Oyo Hotels Acquires Motel 6 in Major Deal
In a significant development in the hospitality industry, Indian budget hotel startup Oyo has announced its acquisition of Motel 6, a leading American budget hotel chain. The deal, valued at $525 million, is an all-cash transaction that includes Motel 6’s subsidiary, Studio 6. This acquisition marks a pivotal moment for Oyo, further establishing its footprint in the competitive U.S. market.
Details of the Acquisition
Blackstone, the private equity firm that owns G6 Hospitality — the operator of Motel 6 — has confirmed the agreement to sell the brand to Oyo Hotels. The deal is anticipated to close by the end of this calendar year, according to reports from The New York Times.
Oyo’s Growth in the United States
Since its entry into the U.S. market in 2019, Oyo has been on an aggressive expansion trajectory. Currently, Oyo manages approximately 320 hotels across 35 states in the U.S. In 2023 alone, the company added about 100 hotels to its portfolio, with plans to increase this number by 250 in 2024. The acquisition of Motel 6 will undoubtedly bolster Oyo’s existing presence and enhance its ability to compete in the budget hotel segment.
Strategic Advantages
Oyo will harness its advanced technology platform, comprehensive distribution network, and robust marketing strategies to evolve the Motel 6 and Studio 6 brands. This approach aims to drive innovation, improve guest experiences, and ensure long-term financial viability.
CEO Gautam Swarup’s Vision
Gautam Swarup, CEO of Ovo International, expressed his enthusiasm regarding the acquisition, stating, “This acquisition is an important milestone for a startup like us in strengthening our international presence. Motel 6’s strong brand recognition, financial profile, and network in the U.S., combined with OYO’s entrepreneurial spirit, will help create a sustainable path forward for the company.”
Advisors Involved in the Deal
The acquisition was supported by a team of financial and legal advisors. Goldman Sachs & Co. LLC served as the lead advisor to Blackstone, while Jones Lang LaSalle Securities, LLC, and PJT Partners acted as additional financial advisors. Legal representation for Blackstone was provided by Simpson Thacher & Bartlett LLP.
The Future of Oyo and Motel 6
This acquisition represents a transformative opportunity for Oyo, enabling it to tap into Motel 6’s established customer base and brand loyalty. As Oyo continues to expand, it is well-positioned to redefine the budget hospitality landscape in America and beyond.
