Ritesh Agarwal, the founder of Prism the parent company of hotel platform Oyo discussed the acquisition of the G6 portfolio from Blackstone, which it acquired for $525-million, in all-cash deal.

Agarwal argued that the G6 portfolio is well worth the half billion paid for the asset, which includes 1,500 U.S. and Canadian hotels that generate $1.7 billion in gross room revenue annually.

”So a lot of people who reacted, who did not know about G6's earnings or EBITDA and so on, they reacted saying: 'just half a billion?' And I think that talks a lot to saying this brand is truly worth a lot more,” he said. Blackstone had paid $1.9 billion for the G6 portfolio in 2012.

“It’s an incredibly loved brand, and franchisees of Motel 6 or Studio 6 say they make more money doing this business than any other brand,” Agarwal continued.

Buying from Blackstone

Agarwal noted that Blackstone did an exceptional job with this company, transforming it to a totally different business, which is now asset-light and fully franchised.

“On the other hand, they were able to build up brand, which is very successful. So they returned a billion dollars to shareholders over a period of 10 years. So congratulations to Blackstone,” he said.

Agarwal added, noting that Oyo does not plan to integrate these three brands, but Studio 6 will be a big focus because “extended stay is probably the hottest, invisible opportunity in the world of hospitality today.”

The tech opportunity

”We believe in today's world there is no business, which is not a technology business. If you aren't using technology, you're possibly just not a good operator of a business,” Agarwal said.

In terms of growing the new business, Agarwal is a big believer in using brand.com to drive revenue.

He added: “We see a lot of upside here and the way to use technology is you grow revenue and to grow revenue.”

There’s also the potential to use technology to make things easier for the owners and managers of properties

"It's not getting cheaper to run hotels. So how do we make sure that our franchisees still continue to believe that," he said.

By Patrick Whyte