OYO to acquire popular US hotel chain for $525 million
Indian hospitality giant, OYO, has announced a significant move in its US expansion strategy. The company is set to acquire the renowned American budget hotel chains, Motel 6 and Studio 6. This acquisition from Blackstone Real Estate is valued at $525 million, and will be an all-cash transaction. The deal involves G6 Hospitality, the parent company of Motel 6 and Studio 6 brands.
Acquisition to boost its US presence
The acquisition is expected to be finalized in the fourth quarter of 2024, subject to standard closing conditions. Motel 6's franchise network generates gross room revenues of $1.7 billion, providing a robust fee base and cash flow for G6. The network includes approximately 1,500 locations across the US and Canada. This strategic move by OYO aims to bolster its presence in the American market, using its advanced technology suite and global distribution network.
Growth trajectory in the US
Since its inception in the US in 2019, OYO has been steadily increasing its market presence. The company currently operates over 320 hotels across 35 states. In 2023 alone, nearly 100 hotels were added to OYO's US portfolio. The firm plans to add about 250 more hotels in 2024, further solidifying its position in the American hospitality sector.
Acquisition marks significant milestone for OYO
Gautam Swaroop, CEO of OYO International, described the acquisition as a "significant milestone" for the company's global expansion. He highlighted Motel 6's strong brand recognition and network in the US as key factors in this strategic move. Julie Arrowsmith, CEO at G6 Hospitality, expressed confidence that OYO's innovative approach would enhance their offerings while maintaining the iconic Motel 6 brand, that travelers have trusted for over six decades.
