$525 Million Purchase by Oravel Stays Will Close in 4th Quarter
Soon, a different company will be leaving the lights on for guests of Motel 6. Private equity giant Blackstone has announced that Oravel Stays will buy G6 Hospitality, an umbrella brand whose holdings include budget accommodation brands Motel 6 and Studio 6, for $525 million. Oravel Stays, which is based in Gurgaon in northern India, operates hotels under its OYO brand. The all-cash purchase is expected to close within the fourth quarter of this year, USA Today reported.
The budget hotel market is healthy and growing. Globally, that market was valued at $276.3 billion in 2022, according to Allied Market Research, and it’s projected to reach $430.9 billion by 2032, a compound growth rate of 4.1% annually. Allied Market Research defined budget hotels as reasonably priced lodging that offers basic amenities and services, and Motel 6 epitomizes that hospitality segment.
Motel 6 locations comprise the majority of G6, which has gross revenue of approximately $1.7 billion per year, the New York Post reported. The Motel 6 brand contains about 1,450-plus corporate- and franchisee-owned hotels in 49 states and five Canadian provinces. They are often sited near airports and freeways and other major thoroughfares. Studio 6 has more than 200 properties in locations such as Atlanta, Dallas, Houston, Seattle and Canada. The New York Times described Studio 6 as an offshoot of Motel 6, and the Associated Press noted that Studio 6 specializes in lodging for extended periods.
G6 Under Blackstone
Blackstone had bought G6 in 2012 for $1.9 billion. Rob Harper, a senior managing director at Blackstone, said in a news release that “this transaction is a terrific 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 profit over our hold period.”
Under its ownership, the Blackstone news release said, the private equity firm had invested significant capital to create value and enhance the Motel 6 brand. Blackstone said it focused on transforming the business into a leading asset-light lodging brand that includes a franchise network.
Reaction from OYO, G6
Also in the news release, Gautam Swaroop, CEO of OYO International, said, “This acquisition is a significant milestone for a start-up company like us to strengthen our international presence.” Swaroop also praised “Motel 6’s strong brand recognition, financial profile and network in the U.S.” The G6 companies will remain separate from other Oravel Stays operations.
Julie Arrowsmith, president and CEO of G6 Hospitality, said in the news release that Blackstone’s transformation has “positioned us well for this new chapter. OYO’s innovative approach to hospitality will allow us to enhance our offerings and great value to our guests while maintaining the iconic Motel 6 brand.”
About Oravel
Oravel Stays expanded into the United States in 2019, and now has more than 320 hotels across 35 states, many in the south and west but also in New York City – the Oyo Times Square. The company is international, with more than 157,000 hotels and homes in 35 countries. In the past, Oravel Stays had received a large investment from SoftBank, The New York Times reported. Some “troubling incidents in India” raised questions about certain Oravel business practices, The Times said.
The news release described Oravel Stays as “a global platform that empowers entrepreneurs and small businesses with hotels and homes by providing full-stack technology products and services.” Oravel Stays leadership said the company hopes to add about 250 more holdings to its portfolio by the end of 2024.
About Motel 6, G6 and Blackstone
Motel 6 was founded in 1962 in Santa Barbara, Calif., with its niche being clean, basic, rooms. Its name originated from the brand charging only $6 per night initially. Motel 6 and Studio 6 were recognized in the Entrepreneur magazine’s 2024 Franchise 500 report, with Motel 6 ranking in the top 50 of all franchises. The Carrollton, Texas-based company was named a 2024 Leader in Diversity by Dallas Business Journal.
G6 Hospitality LLC has nearly 1,500 economy lodging locations under the iconic Motel 6 brand and the Studio 6 Extended Stay brand in the United States and Canada. G6 Hospitality is committed to making hospitality accessible to all through responsible business practices and unparalleled opportunity for franchisees to build a legacy through ownership, the news release stated.
Founded in 1991, Blackstone invests in real estate globally and on a large scale. It has $336 billion in investor capital under management.
