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Motel 6 is sold to an Indian hotel company for $525 million

This Jan. 3, 2018 file photo shows a Motel 6 in SeaTac, Wash.
Elaine Thompson
/
AP
This Jan. 3, 2018 file photo shows a Motel 6 in SeaTac, Wash.

Motel 6, the economy budget motel that has existed for six decades, announced that it will be acquired by Oyo, an Indian-based travel company, in a multi-million dollar sale.

But there is no need to worry; the motel chain will still leave its light on for you.

Motel 6’s parent company, Blackstone, released a statement Friday outlining that the deal would be an all-cash transaction totaling $525 million. As part of the multimillion-dollar transaction, the company will also sell its Studio 6 brand, its chain of extended-stay hotels.

Blackstone said that the all-cash transaction is expected to be completed by the end of this year.

"This acquisition is a significant milestone for a start-up company like us to strengthen our international presence," Oyo International’s chief executive, Gautam Swaroop, said in a statement.

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

“Motel 6’s strong brand recognition, 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 post-pandemic.

As previously reported by NPR, federal data showed that in 2024, almost 200,000 fewer people work in hotels and other lodging than before the pandemic.

Jan Freitag, an analyst with real estate data firm CoStar, told NPR that occupancy for economy-class hotels in the first eight months of this year was about 54.2%, down 2.2% from a year ago. Additionally, he says that room rates for economy-class hotels are around $79, down 1% from a year ago.

Freitag, who tracks hospitality analytics for CoStar, says the big question is whether Oyo will lean into the brand name it purchased or the name it currently has.

“You have seen that companies have used the parent name under the brand, so Courtyard by Marriott, Hilton Garden Inn,” he said. “So, is there going to be Motel 6 by Oyo or are they, over time, changing the name.”

Motel 6 was founded in 1962 in Santa Barbara, Calif., by two construction company owners who struggled to find affordable, reliable options for their work crews and families traveling across the U.S.

Motel 6 and Studio 6 have nearly 1,500 hotels across the U.S. and Canada. Blackstone, a New York-based company, purchased the motel chain in 2012 for $1.9 billion.

Copyright 2024 NPR

Jonathan Franklin
Jonathan Franklin is a reporter on the Newsdesk covering both race & identity and breaking news.