Oyo Rooms might’ve seen its valuation slashed in recent times, but that doesn’t seem to have dampened its international aspirations.
Oyo Rooms has agreed to acquire G6 Hospitality, the parent company of iconic US-based 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. This is the biggest acquisition thus far for Oyo since it was founded in 2013.
“This acquisition is a significant milestone for a startup company like us to strengthen our international presence,” said Oyo International CEO Gautam Swaroop. “Motel 6’s strong brand recognition, financial profile, and extensive US network, combined with OYO’s entrepreneurial spirit, will be instrumental in charting a sustainable path forward,” he added.
“OYO’s innovative approach to hospitality will allow us to enhance our offerings and deliver great value to our guests while maintaining the iconic Motel 6 brand that travellers have trusted for over six decades,” said G6 Hospitality President and CEO Julie Arrowsmith.
Motel 6 is a prominent chain of budget motels founded in 1962 in Santa Barbara, California, which aimed to provide affordable lodging with a no-frills approach. The brand quickly gained popularity for its low-cost accommodations, originally priced at $6 per night (which gave the company its name), and has since expanded to approximately 1,500 locations across 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 the Blackstone Group in 2012.
Motel 6 is has now become a part of Oyo Rooms. Oyo had entered the US market in 2019, and after some initial struggles, already manages 320 hotels across 35 states in the country, and this number will grow manifold with its latest acquisition. Oyo now boasts a sizable international footprint — it operates in 80 countries and territories globally, including markets such as India, China, the United States, the United Kingdom, Malaysia, Indonesia, and various countries in the Middle East and Europe. It has previously too used the acquisition route to grow its operations — in 2022, Oyo had acquired Denmark-based vacation homes company Bornholmske Feriehuse, and it had acquired Europe-based vacation rental startup Direct Booker the same year.
But even as Oyo has been ambitious in growing its international presence, it’s faced some setbacks as well. It’s been trying to go public, but has twice pulled out of an IPO on the Indian stock markets. While the company reported its first-ever annual profit of Rs. 229 crore in FY24, it’s seen its valuation marked down by 75 percent by investors — just last month, Oyo Rooms had raised funds at a valuation of $2.4 billion, down from a peak valuation of $10 billion it had attained in 2019. But with the company continuing its international growth plans, and reporting its first-ever profit to boot, it’s looking to seriously turn things around in the coming quarters.