Oyo acquires iconic US hotel chain Motel 6 for Rs 4,350 crore

Oyo Rooms has seen its stock value decline in recent times, but this has not weakened its international aspirations.

Oyo Rooms has agreed to acquire G6 Hospitality, the parent company of iconic US budget hotel brands Motel 6 and Studio 6. Oyo will acquire the brands from Blackstone Real Estate for $525 million (Rs 4,350 crore) in an all-cash deal, making it Oyo’s biggest acquisition since it was founded in 2013.

“This acquisition is a significant milestone for a startup like ours to strengthen our global presence,” said Oyo International CEO Gautam Swaroop. “Motel 6’s strong brand recognition, financial profile and extensive network in the US, coupled with OYO’s entrepreneurial spirit, will be instrumental in charting a sustainable path forward,” he added.

“OYO’s innovative approach to hospitality will enable us to enhance our offering and provide great value to our guests, while preserving the iconic Motel 6 brand that travelers have trusted for over six decades,” said Julie Arrowsmith, president and CEO of G6 Hospitality.

Motel 6 is a well-known chain of budget motels founded in 1962 in Santa Barbara, California, with the goal of providing affordable lodging without unnecessary frills. The brand quickly gained popularity for its affordable lodging, initially priced at $6 per night (which gave the company its name), and has since expanded to approximately 1,500 locations in the United States and Canada. Motel 6 emphasizes clean, consistent rooms and offers basic amenities such as free Wi-Fi. The chain was acquired by Blackstone Group in 2012.

Motel 6 is now part of Oyo Rooms. Oyo entered the US market in 2019 and after struggling initially, it now operates 320 hotels in 35 states across the country, a number that will grow multi-fold with its latest acquisition. Oyo now boasts a significant international presence, operating in 80 countries and territories around the world, including markets like India, China, the US, the UK, Malaysia, Indonesia, and various Middle Eastern and European countries. It has also used the acquisition route to expand its business in the past, acquiring Danish vacation home company Bornholmske Feriehuse in 2022, and acquiring European vacation rental startup Direct Booker the same year.

But even as Oyo has ambitiously expanded its international presence, it has also faced setbacks. It has tried to go public but has twice pulled out of IPOs on Indian stock markets. While the company reported its first-ever annual profit of Rs 229 crore in fiscal 2024, investors have slashed its valuation by 75 per cent — just last month, Oyo Rooms raised funds at a valuation of $2.4 billion, down from a peak valuation of $10 billion reached in 2019. But as the company continues its international growth plans and posts its first-ever profit, it is looking to turn things around in a big way in the coming quarters.