The two biggest players in the backpacker accommodation market are set to become one. Web Reservations International, owner of Hostelworld.com and Hostels.com, has agreed to buy rival HostelBookers.com, subject to regulatory approval. WRI’s Chief Executive, Feargal Mooney claimed such scale is necessary to compete with the ‘big beasts’ of the online travel world like Expedia and Booking.com.
“To compete head-to-head with the “big beasts”, like Expedia and Booking.com, we need to invest,” he said.
“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.
“The accommodation services sector is fiercely competitive. Indeed, the pace of change is such that the market today is unrecognisable from that which prevailed just 18 months ago.”
Mr Mooney further explained to the Financial Times: “The generalists are now in the budget sector.
“If you were to go back a number of years, most of the mainstream players focused on the luxury end of the market.
“We have much bigger players and much deeper pockets who have come and competed aggressively.”
Hence the compulsion for growth.
“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.”
Smaller, yes, but also a potential monopoly, at least in terms of positioning.