OYO, the IPO-bound travel tech platform, expects its EBITDA to hit INR 2,000 crore in 2025-26, largely driven by the American budget hotel chain Motel 6.͏͏ Documents͏͏ reveal͏͏ that͏͏ Motel͏͏ 6͏͏ is͏͏ projected͏͏ to͏͏ contribute͏͏ over͏͏ INR͏͏ 630͏͏ crore͏͏ to͏͏ OYO’s͏͏ EBITDA͏͏ in͏͏ the͏͏ upcoming͏͏ financial͏͏ year,͏͏ marking͏͏ the͏͏ first͏͏ full͏͏ year͏͏ of͏͏ their͏͏ integration.
The͏͏ travel͏͏ tech͏͏ major͏͏ plans͏͏ to͏͏ refile͏͏ its͏͏ initial͏͏ public͏͏ offering͏͏ (IPO)͏͏ documents͏͏ with͏͏ the͏͏ Securities͏͏ and͏͏ Exchange͏͏ Board͏͏ of͏͏ India͏͏ (SEBI)͏͏ following͏͏ the͏͏ refinancing͏͏ of͏͏ its͏͏ existing͏͏ USD͏͏ 450͏͏ million͏͏ Term͏͏ Loan͏͏ B͏͏ (TLB)͏͏ at͏͏ a͏͏ reduced͏͏ interest͏͏ rate.
Strategic͏͏ Acquisition͏͏ of͏͏ Motel 6:
OYO͏͏ announced͏͏ on͏͏ Saturday͏͏ that͏͏ it͏͏ has͏͏ reached͏͏ an͏͏ agreement͏͏ to͏͏ acquire͏͏ the͏͏ Motel͏͏ 6͏͏ and͏͏ Studio͏͏ 6͏͏ brands͏͏ from͏͏ Blackstone͏͏ Real͏͏ Estate͏͏ for͏͏ USD͏͏ 525͏͏ million͏͏ in͏͏ an͏͏ all-cash͏͏ deal.
Continue͏͏ Exploring:͏͏ OYO acquires͏͏ US͏͏ chain͏͏ Motel͏͏ 6͏͏ in͏͏ $525͏͏ Mn͏͏ deal,͏͏ eyes͏͏ global͏͏ expansion
Oravel͏͏ Stays,͏͏ the͏͏ parent͏͏ company͏͏ of͏͏ OYO,͏͏ announced͏͏ that͏͏ it͏͏ will͏͏ acquire͏͏ G6͏͏ Hospitality,͏͏ the͏͏ leading͏͏ economy͏͏ lodging͏͏ franchisor͏͏ and͏͏ parent͏͏ company͏͏ of͏͏ Motel͏͏ 6͏͏ and͏͏ its͏͏ offshoot͏͏ brand,͏͏ Studio͏͏ 6.
The͏͏ transaction͏͏ is͏͏ anticipated͏͏ to͏͏ be͏͏ finalized͏͏ in͏͏ the͏͏ fourth͏͏ quarter͏͏ of͏͏ 2024.
According͏͏ to͏͏ sources,͏͏ OYO͏͏ plans͏͏ to͏͏ use͏͏ a͏͏ combination͏͏ of͏͏ debt͏͏ and͏͏ equity͏͏ to͏͏ finance͏͏ the͏͏ acquisition,͏͏ allocating͏͏ USD͏͏ 250͏͏ million͏͏ from͏͏ its͏͏ recent͏͏ fundraising͏͏ and͏͏ existing͏͏ cash͏͏ reserves.
Rapid͏͏ Expansion͏͏ in͏͏ Hotel͏͏ Count:
The͏͏ travel͏͏ tech͏͏ chain’s͏͏ hotel͏͏ count͏͏ increased͏͏ from͏͏ 12,938͏͏ at͏͏ the͏͏ end͏͏ of͏͏ FY23͏͏ to͏͏ 18,103͏͏ by͏͏ the͏͏ end͏͏ of͏͏ FY24,͏͏ representing͏͏ a͏͏ 40͏͏ per͏͏ cent͏͏ growth.
“The͏͏ acquisition͏͏ will͏͏ add͏͏ approximately͏͏ 1,500͏͏ hotels,͏͏ bringing͏͏ the͏͏ total͏͏ count͏͏ to͏͏ nearly͏͏ 20,000.͏͏ With͏͏ an͏͏ average͏͏ of͏͏ 110͏͏ rooms͏͏ per͏͏ Motel͏͏ 6͏͏ hotel͏͏ and͏͏ a͏͏ higher͏͏ average͏͏ room͏͏ rate,͏͏ this͏͏ will͏͏ significantly͏͏ boost͏͏ OYO’s͏͏ topline,”͏͏ a͏͏ source͏͏ stated.
Motel͏͏ 6͏͏ operates͏͏ 1,500͏͏ franchised͏͏ hotels͏͏ throughout͏͏ the͏͏ US͏͏ and͏͏ Canada,͏͏ along͏͏ with͏͏ extended͏͏ stay͏͏ properties͏͏ known͏͏ as͏͏ Studio͏͏ 6.
Prior͏͏ to͏͏ the͏͏ acquisition,͏͏ OYO͏͏ projected͏͏ its͏͏ PAT͏͏ to͏͏ increase͏͏ more͏͏ than͏͏ threefold͏͏ to͏͏ INR͏͏ 700͏͏ crore͏͏ in͏͏ the͏͏ current͏͏ fiscal͏͏ year͏͏ compared͏͏ to͏͏ FY24.͏͏ OYO͏͏ recorded͏͏ its͏͏ first-ever͏͏ profit͏͏ after͏͏ tax͏͏ (PAT)͏͏ of͏͏ INR͏͏ 229͏͏ crore͏͏ in͏͏ FY24,͏͏ followed͏͏ by͏͏ a͏͏ profit͏͏ of͏͏ INR͏͏ 132͏͏ crore͏͏ in͏͏ Q1͏͏ FY25.͏͏ Additionally,͏͏ OYO’s͏͏ Adjusted͏͏ EBITDA͏͏ rose͏͏ by͏͏ 215͏͏ per͏͏ cent,͏͏ reaching͏͏ INR͏͏ 877͏͏ crore͏͏ in͏͏ FY24.
