Take Skift
There are numerous opportunities for strategic growth investments in the travel technology sector and Blackstone wants to be part of it.
Justin Dawes
Blackstone announced Thursday that it plans to acquire a majority stake in hotel accounting technology company M3 – and more travel technology deals are likely to come.
The Asian American Hotel Owners Association, which says it represents nearly 20,000 hotel owners and 60 percent of all hotels in the United States, is making its first joint investment with Blackstone.
Georgia-based M3 provides back-office hotel software for accounting, human resources management and business intelligence, as well as accountant placement. The company has more than 1,000 hotel operators and management companies as clients, representing more than 8,000 hotels in North America.
The deal is being run through Blackstone Growth, the company’s strategic growth capital business. The unit previously invested in a $65 million Series B funding round for Hotel Engine in 2021, making M3 the second travel technology company in its portfolio.
“Hopefully the second of many more,” said Ramzi Ramsey, managing director of Blackstone Growth. “We’re pretty excited about the category. There’s a lot of work to be done in travel technology.”
Blackstone Growth’s other investments have included Cloudinary and Dynamo. A separate internal business unit acquired Cvent for $4.6 billion last year.
What’s next for M3?
According to a statement from M3 founder John McKibbon, this is the first equity investment that M3 has made. The price and terms of the transaction were not disclosed.
“This is an event that increases shareholder liquidity because the business is profitable,” Ramsey said. “And that’s why growing the business is the most important thing for us.”
Ramsey said there are plans to add new back office products for hotels.
However, there is an immediate opportunity to advance existing products among the owners and operators of Blackstone’s $336 billion hotel business, which includes the Motel 6 and Extended Stay brands under the G6 Hospitality umbrella.
“We were convinced because we called a number of our hotels. Motel 6 is one of our investments and many of the owners there use M3 and have given us positive feedback,” Ramsey said. “I didn’t know who M3 was until we looked at our hotel portfolio.”
There’s also a huge opportunity to reach AAHOA members, many of whom own just one hotel. Single hotel owners are one of the last groups to digitize their operations, and Ramsey said this group is difficult to reach because the owners often work multiple jobs at once.
“They really take the advice of their industry association as gospel,” Ramsey said. “So I can’t stress enough how important it is that (AAHOA) make this their first investment ever.”
