OYO Expands U.S. Presence with $525 Million Acquisition of G6 Hospitality

OYO, the parent company of Oravel Stays, has announced a significant acquisition of G6 Hospitality, the franchisor behind the well-known Motel 6 and Studio 6 brands, from Blackstone Real Estate for $525 million in an all-cash deal. This strategic move marks a pivotal step in OYO’s expansion within the U.S. hospitality market.

Key Points of the Deal:

– Strategic Acquisition: The acquisition of G6 Hospitality is expected to enhance OYO’s footprint in the United States, where it has been growing since its entry in 2019. Currently, OYO operates over 320 hotels across 35 states and plans to add approximately 250 more hotels in 2024.

– Financial Strength: Motel 6’s franchise network generates gross room revenues of $1.7 billion, providing a robust fee base and cash flow for G6. This financial strength will be leveraged by OYO to drive growth and enhance brand value.

– Technological Integration: OYO plans to utilize its advanced technology suite and global distribution network to bolster the Motel 6 and Studio 6 brands. This integration aims to improve operational efficiency and marketing effectiveness.

– Leadership Insights: Gautam Swaroop, CEO of OYO International, emphasized that this acquisition represents a significant milestone for the company, enhancing its international presence while maintaining Motel 6 as a separate entity. He noted that the brand’s strong recognition and financial profile will be crucial for future growth.

– Blackstone’s Role: Under Blackstone’s ownership, G6 Hospitality underwent substantial investment aimed at transforming its business model into an asset-light lodging company with around 1,500 hotels across the U.S. and Canada. Julie Arrowsmith, President and CEO of G6 Hospitality, acknowledged Blackstone’s contributions to enhancing the brand’s value.

– Future Outlook: The transaction is anticipated to close in the fourth quarter of 2024, pending customary closing conditions. Rob Harper from Blackstone highlighted that this deal reflects a successful investment strategy that tripled investors’ capital during their hold period.