Headquartered near New Delhi, Oyo, the India-based hotel company, has agreed to acquire the Motel 6 and Studio 6 hotel brands from Blackstone for $525 million in an all-cash deal. This marks Oyo’s second attempt to expand in the U.S. market as the SoftBank-backed startup continues its efforts to go public in India.
The acquisition brings significant scale to Oyo’s U.S. operations. Motel 6 has approximately 1,500 locations across the U.S. and Canada, compared to Oyo’s current 320 hotels in 35 U.S. states. Motel 6’s franchise network generates $1.7 billion in annual gross room revenues, while Oyo was recently valued at $2.4 billion in a fundraising round.
Under the terms of the deal, Motel 6 will continue to operate as a separate entity. The acquisition is expected to close before the end of the year and includes the Studio 6 hotel brand as well.
For Oyo, this deal offers several strategic advantages. It provides access to Motel 6’s strong brand recognition and extensive footprint in North America. Additionally, Oyo may be able to leverage its strong customer base in India to generate incremental demand from the Indian diaspora visiting the U.S.
The acquisition concludes Blackstone’s 12-year ownership of Motel 6, which it purchased from Accor for $1.9 billion in 2012. Despite the apparent discrepancy in purchase and sale prices, Blackstone managed to more than triple its investors’ capital and generate over $1 billion in profit. This was achieved by investing $900 million in property improvements and selling off hundreds of locations.
The deal comes at a challenging time for the U.S. economy hotel sector, which is facing flat occupancy rates and stagnant room prices. However, industry experts anticipate an improved outlook in 2025, partly due to increased federal infrastructure spending driving demand for budget accommodations.
