Blackstone Weighs Sale of Budget Hotel Brand Motel 6

(Bloomberg) -- Blackstone Inc.’s real estate arm is exploring the sale of Motel 6 in a deal that could value the budget hotel brand’s holding company at more than $1 billion, according to people with knowledge of the matter.

The New York-based firm is working with advisers and in the early stages of soliciting interest from potential suitors in G6 Hospitality LLC, which owns both Motel 6 and Studio 6, some of the people said.

A representative for Blackstone declined to comment.

Blackstone acquired the brands from the French lodging company Accor SA in 2012 as part of a $1.9 billion deal that included 1,100 hotels. The firm has since sold much of the real estate.  Of the roughly 1,200 Motel 6 locations in the U.S. at the end of last year, more than 1,050 were owned by franchisees, according to a filing.

Carrollton, Texas-based G6 is led by Chief Executive Officer Rob Palleschi. Motel 6 claims to have the highest brand recognition of any U.S. economy lodging brand, in part due to advertising campaigns in the 1980s and 1990s, according to its website.

Motel 6 traces its roots to 1962 when its first location was opened in Santa Barbara, California, charging just $6 per night. Studio 6 is an economical extended-stay chain. A Motel 6 was converted to the first Studio 6 in El Paso, Texas, in 1999 and the brand is now emblazoned on more than 100 properties, G6’s website shows. 

Earlier this year, Blackstone partnered with Starwood Capital Group to acquire Extended Stay Inc., a mid-priced lodging brand, and a real estate investment trust called ESH Hospitality Inc., for roughly $6 billion.

Economy hotel brands like Motel 6 have outperformed the rest of the lodging industry for much of the pandemic. Revenue per available room for the segment was $40.33 for the four-week period that ended on Dec. 18, according to data provider STR. That was an 18% increase from the same period of 2019, outpacing luxury and upscale brands.

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