Oyo parent acquires G6 Hospitality for $525M

NEW DELHI, DALLAS — Oravel Stays, the parent company of New Delhi-based travel technology company Oyo, has agreed to acquire G6 Hospitality, the parent company of the Motel 6 and Studio 6 brands, from Blackstone Real Estate for $525 million in an all-cash transaction. Oyo will reportedly operate G6, with almost 1,500 Motel 6 and 200-plus Studio 6 properties in the U.S. and Canada, as a separate entity.

Motel 6 was launched in 1962 with a property in Santa Barbara, California, charging $6 per night. In 2012, Blackstone acquired the brand from Accor as part of a $1.9 billion deal.

Troubled Oyo has been the subject of multiple lawsuits by its franchisees and for years now has been trying to tap the public market. It said it has 40-plus integrated products and solutions for patrons who operate over 175,000 hotel and home storefronts in more than 35 countries, including India, Europe and Southeast Asia. It has been expanding its footprint in the U.S. since 2019 and currently operates some 320 hotels across 35 states. Last year, the company added nearly 100 hotels to its U.S. portfolio and aimed to add around 250 more hotels in 2024.

According to a news release, Motel 6’s franchise network produces gross room revenues of $1.7 billion, which generates a strong fee base and cash flow for G6. Oyo said it plans to further leverage its technology suite, global distribution network, and marketing expertise to strengthen the Motel 6 and Studio 6 brands and drive continued financial growth.

“This acquisition is a significant milestone for a startup company like us to strengthen our international presence,” said Oyo International CEO Gautam Swaroop. “Motel 6’s strong brand recognition, financial profile and network in the U.S., 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.”

Under its ownership of Carrolton, Texas-based G6 Hospitality, Blackstone invested significant capital in the Motel 6 brand, including an asset-light strategy with a franchise network in the U.S. and Canada. Today, about 1,500 locations are franchises with about 84% of those under the Motel 6 brand. There is a large and growing development pipeline.

“This transaction is a terrific outcome for investors and is the culmination of an ambitious business plan that more than tripled our investors’ capital and generated over $1 billion in profit over our hold period,” said Rob Harper, head of Blackstone Real Estate Asset Management Americas. “We believe G6 is extremely well-positioned for the future and we look forward to seeing its brands continue their success in the years to come.”

G6 Hospitality President and CEO Julie Arrowsmith added, “We are grateful for our successful partnership with Blackstone and the transformation that has positioned us well for this new chapter. Oyo’s innovative approach to hospitality will allow us to enhance our offerings and great value to our guests while maintaining the iconic Motel 6 brand that travelers have trusted for over six decades.”

The transaction is expected to close in the fourth quarter of 2024, subject to customary closing conditions. Goldman Sachs acted as Blackstone’s lead advisor, and JLL Securities and PJT Partners acted as financial advisors. Simpson Thacher & Bartlett served as Blackstone’s legal advisor.