Workforce Accommodation

Quarterly Industry Watch

Q1 2015

 

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Every day, Orissa Software’s remote camp management tools transact, process, and report on hundreds of thousands of accommodation, food service, and guest management activities, from meals scans to reservations to room status changes, and more.

This volume of data gives us unparalleled insight into the remote workforce housing industry. Backed by a 14-year history and more installations in North American energy exploration zones than all other solutions combined, Orissa is uniquely positioned to provide credible reporting information.

Each quarter, we’ll present data-driven insights ranging from regional market trends to operational statistics.

About The Data

Sample Size:

Over five million resident days and more than 15 different camp installations

Average Camp Capacity:

1,100 beds

Data Range:

January 1, 2014 to March 31, 2015

Geographical Representation:

Alberta Oilsands, U.S. Fracking, Western Canada, Other U.S.A.

 


 

Summary

The camps in our data set did not see a significant reduction in operations in the initial wake of the drop in oil prices. Supported by notable increases in average length of stay in most regions, as well as strong reservation activity in the Alberta oilsands, higher first quarter occupancy rates in 2015 vs. 2014 seem to indicate a tempered reaction to lower energy prices.

In our Q2 snapshot, we will update the information provided here in addition to providing snapshots at a more micro level, from room management to operations data.

 


 

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Our primary observation of year-over-year first quarter occupancy rates was the less than expected impact of declining West Texas Intermediate (WTI) prices. For the camps in the data set as a whole, the percentage of Q1 2015 occupancy actually exceeded Q1 2014, despite a $40 drop in average monthly WTI prices. There were, however, regional variations in the degree to which Q1 2015 exceeded Q1 2014.

 


 

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With only a slight decline in U.S. camps outside of the U.S. fracking region and a significant increase in the Alberta oilsands region, the percentage of first quarter occupancy rates across all regions combined rose from 54% in 2014 to 61% in 2015. Knowing that occupancy rates may lag a quarter or more behind any actual reduction in exploration and construction activity, we await Q2 2015 occupancy data with interest.

 


 

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Average length of stay across all regions fell slightly, from 14 days in 2014 to 13 days in 2015, driven primarily by the Alberta oilsands. These decreases were somewhat offset by increases in Western Canada, possibly as a result of longer work rotations put in place to help reduce rotational travel costs.

 


 

Monthly Occupancy

 

With comparable average lengths of stay across all regions, higher occupancy was supported by an 11% increase in reservations across all camps in the data set. Alberta oilsands was responsible for the vast majority of the increase, more than offsetting declines in U.S. regions. As with the overall occupancy rate, we expect that reservation data in Q2 2015 could provide markedly different results given the passage of a subsequent quarter at sub $60 WTI.

 


 

No Shows as % of Reservations

We also observed a decrease in the number of no-shows — as a proportion of total reservations — from 22% to 18%, explained in part by the increase in reservations. We suspect that in this environment, the reduction could be a result of camp operators and site operators being more diligent with following reservation requirements in order to optimize room utilization.
Notably, the rate of no-shows in U.S. fracking is double or more than that of the other regions in the data set, which could be due to the larger number of open camps in the region. This is in contrast to closed camps, which are owned directly by a producer or large camp operator and occupied for the most part by employees of or vendors to those entities.