OYO, the popular Indian hotel chain led by Ritesh Agarwal, has announced a big deal – the purchase of G6 Hospitality, which runs Motel 6 and Studio 6 in the United States.
This all-cash deal is worth $525 million (around ₹4,400 crore), marking another major step in OYO’s global expansion.
OYO’s parent company, Oravel Stays, is buying G6 Hospitality from Blackstone Real Estate, a part of the famous U.S. investment firm Blackstone Inc.
The deal is expected to be completed by the end of 2024. This comes after OYO’s earlier purchase of Paris-based rental platform Checkmyguest for over $27 million.
About G6 Hospitality
Motel 6 is a well-known budget hotel chain in the U.S., founded back in 1962. Today, it operates over 1,450 locations across the U.S. and Canada. Studio 6, its extended-stay brand, has more than 200 properties.
These hotels are located in big cities like Atlanta, Dallas, Houston, Seattle, and other major markets in North America.
This acquisition gives OYO a strong foothold in the U.S. and Canada, where budget and long-stay hotels are in high demand.
OYO is already present in more than 80 countries and manages over 1 million rooms globally, making this deal a strategic move to strengthen its business in North America.
Why G6 Hospitality is a Good Fit for OYO
Owned by Blackstone since 2012, G6 Hospitality has been performing well, particularly in the budget segment.
Motel 6 is known for offering affordable accommodation, making it popular with both leisure and business travelers. Studio 6 caters to guests looking for longer stays at affordable prices.
In the past year, G6 reported 72% occupancy rates, which is higher than the U.S. hotel industry average of 63.1%, according to STR data.
This makes G6 an attractive buy for OYO as it looks to expand its operations in the U.S.
OYO’s Growth Strategy
Founded in 2013, OYO has quickly grown from a budget hotel aggregator in India to a global player in the hospitality industry.
It is known for its tech-driven approach, offering hotel, homestay, and vacation rental options through its platform.
OYO plans to invest in upgrading G6’s properties and introduce its OYO OS, a tech platform that helps manage operations more efficiently and reduces costs.
OYO’s use of AI-based pricing has been a key factor in its success globally, and the company plans to bring similar innovations to G6 Hospitality.
What This Means for the U.S. Hotel Market
The budget hotel industry has bounced back after the pandemic, with many travelers preferring cheaper stays.
According to the American Hotel & Lodging Association (AHLA), hotel occupancy rates in 2023 increased by 11% compared to 2022.
This growing demand for budget hotels makes the G6 acquisition a smart move for OYO, especially in the U.S. market, which is known for its competition.
Blackstone’s Exit and Industry Trends
For Blackstone, selling G6 Hospitality fits into its strategy of reshuffling its real estate investments.
The sale also reflects a broader trend in the hospitality industry, where companies are focusing more on affordable and mid-scale hotels, as these segments have seen higher demand.
Conclusion
OYO’s purchase of G6 Hospitality is a bold step toward expanding its reach in the U.S.
With over 1,450 Motel 6 locations and 200 Studio 6 properties, OYO is poised to become a bigger player in the American hospitality industry.
As OYO continues to invest in technology and expand globally, this acquisition could open doors to more opportunities in the Western markets.
