OYO has acquired the Motel 6 and Studio 6 brands from Blackstone Real Estate for USD 525 million, adding 1,500 franchised hotels across the U.S. and Canada to its portfolio. This strategic move is projected to boost OYO's EBITDA to over INR 2,000 crore (USD 240 million) in FY 2025-26, with Motel 6 contributing INR 630 crore (USD 76 million). The combined entity is expected to generate a gross booking value of USD 3 billion. OYO first-ever profit after tax in FY 2023-24 signals a strong growth trajectory. By leveraging Motel 6 brand recognition and operational synergies, OYO aims to strengthen its position in North America while enhancing customer experiences through technology and expertise.
OYO has officially acquired the Motel 6 and Studio 6 brands from Blackstone Real Estate for USD 525 million. This move marks a key step in OYO's strategy to grow its presence in the North American hotel market. The deal, which was finalized on September 20, 2024, is expected to significantly boost OYO's financial performance in the coming years.
With this acquisition, OYO adds around 1,500 franchised hotels across the United States and Canada to its portfolio. This expansion is projected to increase OYO's earnings before interest, taxes, depreciation, and amortization (EBITDA) to over INR 2,000 crore (approximately USD 240 million) in the financial year 2025-26. Specifically, Motel 6 is anticipated to contribute about INR 630 crore (around USD 76 million) to this total. The combined entity is forecasted to generate a gross booking value of around USD 3 billion, with G6 Hospitality, the parent company of Motel 6 and Studio 6, contributing USD 1.7 billion to that figure.
OYO's journey in the U.S. began in 2019, and the company has been steadily increasing its market presence since then. The acquisition of Motel 6 and Studio 6 is seen as a transformative moment for OYO. Ankit Tandon, OYO's Global Chief Business Officer and Head of M&A, highlighted the strong brand recognition of Motel 6 in the U.S. and the potential for growth and operational synergies that this acquisition brings.
In addition to expanding its footprint, this acquisition is part of OYO's broader strategy to enhance its profitability. The company recently reported its first-ever profit after tax of approximately INR 229 crore (about USD 27 million) for the financial year 2023-24, followed by a profit of INR 132 crore (around USD 16 million) in the first quarter of 2024-25. These financial results indicate a positive trend for OYO, reinforcing its ability to grow and adapt in a competitive market.
OYO's acquisition of Motel 6 and Studio 6 not only strengthens its position in the North American market but also reflects the company's commitment to expanding its global operations. As the hospitality industry continues to recover from the impacts of the COVID-19 pandemic, OYO's strategic moves may position it well for future growth. The company plans to leverage its technology and operational expertise to enhance the customer experience at these newly acquired properties, aiming to attract a broader range of travelers.
Overall, this acquisition marks a significant milestone for OYO as it seeks to solidify its place in the global hospitality landscape. The company is poised to benefit from the established customer base of Motel 6 and Studio 6, while also exploring new opportunities for growth in both the U.S. and Canadian markets.
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