Oyo Acquires Motel 6

India's largest startup, Oyo, a budget hotel company, has acquired G6 Hospitality, the parent company of Motel 6, for $525 million in an all-cash transaction.

• The acquisition also includes the Studio 6 extended-stay brand.
• The deal is expected to close in the fourth quarter of this year.

Oyo's Expansion in the US

Oyo, which opened its first US location in 2019, is rapidly expanding its North American presence with this acquisition.

• Oyo currently operates over 320 hotels across 35 states in the US.
• Motel 6, a well-known budget motel brand in the US, has a franchise network of around 1,500 locations in the US and Canada.

Strategic Acquisition for Oyo

This acquisition is a significant milestone for Oyo, a startup company, to strengthen its international presence.

• Motel 6 will continue to operate as a separate entity.

Oyo's Recent Challenges

Oyo, founded in 2012 and backed by SoftBank, was valued at $10 billion in 2019. However, the company has faced challenges in recent years.

• The pandemic had a negative impact on the hospitality industry, including Oyo.
• Oyo has also faced criticism over its practices, such as offering rooms from unavailable or unlicensed hotels.

Valuation and Funding

Oyo's valuation fell to $2.5 billion in a recent funding round, significantly lower than its previous valuation.

• Oyo has denied reports about the lowered valuation.

Motel 6's History

Founded in 1962, Motel 6 popularized the budget motel concept, with rooms originally costing $6 per night.

• Blackstone acquired Motel 6 for $1.9 billion in 2012.

Impact on the Hospitality Industry

This acquisition is expected to have a significant impact on the hospitality industry, particularly in the budget hotel segment.

• It could lead to increased competition in the market.
• It could also drive innovation and improve service quality.

Oyo's Future

The acquisition of Motel 6 positions Oyo for further growth and expansion in the US and globally.

• Oyo is aiming to become a leading player in the hospitality industry.
• The company plans to leverage its technology and expertise to improve the guest experience and enhance operational efficiency.