Quarterly Industry Watch
For almost 15 years, Orissa Software Inc. has provided accommodation, food service and guest management facilities with the highest standard of customized camp management solutions— from reservations to meal scans, management activities and more.
Orissa’s fully integrated software—CampWareTM—offers unparalleled insight into the remote workforce housing industry. Today, it’s the number one provider of workforce accommodation software in North America, with some of world’s largest oil companies, camp operators and caterers as clients.
We’ve gathered comparative statistics from q1 and q2, and expanded our findings for this quarter with supplementary key performance statistics.
About The Data
Over 1.6 million resident days in CampWareT
Average Camp Capacity:
July 1, 2015 to September 30, 2015
Alberta Oilsands, U.S. Fracturing, Western Canada, Other U.S.A.
Q3 2015 could be characterized by the sharp decreases in guest activity in the U.S. Fracturing and Western Canadian regions. With U.S. shale production expected to continue its decline, it remains a possibility that revenue historically tied to shale activity will fall even further. The Alberta Oilsands region, by contrast, showed resilience in occupancy levels and even saw an increase in reservations quarter-over-quarter. Guest service metrics, with a small number of regional exceptions, remained at q2 levels. q4 will bring the start of winter drilling which combined with optimism in gas plays could be result in a recovery in Western Canadian occupancy rates.
Occupancy in the U.S. Fracturing region once again fell relative to the prior quarter—an unsurprising result to most observers. Less expected, however, was the magnitude of the fall – a 13-point decline from Q2 to Q3, indicating current occupancy is less than half the level sampled in Q1. The magnitude of the U.S. Fracturing region decline was paralleled in
Western Canada, with the latter occupancy plummeting to 36%. This metric reflects a continued retraction of spending in exploration and drilling. As a whole, average occupancy across camps sampled has declined less dramatically, from 52.5% in Q1 to 41.5% in Q3, buoyed by the Alberta Oilsands region.
Trending similarly to occupancy rates, the U.S. Fracturing and Western Canadian regions reported reductions in average length of stay, likely the result of a resumption of typical work rotations like a 10-4, with the intention of reducing overtime costs. In itself, optimizing work rotations by cross-shifting will improve room utilization. The Alberta Oilsands were the only region to show a notable increase in length of stay, with the Q3 number being more than 1.5 days longer than in Q1.
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.
With the increase in total reservations, was a shift in the classes of rooms booked. In Q1, more than 15% of rooms reserved were of the “Executive” or “VIP” type;. However, by Q3 these classes made up just 5%. Standard rooms made up 90% of all bookings in Q3—a non-trivial increase from 72% at the beginning of the year, and again indicative of an environment focused on operating cost reductions.
In Q2 2015, we highlighted that nearly 40% of all reservations occurred within seven days of expected arrival, a number which remained virtually unchanged in Q3. Having noted no new incentives or disincentives to encourage greater advance booking, we expect this metric to hold at current levels and with it, the compressed operations planning window for camp operators.
Cancellations 24 hours and 72 hours prior to expected arrival increased in Q3, while the proportion of no-shows reverted to Q1 levels just above 5%. Notably, the no-show number alone wiped out 1⁄4 of this period’s growth in reservations. Such revenue leakage—compounded with the significant number of short-notice cancellations and tight reservation windows—likely exacerbates the challenging environment for camp operators noted in our Q2 update.
Frequency of camp turnover remained largely unchanged from prior levels, with full turnover occurring in the U.S. Fracturing and Alberta Oilsands regions in 7 to 9 weeks, while the other regions turned over in 2 1⁄2 to 3 1⁄2 weeks.
Despite experiencing an increase in guest activity in Q3, the Alberta Oilsands region showed the most significant rise in the average time a room remained uncleaned post-checkout. We attribute this rise to a reduction in housekeeping services by many operators, from daily frequency to two or three times weekly. Meanwhile, despite fewer guest stays, Western
Canadian camps continued an upward trend in this metric, further corroborating the effects of reduced housekeeping frequency. As noted in the Q2 update, given excess capacity in Western Canadian camps, the ability of camp operators to reverse this trend is greatly impaired.
The count of rooms removed from booking eligibility due to removal or mothballing declined 9% in Q3, after remaining virtually the same in the first two quarters of 2015. With shrinking occupancy, we expect camp operators to decommission or even demobilize assets, thus reducing capacity in an effort to lower step-fixed operating costs and improve room utilization percentages.
As in Q2, this metric remained stable quarter over quarter, with the exception of the U.S. Fracturing region, which saw the average number of vacant days post-checkout increase by over 1.7 days or 36%. However, as with the Average Hours Rooms Uncleaned Post Check-Out metric, the drive to turn over a room diminishes when excess capacity persists.