Oyo Completes $525 Million Acquisition of G6 Hospitality to Expand Global Reach

Oyo, the Softbank-backed hospitality startup, has successfully acquired G6 Hospitality, the parent company of Motel 6 and Studio 6 brands, for $525 million (approximately Rs 4,463 crore) in an all-cash transaction. The deal was finalized after Oyo reported a significant financial result, its first-ever profit after tax of Rs 229 crore for FY24, followed by a Rs 132 crore profit in Q1 FY25, 

Ankit Tandon, Oyo's Global Chief Business Officer and Head of M&A, expressed confidence that the acquisition will be "value accretive" due to G6's strong brand presence in the US and the potential for growth through synergies. He pointed out that Oyo’s success in Europe, particularly with its vacation homes business, provides a roadmap for similar success in North America. In Europe, Oyo had tripled EBITDA by leveraging strategic synergies.

As a result of the acquisition, Oyo expects its earnings before interest, taxes, depreciation, and amortization (EBITDA) to exceed Rs 2,000 crore by FY26. Motel 6, which operates over 1,400 budget hotels across the United States and Canada, is projected to contribute over Rs 630 crore in EBITDA during the first full year of integration.

Oyo's organizational structure has also undergone changes following the acquisition. Sonal Sinha has been appointed as the CEO of G6 Hospitality. The company aims to maintain G6’s franchise development, support, and safety operations while integrating G6's corporate functions with Oyo's global operations.

In terms of expansion, Oyo plans to add more than 150 hotels under the Motel 6 and Studio 6 brands by 2025. This will further strengthen the brands’ presence in key markets across North America while preserving their unique identity. The acquisition has also brought approximately 1,500 franchised hotels into Oyo’s portfolio, significantly increasing its footprint in North America. Together, Oyo and G6 Hospitality are expected to generate a combined Gross Booking Value (GBV) of about $3 billion, with G6 contributing $1.7 billion.

Oyo's expansion strategy has also been successful in Europe. Its subsidiary, Oyo Vacation Homes (OVH), has acquired several vacation home management companies, including DanCenter, Belvilla, and TraumFerienwohnungen, among others. These acquisitions have enabled Oyo to manage thousands of vacation homes across several European countries. Since acquiring DanCenter in 2019, Oyo claims to have doubled the company’s revenue and market presence. Through these acquisitions, Oyo aims to further its presence in both the European and North American markets.

The G6 Hospitality acquisition is part of Oyo's broader strategy to diversify its portfolio and strengthen its global reach. The company has steadily shifted from being a budget hotel operator to a more diverse global hospitality player, with a focus on vacation homes, franchised hotels, and other hospitality services. This latest acquisition of Motel 6 and Studio 6 will add significant value to Oyo’s North American business, which has already seen notable growth.

Oyo aims to continue its aggressive growth strategy, aiming to consolidate its market position in both mature and emerging markets. By leveraging synergies across different regions and sectors, Oyo hopes to create greater value for its stakeholders while expanding its global presence.