Indian hospitality company Oyo is set to make waves in the American market. The Ritesh Agarwal-led company recently announced the acquisition of G6 Hospitality, a leading hotel chain in the US, in a cash deal worth $525 million (approximately Rs 43.8 billion). This acquisition includes popular brands Motel 6 and Studio 6, which are well-established in the US economy lodging sector.
Oyo has been growing its footprint in the United States over the past five years and already manages more than 320 hotels across 35 states. This deal is expected to accelerate Oyo’s expansion strategy, with plans to add 250 more hotels in the US by the end of this year.
Strengthening its presence in the US market
G6 Hospitality has built a strong presence in the economy lodging sector, with a network of around 1,500 hotels under the Motel 6 and Studio 6 brands across the US and Canada. With this acquisition, Oyo aims to enhance its operational efficiency by leveraging its technological expertise and global distribution network.
Motel 6 is already generating an annual gross room revenue of $1.7 billion, and Oyo hopes to further strengthen the brand by integrating its tech-driven solutions, helping boost customer experience and improve profitability for franchisees.
Oyo’s CEO for International operations, Gautam Swarup, highlighted the importance of this acquisition in expanding the company’s global presence. “This acquisition marks a major step in our international growth journey. Combining Oyo’s innovative tech solutions with Motel 6’s trusted brand identity will create new opportunities for us in the US market,” Swarup stated.
IPO plans and financial milestones
Oyo’s acquisition of G6 Hospitality comes at a crucial time as the company is preparing for its long-awaited IPO. Although the company has postponed its IPO plans several times, it is once again gearing up to file for a public listing.
The financial year 2024 proved to be a significant milestone for Oyo as it posted a profit of Rs 229 crore, marking its first profitable year. This comes as a positive sign for investors ahead of the IPO, with the company already operating in over 800 cities across 80 countries.
The acquisition deal is expected to be finalized by the fourth quarter of 2024.
