In a significant move to expand its footprint in the United States, Indian hospitality giant OYO has announced its acquisition of the iconic budget hotel chain Motel 6. The deal, valued at ₹4,400 crore (approximately $525 million), is set to be an all-cash transaction and is expected to close by the end of 2024.
Motel 6, along with its extended-stay brand Studio 6, operates nearly 1,500 hotels across the United States and Canada. The acquisition from Blackstone Real Estate marks OYO’s largest purchase to date and is a strategic effort to strengthen its presence in the North American market.
Strategic Expansion of OYO
OYO, which has been steadily growing its portfolio in the US since its launch in the region in 2019, currently operates over 320 hotels across 35 states. The company added nearly 100 hotels to its US portfolio in 2023 and aims to add about 250 more in 2024. This acquisition will significantly bolster OYO’s market position and enhance its service offerings.
Leadership Insights
Gautam Swaroop, CEO of OYO International, expressed his enthusiasm about the acquisition, stating, “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”.
Julie Arrowsmith, CEO of G6 Hospitality, the parent company of Motel 6, added, “OYO’s innovative approach to hospitality will allow us to enhance our offerings and add great value to our guests while maintaining the iconic Motel 6 brand that travelers have trusted for over six decades”.
Financial and Operational Impact
Blackstone’s ownership, invested significant capital to enhance the Motel 6 brand, transforming it into a leading asset-light lodging company. The franchise network generates gross room revenues of $1.7 billion, providing a strong fee base and cash flow. OYO plans to leverage its comprehensive technology suite, global distribution network, and marketing expertise to further strengthen the Motel 6 and Studio 6 brands and drive continued financial growth1.
This acquisition underscores OYO’s commitment to expanding its global footprint and enhancing its service offerings, positioning itself as a formidable player in the international hospitality industry.
