OYO Acquires Motel 6 Hotel Chain in the US for $525 Million Under Ritesh Agarwal's Leadership

Motel 6, a motel business in the United States, was recently acquired by OYO from Blackstone Real Estate for a price of $525 million. As a consequence of this, the Indian hotel aggregator would acquire almost 1400 properties located around the United States.

It was announced on September 20, 2024, that Oravel Stays Ltd, the parent company of OYO, had acquired G6 Hospitality LLC, the parent company of the Motel 6 and Studio 6 brands. According to Blackstone, the transaction is anticipated to be finalized by the fourth quarter of 2024.

Motel 6’s Business Model

Motel 6 operates motels all throughout the United States and Canada, offering guests hotel rooms that are both tidy and clean at reasonable prices. As a result of the chain's initial pricing of six dollars per night when it was first established, the name "Motel 6" was given to the establishment.

Both OYO and Motel 6's business models have been developed on the motto that is compatible with the idea of delivering clean accommodations to travelers on a minimum budget.

The acquisition, on the other hand, takes place at a time when the hotel industry in the United States is experiencing difficulties with decreased occupancy and consistent room rates, as stated in a report published by one of the biggest media houses of the US. The report revealed that customers prefer to stay in a low budget hotel that is priced around $79 per night on an average. This figure is 14% higher compared to five years ago, but it is still lower than the expectations of the US hotel industry. 

How This Deal Can Provide a Win-Win Situation for Both?

The combination of OYO's entrepreneurial drive and the strong brand awareness, financial profile, and network that Motel 6 possesses in the United States will be extremely helpful in determining a path ahead for the firm that is both sustainable and profitable. According to the statement issued by Blackstone, there was a comment made by Gautam Swaroop, CEO of OYO's international division.

Rob Harper, who is the head of Blackstone Real Estate Asset Management Americas, has stated that this acquisition is an excellent conclusion for investors.

Motel 6 was acquired by Blackstone in 2012 from the French hotel company Accor for a price of $1.9 billion. Following the acquisition, Blackstone committed $900 million to enhance the chain's offerings. However, it has recently sold it to OYO for a price that is less than half of what it was valued at in 2012.

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