In a significant move, Oyo, the Indian hotel operator, has acquired Motel 6, the iconic American budget hotel chain, from private equity giant Blackstone for a cool $525 million in cash. This deal marks a major milestone for Oyo as it expands its footprint in the US market, adding roughly 1,450 hotels across 49 states and five Canadian provinces to its portfolio.
Founded in 1962 in Santa Barbara, California, Motel 6 has been a staple for budget-conscious travelers for decades. Its name, a nod to its original $6-per-night rate, has become synonymous with affordable accommodations. Under Blackstone’s ownership since 2012, the brand has witnessed substantial growth and profitability. Rob Harper, head of Blackstone Real Estate Asset Management Americas, highlighted the success of their investment, stating that it had “generated over $1 billion in profit” during their tenure.
For Oyo, which entered the US market in 2019, this acquisition is a strategic game-changer. The company, already operating over 320 hotels across 35 states, plans to add another 250 this year. Gautam Swaroop, CEO of Oyo International, expressed his excitement about the acquisition, highlighting Motel 6’s strong brand recognition, financial profile, and extensive network in the US. He stated, “This acquisition is a significant milestone for a startup company like us to strengthen our international presence.”
Oyo, backed by Masayoshi Son’s SoftBank Group, has been making waves in the hotel industry, but its rapid expansion has also faced some controversy. Despite this, the company sees the acquisition of Motel 6 as a key driver for its growth strategy. Oyo plans to operate Motel 6 as a separate entity, maintaining the brand’s identity while leveraging its technology-driven approach and extensive network.
This transaction reflects the ongoing consolidation in the hotel industry. With budget-conscious travelers seeking out affordable accommodations, the combination of Oyo’s technology-driven approach and Motel 6’s established brand could significantly reshape the landscape of economy lodging in North America.
