There was a rather sharp intake of breath in many quarters recently when global budget stay brand HostelWorld announced its intention to snap up arch rival Hostelbookers.
The Ireland-based HostelWorld pretty much tightened its already firm grip on the online hostel booking marketplace even further with its intention (subject to regulatory clearance) to buy Hostelbookers for an undisclosed fee.
Public comments and private back-channels were awash with concerns for both budget accommodation owners and consumers as a result of the two largest players in the market coming together.
One particular worry focused on the fate of many of the newbies in the sector trying to gain a foothold.
Although the deal has yet to be ratified and no-one really knows how the marketplace will react to what some consider to be the equivalent of budget accommodation-focused Booking.com lording over the sector, one of the more high profile startups on the scene has come out in favour of the move.
Co-founder and CEO of WeHostels (formerly Inbed.me - TLabs here), Diego Saez-Gil, says the deal "validates the huge opportunity that exists in the budget accommodations market".
"Because since we are partners with HW [a HostelWorld affiliate] it means that now we will be able to offer an even larger inventory of properties to our mobile users.
Saez-Gil argues that the so-called "big guys (Priceline, Expedia)" have always focused on the other, more expensive end of the inventory, which is essentially less fragmented and more profitable.
WeHostels also uses the Expedia Affiliate Network for some of its inventory.
But he believes such players are "starting to realize that there is a huge blue ocean market in the budget travelers that search for value accommodations and travel services".
"We believe that there is a lot of room for growth for everyone."
The opportunity, Saez-Gil believes, rests in the world of mobile travel - the area in which WeHostels operates with its booking service for hostels around the world.
"Our focus will continue to be on mobile services which we believe will represent the majority of bookings in coming years."
Perhaps Saez-Gil is right and this is indeed where the land-grab for business will take place in the next wave of growth in the budget sector - although, of course, it wouldn't take much for the new HostelWorld/Hostebookers mega-brand to gradually let some of its affiliate relationships run out if some of the more successful startups start getting too much headway.
Meanwhile, against this backdrop of consolidation and changes to the way travellers are expected to buy their budget accommodation (i.e. via handset), WeHostels is looking to expand into new markets.
First up is Europe, where the mobile-only brand will be launching with two new currencies (UK pounds and the Euro) and in four languages (German, French, Spanish and Portuguese) shortly.
Saez-Gil says:
"We've seen a big growth in Europe without having done much marketing efforts in the region.
"However we encountered that users were starting to complain about the fact that our app was only in English and we only showed the rates in US Dollars.
"The big challenge with expending international is that you have to understand the local culture when it comes to doing marketing, community management and customer support."
WeHostels has enlisted the help of existing investor German Ventures to help out, gaining some logistical support as well as additional cash and services, including an office in Munich.