- Wyndham saw 5% growth in RevPAR at its franchise properties near data center sites.
- RevPAR, a hospitality metric, measures revenue based on occupancy and average daily room rates.
- The boost likely came from out-of-town construction workers.
Wyndham Hotels and Resorts saw a revenue boost from properties located near data center development sites, president and CEO Geoff Ballotti told investors Thursday on the hospitality chain's fourth-quarter earnings call.
"Dozens" of Wyndham's franchised hotels are located "within a 10-mile radius of the top 10 data center projects that commenced in 2024 across the United States," said Ballotti.
While the company benefited from an uptick in major construction and infrastructure development projects last year, properties near major data center sites were a key growth driver.
"The surge in data center demand in construction has become a defining trend in the digital era," said Ballotti.
Those hotels outperformed the rest of Wyndham's US portfolio last year, with nearly 5% growth in revenue per available room (RevPAR), a standard hospitality industry metric measuring a hotel's performance based on its occupancy and average daily room rates.
Ballotti said locations in top data center markets, such as Silicon Valley and Dallas, fueled Wyndham's growth last year, as did emerging data center markets like Jackson, Mississippi, and Columbus, Ohio. He added that the company's sales, marketing, and development teams are focused on these markets.
Increased demand for rooms near data center sites, Ballotti said, has allowed the company to raise prices without penalty.
Data center development sites aren't exactly tourist destinations. Wyndham's fourth-quarter growth likely came from out-of-town construction workers and other skilled laborers, said The Boyd Company principal John Boyd, Jr., who specializes in economic development.
Big Tech companies spend billions of dollars on data center development, much of which goes into the initial construction being done by those out-of-town workers.
"These are major capital investments that take months to complete — there's related infrastructure, there's related engineering," said Boyd.
He said a country-wide shortage of skilled laborers has led to an influx of workers traveling to data center construction sites.
"A lot of these projects require temporary housing for the crew during the process," Boyd said.
Wyndham owns familiar roadside hotels and extended-stay chains like Days Inn, La Quinta, Super 8, Ramada, and Howard Johnson. The company has 9,300 properties in over 95 countries, with its largest market in the US.
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