An India-based hotel operator is buying 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, an India-based hotel operator.
New York-based investment firm Blackstone, which owns Motel 6’s parent company, G6 Hospitality, said the deal would be an all-cash transaction and is expected to close by the end of the year.
The transaction will also include the sale of the Studio 6 motel brand, which caters to customers seeking extended stays.
An India-based hotel operator will buy Motel 6 in a $525 million all-cash deal.
Ritesh Agarwal is the Founder and CEO of Oyo Rooms, which operates over 157,000 hotels and homes across 35 countries.
Oyo, which was launched in India just over a decade ago, has been Expanding its presence in the United States in recent years.
The company says it currently operates 320 hotels in 35 states and aims to add 250 more this year. The company, led by CEO Ritesh Agarwal, operates more than 157,000 hotels and residences in 35 countries.
“This acquisition is an important milestone for a startup like us to strengthen our international presence,” Gautam Swaroop, head of OYO’s international division, said in a statement.
‘Motel 6’s strong brand recognition, financial profile and US network, combined with OYO’s entrepreneurial spirit, will be instrumental in charting a sustainable path forward for the company.’
Blackstone had purchased 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 turned the chain into a franchise.
Motel 6 was founded in Santa Barbara, California, in 1962, by two local construction contractors who devised a plan to build motels with affordable rooms.
“This transaction is a fantastic outcome for investors and is the culmination of an ambitious business plan that more than tripled our investors’ capital and generated over $1 billion in proceeds during our holding period,” 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 Santa Barbara, California, in 1962, by two local construction contractors: William Becker and Paul Greene.
The couple came up with a plan to build motels with affordable rooms.
They decided to set a room rate of $6 per night (equivalent to $60 in 2023), which would cover the costs of construction, land rent, and cleaning supplies—hence the company’s name: Motel 6.