OYO acquires 62-year-old American hotel chain Motel 6 for Rs 4,400 crore

Ritesh Agarwal-led OYO is acquiring G6 Hospitality, which owns and operates the iconic American hotel chain Motel 6 and Studio 6, in an all-cash deal valued at $525 million (approximately Rs 4,400 crore).

OYO parent Oravel Stays is buying this company from Blackstone Real Estate, a real estate investment firm owned by Blackstone Inc.

This marks OYO’s second major acquisition, following its purchase of Paris-based Checkmyguest for over $27 million.

The transaction is expected to close by the fourth quarter of 2024.

Ritesh Agarwal-led OYO is acquiring G6 Hospitality, which owns and operates the iconic American hotel chain Motel 6 and Studio 6, in an all-cash deal valued at $525 million (approximately Rs 4,400 crore).

OYO parent Oravel Stays is buying this company from Blackstone Real Estate, a real estate investment firm owned by Blackstone Inc.

This marks OYO’s second major acquisition, following its purchase of Paris-based Checkmyguest for over $27 million.

The transaction is expected to close by the fourth quarter of 2024.

OYO's presence in the American market

OYO first entered the U.S. market in 2019 and has steadily expanded its footprint to include more than 320 hotels across 35 states.

In 2023, the Ritesh Agarwal-led traveltech giant added nearly 100 hotels to its US portfolio and aims to add ~250 hotels in 2024.

Leveraging technology to strengthen Motel 6, Studio 6

According to a statement shared by Blackstone, Motel 6’s franchise network produces gross room revenues of $1.7 billion, which generates a strong fee base and cash flow for G6.

OYO will leverage its comprehensive technology suite as well as its global distribution network and marketing expertise to further strengthen the Motel 6 and Studio 6 brands and drive continued financial growth.

“This acquisition is a significant milestone for a startup company like us to strengthen our international presence. Motel 6’s strong brand recognition, financial profile and network in the US, combined with OYO’s entrepreneurial spirit, will be instrumental in charting a sustainable path forward for the company, which will continue to operate as a separate entity,” said Gautam Swaroop, CEO, OYO International.

G6 Hospitality's market presence

G6 Hospitality has a strong presence in the economy lodging sector, with nearly 1,500 locations across the United States and Canada.

Motel 6, which was founded in 1962, operates in over 1,450 locations, while Studio 6, known for its extended-stay options, has more than 200 properties in key markets such as Atlanta, Dallas, Houston, Seattle and Canada.

“We are grateful for our successful partnership with Blackstone and the transformation that has positioned us well for this new chapter. OYO’s innovative approach to hospitality will allow us to enhance our offerings and great value to our guests while maintaining the iconic Motel 6 brand that travelers have trusted for over six decades," said Julie Arrowsmith, President and Chief Executive Officer at G6 Hospitality.

Blackstone's investment in G6 Hospitality

Blackstone Real Estate acquired the Motel 6 and Studio 6 brands from French hotel company Accor in 2012 for $1.9 billion. 

Under its ownership, Blackstone invested significant capital to create value and enhance the Motel 6 brand, including executing a strategy to transform the business into a leading asset-light lodging company with a franchise network of ~1500 hotels across the United States and Canada.

“This transaction is a terrific outcome for investors and is the culmination of an ambitious business plan that more than tripled our investors’ capital and generated over $1 billion in profit over our hold period," said Rob Harper, Head of Blackstone Real Estate Asset Management Americas.