Indian Travel Company OYO Buys Budget Hotel Chain Motel 6 for $525 Million
- The sale, which is a significant milestone for the startup company, comes as the U.S. hotel industry continues to recover post-pandemic.
Budget hotel chain Motel 6 has been acquired by Indian travel company Oyo. In a statement released last week, the motel’s parent company, Blackstone, outlined the multi-million dollar sale. The “all-cash transaction” totals $525 million, and is expected to be completed by the end of this year,” the company statement said. As part of the multimillion-dollar transaction, the company will also sell its Studio 6 brand, its chain of extended-stay hotels.
NPR notes that “the sale of comes as the U.S. hotel industry continues to recover post-pandemic.”
OYO has steadily expanded its footprint in the United States since its launch in the region in 2019 and currently operates over 320 hotels across 35 states. In 2023, OYO added nearly 100 hotels to its US portfolio and aims to add ~250 hotels in 2024. 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.
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.
Motel 6 was founded in 1962 in Santa Barbara, California, and has been an indelible part of Americana for its basic accommodations. The Motel 6 name originally came from the company’s offering of an all-cash $6-a-night rate. Motel 6 and Studio 6 currently have roughly 1,500 hotels across the United States and Canada. Blackstone purchased Motel 6 in 2012 for $1.9 billion.