Blackstone sells Motel 6 to Indian hotel giant Oyo for $525M
India-based hotel giant Oyo has agreed to acquire Motel 6 and Studio 6 from Blackstone for $525 million. This all-cash deal, expected to close by year-end, marks Oyo's second attempt to expand in the U.S. market and comes ahead of its planned public offering in India. The news was first reported by the Wall Street Journal.
The acquisition will substantially enhance Oyo's presence in North America, adding Motel 6's network of approximately 1,500 locations across the U.S. and Canada to Oyo’s existing 320 properties in 35 U.S. states. Motel 6 will continue to operate as a separate entity, bringing its strong brand recognition and $1.7 billion in annual gross room revenues to Oyo's portfolio. Oyo, formed only a dozen years ago, has seen venture-cap-backed growth, with Softbank leading a 2019 investment round that valued the company at $10 billion.
This move comes at a challenging time for the U.S. economy hotel sector, which is facing stagnant occupancy rates and room prices. However, industry experts anticipate improvements in 2025, partly due to increased federal infrastructure spending driving demand for budget accommodations. As robust returns for limited-service hotels showed during COVID, some work cannot be done remotely.
For Blackstone, which acquired Motel 6 in 2012 for $1.9 billion, the sale concludes a twelve-year ownership period that saw significant property improvements and a shift to a franchise model. Despite the lower sale price, Blackstone reports having more than tripled its investors' capital and generated over $1 billion in profit from the investment.
This acquisition underscores Oyo's ambitious expansion plans and could potentially reshape the budget hotel landscape in the United States.