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In a significant move to bolster its presence in the U.S. hospitality market, OYO, the India-based parent company of Oravel Stays, has announced its acquisition of G6 Hospitality,
In a significant move to bolster its presence in the U.S. hospitality market, OYO, the India-based parent company of Oravel Stays, has announced its acquisition of G6 Hospitality, the franchiser of the well-known Motel 6 and Studio 6 brands, for $525 million. This all-cash transaction, backed by Blackstone Real Estate, is expected to close in the fourth quarter of 2024, pending customary closing conditions.
Since its launch in the U.S. in 2019, OYO has steadily expanded its footprint, currently operating over 320 hotels across 35 states. With this acquisition, the company aims to further amplify its reach, adding around 250 additional hotels to its portfolio within the year. OYO plans to leverage its advanced technology, global distribution network, and marketing expertise to enhance the Motel 6 and Studio 6 brands, fostering sustainable financial growth.
Gautam Swaroop, CEO of OYO International, remarked, “This acquisition is a significant milestone for a startup company like us to strengthen our international presence.” He emphasized that the combination of Motel 6’s strong brand recognition and OYO’s entrepreneurial spirit will create a sustainable path forward for the company, which will continue to operate as a separate entity.
Motel 6’s franchise network boasts approximately 1,500 hotels across the U.S. and Canada, generating gross room revenues of $1.7 billion. This impressive financial profile provides G6 with a robust fee base and consistent cash flow, making it an attractive acquisition for OYO. Julie Arrowsmith, president and CEO of G6, expressed optimism about the acquisition, stating, “OYO’s innovative approach to hospitality will allow us to enhance our offerings and provide great value to our guests while maintaining the iconic Motel 6 brand that travelers have trusted for over six decades.”
Blackstone’s strategic investment in G6 over the years has focused on transforming the brand into an asset-light lodging company, allowing it to thrive in a competitive marketplace. Rob Harper, head of Blackstone Real Estate Asset Management Americas, noted that the transaction represents a culmination of a successful business plan that has more than tripled investors’ capital and generated over $1 billion in profits during Blackstone’s tenure.
OYO’s acquisition of G6 Hospitality positions the company to capitalize on the growing demand for affordable lodging options in the U.S. market. The hospitality sector is experiencing a resurgence, driven by increasing travel demand, and OYO aims to tap into this trend by enhancing the Motel 6 and Studio 6 brands.
By integrating OYO’s technology and marketing strategies with G6’s established franchise network, the company is well-equipped to elevate guest experiences and drive revenue growth. This synergy is expected to not only benefit the brands involved but also enhance overall competition in the budget accommodation segment.
The acquisition also reflects a broader trend in the hospitality industry, where strategic partnerships and investments are becoming essential for growth and innovation. In August, Blackstone Growth LP and AAHOA announced a definitive agreement to acquire a majority stake in M3 LLC, a hospitality accounting software firm. This partnership is aimed at providing significant benefits to AAHOA members and the hospitality industry as a whole.
Financial advisory support for the acquisition came from Goldman Sachs & Co. LLC, with Jones Lang LaSalle Securities, LLC, and PJT Partners also playing key advisory roles. Legal support was provided by Simpson Thacher & Bartlett LLP, ensuring that all aspects of the transaction were thoroughly managed.
OYO’s acquisition of G6 Hospitality marks a pivotal moment in its expansion strategy within the U.S. market. By acquiring well-known brands like Motel 6 and Studio 6, OYO not only strengthens its portfolio but also enhances its ability to compete in the budget hotel segment. As the hospitality industry continues to evolve, this move positions OYO favorably for future growth and innovation, solidifying its place as a key player in the global travel landscape.
