Hotels see revenue boost from data center boom

TODAY’S STORY

Microsoft, Meta, Google, and Amazon spent a combined $125 billion on investing in and running AI data centers between January and August 2024, per JPMorgan. And data center demand is forecasted to grow by 10% annually until 2030.

This is good news for energy providers like Vistra and GE Vernova since data centers require massive amounts of energy equipment and electricity. It’s also good news for technology vendors that provide things like cooling since efficient cooling is a crucial driver of a data center’s profitability.

There will be some less-obvious winners, too, similar to the GLP-1 boom, when airlines, energy drinks, and stretch mark cream companies stood to profit.

Hotel and resort companies are already benefiting, as out-of-town workers traveling to construction sites require temporary housing for months or even years, depending on the project's scale. Wyndham Hotels and Resorts experienced a revenue boost from its numerous properties located within 10 miles of data center development sites. This group of hotels outperformed the rest of Wyndham’s U.S. portfolio last year, achieving nearly 5% growth in revenue per available room (RevPAR) despite being in markets like Jackson, Mississippi, and Columbus, Ohio, which aren’t exactly tourist destinations.

The data center boom will generate secondary and tertiary effects across various industries.

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