Motel 6 sold to Indian hotel company for $525 million: NPR

This file photo taken on Jan. 3, 2018, shows a Motel 6 in Seatac, Washington.

Ellen Thompson/Associated Press

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Ellen Thompson/Associated Press

Motel 6, the budget hotel that has been in business for six decades, has announced that it will be acquired by Oyo, an India-based travel company, in a multi-million dollar deal.

But don’t worry, the hotel chain will leave their lights on for you.

Blackstone, the parent company of Motel 6, Issue a statement The company announced Friday that the deal will be a $525 million cash transaction. As part of the multi-million dollar deal, the company will also sell its Studio 6 brand, its extended-stay hotel chain.

Blackstone said the all-cash deal is expected to close by the end of this year.

“This acquisition is an important milestone for a startup like us to strengthen our international presence,” OYO International CEO Gautam Swarup said in a statement.

Oyo, which expanded into the U.S. five years ago, was founded in 2013 and operates 320 hotels in 35 states. Last year, the India-based company added nearly 100 more hotels to its U.S. portfolio.

“Motel 6’s strong brand, financial profile and network in the US, combined with OYO’s entrepreneurial spirit, will be instrumental in charting a sustainable path forward for the company, which will continue to operate as a separate entity,” Swaroop said.

Blackstone’s sale of Motel 6 and Studio 6 comes as the U.S. hotel industry continues to recover from the pandemic.

As NPR previously reported, federal data shows that in 2024, there will be about 200,000 fewer people working in hotels and other accommodations than before the pandemic.

Jan Freitag, an analyst with real estate data firm Costar, told NPR that economy hotel occupancy in the first eight months of this year was about 54.2 percent, down 2.2 percent from a year ago. In addition, he says economy hotel room rates are about $79, down 1 percent from a year ago.

The big question is whether Oyo will stick with the brand name it bought or the one it currently carries, says Freitag, who tracks hospitality analytics for CoStar.

“You’ve seen companies use the main name under the brand, like Courtyard by Marriott and Hilton Garden Inn. So, will there be a Motel 6 by Oyo or will they, over time, change the name?” he said.

Motel 6 was founded in 1962 in Santa Barbara, California, By two construction company owners who were struggling to find affordable, reliable options for crews and families traveling across the United States.

Motel 6 and Studio 6 own approximately 1,500 hotels across the United States and Canada. New York-based Blackstone bought the motel chain in 2012 for $1.9 billion.