OYO acquires G6 Hospitality

OYO has completed its acquisition of G6 Hospitality, operators of Motel 6 and Studio 6 brands, from Blackstone Real Estate for $525 million, marking a significant milestone in expanding the company’s global footprint. The deal is projected to increase OYO's EBITDA to over Rs 2,000 crore in FY26. Motel 6 is expected to contribute an EBITDA of over Rs 630 crore in the coming financial year, which will be the first full year of its integration.

The acquisition adds approximately 1,500 franchised hotels across the US and Canada to OYO's portfolio, significantly expanding its North American presence. The combined entity is projected to generate a Gross Booking Value of approximately $3 billion, with G6 Hospitality contributing $1.7 billion to this.

OYO has expanded its European presence through strategic acquisitions under OYO Vacation Homes (OVH). With over 184,000 properties across Europe, the US, the UK, Southeast Asia, and the Middle East, Europe stands as one of OYO's key markets. The company's portfolio includes DanCenter, a vacation home management company managing 12,000 properties across Denmark, Sweden, Norway, and Germany. Since its acquisition in 2019, DanCenter has doubled both revenue and market presence, emerging as one of Denmark's leading vacation rental operators.

OVH's brands include Belvilla, which manages 65,000 holiday homes across 20 countries, and Traum-Ferienwohnungen, an online vacation rental platform with 100,000 homes. The company further strengthened its European presence by acquiring Direct Booker in Croatia (3,200 homes) in 2022 and most recently, CheckMyGuest, a premium vacation rental company based in Paris. This expansion has been supported by OYO's ability to successfully adapt its technology and operational expertise across diverse markets. Expertise from India to succeed in various parts of the world has been key to this growth.

“This acquisition represents a transformative moment for OYO's global operations. We could see this will be a value accretive acquisition due to their strong brand franchise in US, potential for growth and synergies. Through the acquisition process and the conclusion, that belief is further strengthened. Our success in Europe, where we nearly tripled EBITDA through strategic synergies for our vacation homes business, has given us a clear roadmap for value creation,” stated Ankit Tandon, Global CBO & Head of M&A - OYO.

The deal comes at a time when OYO's US operations have been showing robust growth. Since its 2019 launch in the region, OYO has established a presence across 35 states with around 400 hotels.

The integration plan includes significant technological advancements, with OYO's 300-member product specialist team set to enhance guest experience and operational efficiency. "Blackstone has been a great investor for G6 hospitality. They kept the core business competencies intact and have set us up for success as strategic investors coming in. The US is an attractive market for us and this acquisition will provide a strong growth impetus," added Rakesh Prusti, Group General Counsel, OYO.

OYO's financial trajectory has been notably strong, with the company reporting its first-ever profit after tax of approximately Rs 229 crore in FY24, followed by a profit of Rs 132 crore in Q1 FY25. The company's adjusted EBITDA witnessed a substantial 215 per cent growth to reach approximately Rs 877 crores in FY24.

The acquisition has prompted organizational changes at G6 Hospitality, with Sonal Sinha appointed as CEO. The company plans to maintain G6's franchise development, support, and safety operations while integrating corporate functions with OYO's global excellence teams.

OYO has outlined plans to accelerate G6 Hospitality's growth, targeting the addition of over 150 hotels in 2025 under the Motel 6 and Studio 6 brands. This expansion is expected to strengthen the brands' presence in key markets while preserving their core values and distinct identity.