers remains a separate brand, it will be interesting to see if rate parity ensues, Meyers says.

“It would make price comparison less interesting,” Meyers says.