According to records, the American low-cost hotel chain Motel 6 is expected to significantly boost the top line of OYO, a travel tech platform that is headed for an IPO, and its EBITDA is predicted to surpass Rs 2,000 crore in 2025–2026.
In the upcoming financial year, which will be the first full year of its integration, the travel tech unicorn projects that Motel 6 would add over Rs 630 crore to its EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation).
The travel technology leader is anticipated to refinance its current USD 450 million Term Loan B (TLB) at a lower interest rate and then refile its initial public offering (IPO) papers with markets regulator Securities and Exchange Board of India (SEBI).
On Saturday, OYO revealed that it had reached an agreement to pay USD 525 million in cash to Blackstone Real Estate to acquire the Motel 6 and Studio 6 brands.
OYO’s parent company, Oravel Stays, announced that it will purchase G6 Hospitality, the industry’s top economic lodging franchisor and the owner of Motel 6 and Studio 6, the chain’s subsidiary hotel brand.
The deal is anticipated to close in 2024’s fourth quarter.
OYO intends to use a combination of loan and equity to finance the acquisition, according to sources. It will make use of the USD 250 million cash balance and proceeds from the recently completed fund campaign.
The number of hotels owned by the travel tech chain increased by 40%, from 12,938 at the end of FY23 to 18,103 at the end of FY24.
“With the acquisition, there will be 1,500 more hotels, bringing the overall number of hotels to around 20,000. However, it will greatly increase OYO’s top line at Motel 6’s average of 110 rooms per hotel and a higher average room rent, according to a source.
In the US and Canada, Motel 6 runs 1,500 franchised motels as well as Studio 6 extended-stay accommodations.
Prior to the purchase, OYO predicted that their PAT in the current fiscal year will more than triple to Rs 700 crore from FY24. In FY24, OYO announced its first-ever profit after tax (PAT) of Rs 229 crore. In Q1 of FY2025, the company claimed a profit of Rs 132 crore. In FY24, OYO’s Adjusted EBITDA increased by 215% to Rs 877 crore.
OYO estimates Ebidta to cross Rs 2,000 cr in FY26 with Motel 6 acquisition | Company News
