Budget hotel chain Motel 6 has been acquired by Indian travel agency Oyo. In a statement last week, the property's parent company, Blackstone, described the multimillion-dollar sale. “The all-cash transaction is valued at $525 million and is expected to close by the end of the year,” the company said in its statement. As part of the multimillion-dollar deal, the company will also sell its Studio 6 brand, its extended-stay hotel chain.
NPR notes that “the sale comes as the U.S. hotel industry continues to recover from the pandemic.”
OYO has been steadily expanding its presence in the US since launching 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 approximately 250 hotels in 2024. The Motel 6 franchise network generates gross revenue of $1.7 billion, which provides a strong expense 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 start-up like ours, which is looking to strengthen its international presence. Motel 6’s strong brand awareness, financial profile and network in the US, coupled with OYO’s entrepreneurial spirit, will help chart a sustainable path for the company, which will continue to operate as a separate entity,” said Gautam Swaroop, CEO, OYO International.
Under his ownership, Blackstone has invested significant capital to create value and enhance the Motel 6 brand, including executing a strategy to transform the company into a leading light lodging company with a franchise network of approximately 1,500 hotels in the United States and Canada.
Motel 6 was founded in 1962 in Santa Barbara, California, and has become an indelible part of America for its basic accommodations. The name Motel 6 originally came from the company's offer of a $6 per night cash rate. Motel 6 and Studio 6 currently have about 1,500 hotels in the United States and Canada. Blackstone purchased Motel 6 in 2012 for $1.9 billion.
