Oyo, a hospitality giant backed by SoftBank, has finalized the deal to acquire G6 Hospitality, the outfit behind the iconic Motel 6 and Studio 6 brands. The acquisition, which wrapped up on 23 December 2024, is an all-cash transaction valued at USD 525 million (around INR 4,463 crore).
The acquisition comes on the heels of Oyo reporting its first profit after tax – INR 229 crore in FY24, followed by INR 132 crore in Q1 FY25. Ankit Tandon, Oyo’s Global Chief Business Officer and M&A head, is bullish about this deal, calling it “value accretive” due to G6’s solid brand value and the potential for growth in the U.S.
Financial Upsides and Future Projections
With G6 Hospitality now in the fold, Oyo’s EBITDA is expected to soar past INR 2,000 crore by FY26. Just from Motel 6, the company is anticipating an EBITDA boost of over INR 630 crore in the first full year after integration. Compare that to FY24’s adjusted EBITDA of INR 888 crore, which was itself a jump from INR 274 crore the year before, and you see where this is going – upward.
With this acquisition, Oyo isn’t just growing; it’s strategically planting its flag across the U.S. and Canada with about 1,500 new franchised hotels. This significantly widens Oyo’s operational scope in North America, giving it a boost in the competitive hospitality landscape. The new conglomerate is set to generate a Gross Booking Value (GBV) of around USD 3 billion, with G6 chipping in a hefty USD 1.7 billion.
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Oyo’s Global Expansion
Oyo continues to expand globally, strengthening its presence across Europe, the UK, Southeast Asia, and the Middle East with over 1,84,000 properties. Its growth strategy focuses on strategic acquisitions and a strong foothold in vacation rentals. Europe remains a key market, driven by Oyo Vacation Homes (OVH), which includes brands like DanCenter, with 12,000 properties in Scandinavia and Germany, and Belvilla, offering 65,000 homes across 20 countries. Additionally, Traum-Ferienwohnungen contributes 100,000 vacation rentals to its portfolio.
Recent acquisitions, such as Croatia’s Direct Booker with 3,200 homes and Paris-based CheckMyGuest, highlight Oyo’s push into Southern Europe and the premium rental segment. By diversifying from budget stays to luxury rentals, the company is solidifying its position as a versatile leader in the global hospitality industry, fueled by bold investments and strategic growth.
Wrapping Up
This acquisition isn’t just a business transaction; it’s a pivotal moment for Oyo. It’s a step towards dominating not just the North American hospitality scene but also setting a benchmark for their global operations. With strong financial forecasts, a clear expansion plan, and a history of successful integrations, the company is gearing up to make some noise in the industry.