Skift Viewpoint
There are a number of strategic growth investment opportunities in the travel technology sector and Blackstone wants to be part of them.
Justin Dawes
Blackstone Group LP said Thursday it plans to acquire a majority stake in a hotel accounting technology company M3 — Expect more travel tech deals in the future.
this Asian American Hotel Owners AssociationThe firm, which says it represents nearly 20,000 hotel owners and 60% of U.S. hotels, is teaming up with Blackstone Group to make its first investment.
Georgia-based M3 provides back-office hotel software for accounting, workforce management and business intelligence, as well as accounting staffing. The company counts more than 1,000 hotel operators and management companies as customers, representing more than 8,000 hotels in North America.
The transaction is in progress Blackstone GrowthThe firm’s strategic growth equity business. The division previously invested in $65 million in Series B funding In 2021, Hotel Engine completed a funding round, making M3 the second travel tech company in its portfolio.
“Hopefully this is the second one,” he said Ramsay Ramsaymanaging director at Blackstone Growth. “We are very excited about this category. There is a lot going on in the travel tech space.”
Other Blackstone Growth investments include Cloudinary and dynamo. An independent internal business unit was established last year. Acquired Cvent for $4.6 billion.
What’s next for M3?
M3 founder John McKibbon said in a statement that this is the first equity investment M3 has received. The transaction price and terms have not been disclosed.
“This is a shareholder liquidity event because the business is profitable,” Ramsey said. “So the most important thing for us is growing the business.”
Ramsay said they plan to add new back-end products for hotels.
But there is an immediate opportunity to market existing products to owners and operators of Blackstone Group’s $336 billion hotel business. These include G6 Hospitality’s Motel 6 and Extended Stay brands.
“We were able to do this because we called a lot of hotels. Motel 6 is one of our investments, and a lot of the owners there used M3 and gave us positive feedback,” Ramsey said. “I didn’t know who M3 was until we took the time to look at our hotel portfolio.”
There’s also a big opportunity to market to AAHOA members, many of whom own just one hotel. Individual hotel owners were one of the last groups to go digital, and Ramsey said they’re hard to reach because owners often wear multiple hats.
“They really take the advice of the industry association as gospel,” Ramsey said. “So I can’t stress enough. [AAHOA] This is their first investment.”
