Workforce Accommodation

Quarterly Industry Watch

Q2 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.

This quarter, we have assembled comparative statistics over q1 and have augmented our findings with additional key performance indicators.

About The Data

Sample Size:

Over 1.8 million resident days in CampWare™

Average Camp Capacity:

1,128 beds

Data Range:

January 1, 2015 to June 30, 2015

Geographical Representation:

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

 


 

Summary

While the end of the second quarter of 2015 represented the sixth consecutive month WTI prices were held to USD 65.00 or less, we observed a neutral to slightly positive impact on metrics underlain by reservations and revenue. However, as the region most sensitive to rig count decline and exploration decline — and given the ease with which shale activity is de-mobilized — the U.S. fracturing region was the one notable exception, having seen more significant negative impact in its revenue-related metrics. Guest service metrics tracked were equally neutral, possibly as the result of preserved staffing levels despite the drop in energy prices.

In the third quarter, we at Orissa anticipate maintaining the quarter over quarter observation of the metrics in this quarterly Industry Watch, in addition to further expanding the number of guest service and operating metrics tracked.

 


 

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Occupancy rates fell across all regions sampled, with the most significant drop observed in the U.S. fracturing region. Consistent with the continued rig count decline reported by the US Energy Information Agency, U.S. fracturing region occupancy fell from 50% in Q1 to under 38% in Q2. While the CAODC reports a similar decline in rig count and utilization in Canada, turnaround and shutdown projects in the sampled regions could be supporting more stable occupancy levels.

 


 

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As with occupancy levels, the average length of guest stay remained relatively static quarter over quarter in all regions sampled, with the exception of the U.S. fracturing region. While stay length varied between 2-7% in other areas, the U.S. fracturing region experienced a notable decline of 22%, dropping from an average of 18 to 14 days.

 


 

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In all regions combined, we noted a quarter over quarter increase in reservations of almost 11%, which is largely attributed to booking growth in the Alberta oilsands region. Given its scale, the Alberta oilsands region’s 20% increase in reservations more than offset a 22% decline in Western Canada.

 


 

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Furthermore, we noted that nearly 40% of all reservations occurred within seven days of expected arrival. A planning window this short invariably prevents camp operators from optimizing staffing and procurement. With rising pressure on costs, operators of closed camps in particular might opt to penalize short booking notice periods. Similarly, open camp operators could choose to incentivize greater advanced booking windows.

 


 

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Cancellations and no-shows also affect staffing and procurement planning. In our sample, over 10% of all reservations resulted in no-shows or cancellations, with the majority occurring “last-minute” or within 24 hours or less of expected arrival.

In addition, the average length of stay for lost bookings was 10 days, compounding the impact of no-shows and cancellations and making it incredibly difficult to plan staff and food service levels. Again, with increasing operating cost pressures, owners or operators could reasonably be expected to more strictly enforce no-show and cancellation penalties in their housing agreements with contractors.

 


 

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Tracking check-out data, we observed that the frequency of camp turnover remained basically unchanged quarter over quarter. Of interest, however, are the regional differences: the Alberta oilsands region and the U.S. fracturing region experienced a full turnover in seven to nine weeks — with 11%-13% of total rooms checking-out every week — whereas other USA and Western Canadian regions turned over in half that time or less.

 


 

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In following the timeline of check-outs, we tracked the number of hours post-check-out that a room remained in “uncleaned” status. Given anecdotal reports of staff reductions and cost controls across the industry, a universal rise in this metric might have been expected. However, the Alberta oilsands region and Other USA camps reduced the number of hours a room remained uncleaned, while the U.S. fracturing region and Western Canada saw an increase, with the U.S. fracturing region experiencing the most significant increase at 35%. Taking into account the U.S. fracturing region’s reduced occupancy rate, this is not unexpected — the urgency to make a room available is not a driver when surplus capacity exists.

Also of note was the fact that Western Canadian camps left rooms uncleaned the greatest length of time by a significant margin, but, on the whole, also turned over most rapidly by a significant margin.

 


 

Screen-shot-2015-08-10-at-9.42.41-AMAs the final metric in the guest room timeline, we observed the number of days a room remains vacant after guest check-out. Across all regions, this metric remained relatively stable from Q1, with most camps reporting a 3–3.5 day room vacancy following a guest’s departure. As with occupancy and stay length, the U.S. fracturing region was the exception at nearly five days.