America’s most popular motel chain is sold to overseas buyer for $525 million
An Indian hotel chain is set to buy America’s most popular motel chain in a $525 million all-cash deal.
The deal will see budget motel chain Motel 6 acquired by the parent company of Oyo, a hotel chain based in India.
New York-based investment firm Blackstone, which owns Motel 6’s parent company G6 Hospitality, said the deal would be paid for all in cash and was expected to close by the end of this year.
The transaction also includes the sale of the Studio 6 motel brand, which targets longer-stay customers.
An Indian hotel chain is set to buy Motel 6 for $525 million in cash.
Ritesh Agarwal is the founder and CEO of Oyo Rooms, which operates over 157,000 hotels and homes in 35 countries
Oyo, which launched in India a little over a decade ago, is expanding its footprint in the US in recent years.
The company says it currently operates 320 hotels in 35 states and plans to add 250 hotels this year. The company, led by CEO Ritesh Agarwal, operates more than 157,000 hotels and properties in 35 countries.
“This acquisition is a significant milestone for a start-up like ours to strengthen our international presence,” Gautam Swaroop, head of OYO’s international division, said in a statement.
“Motel 6’s strong brand awareness, financial profile and network in the US, combined with OYO’s entrepreneurial spirit, will be critical in charting a sustainable path forward for the company.”
Blackstone acquired Motel 6 and Studio 6 in 2012 for $1.9 billion.
Since then, the private equity giant says it has invested heavily in the brand and pursued a strategy that has seen the chain transformed into a franchise.
Motel 6 was founded in 1962 in Santa Barbara, California, by two local construction companies who came up with a plan to build motels with low-cost rooms
“This transaction is a great outcome for investors and is the culmination of an ambitious business plan that has seen us more than triple our investors’ capital and generate more than $1 billion in returns during our ownership,” said Rob Harper, Head of Blackstone Real Estate Asset Management Americas.
Under the agreement, Oravel Stays, owner of Oyo Hotels, will acquire G6 Hospitality.
Motel 6 was founded in 1962 in Santa Barbara, California, by two local construction companies: William Becker and Paul Greene.
The duo came up with a plan to build motels with cheap rooms.
They decided on a room rate of $6 per night (equivalent to $60 in 2023), which would cover construction costs, land rent, and cleaning supplies; hence the name Motel 6.