Workforce Accommodation

Quarterly Industry Watch

Q2 2016

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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, along with our 15-year operating history and more installations in North American energy exploration zones than all other solutions combined, gives us unparalleled insight into the remote workforce housing industry.

Each quarter, we assemble and analyze this data, creating resource of comparative metrics and observations that is unique in the workforce accommodation industry.

About The Data

Sample Size:

Over 1.2 million resident days in CampWare™

Average Camp Capacity:

Over 1,200 beds

Data Range:

April 1, 2016 to June 30, 2016

Geographical Representation:

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


Summary

With no major, negative changes in occupancy rates outside of the Western Canada region, and the first positive change in occupancy in the U.S. Fracturing region since its downward slide began in Q1 2015, Q2 proved to be a continuation of the positive trends in revenue-related metrics observed in Q1.

Add the particularly strong reservations activity in the Alberta Oilsands and Other U.S.A. regions, along with the increased mix of higher-revenue, Executive class bookings, we could deem Q2 a relatively strong quarter for workforce housing in the current climate.

With discipline around operating costs and asset utilization now likely engrained among the remaining, stronger operators, future quarters such as Q2 could bring welcomed, positive cashflows.


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As in Q1 2016, the most significant change in the key occupancy rate metric was observed in Western Canada. Falling another seven points since Q1, occupancy in this region is at a level today that is less than 1⁄4 what it was a year ago. By contrast, while its year-over-year number was down, the U.S. Fracturing region showed further evidence of the occupancy rate “floor” we anticipated in the Q1 edition, even posting an uptick in occupancy from 17.5% last quarter to 23.8% this quarter. As rig count in the region remained relatively stable through the summer months as it did through Q2, we expect the same stability in this metric in Q3.


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We further observed a convergence in lengths of stay in this quarter around the eight-day mark, with a range of just 1 1⁄4 days. This contrasts significantly to the week-long range observed in the same period last year, between 8.0 to 15.25 days, and the 10.25 day to 14.25 day spread noted in Q1.

Unexpectedly, this coalescence around the eight-day level eliminated the relatively high occupancies observed Alberta and Western Canada in Q1, with both falling from near or longer than two weeks to today’s levels.

Collectively, we see it as a widening adherence to a shorter work schedule, less overtime, and a normalized days on/off work pattern, following reductions in exploration and construction activity.

Average lengths of stay declined both on a year-over-year and quarter-over-quarter basis across nearly all regions, the exception being a modest year-over-year uptick in the Other U.S.A. sample.

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screen-shot-2016-10-14-at-11-28-41-amWhile stay lengths normalized, the volume of bookings sample-wide increased both year-over-year and quarter-over-quarter following growth in the Alberta Oilsands and Other U.S.A regions. In both cases, we attribute the increased bookings in Q2 to turnaround and maintenance activity in those areas.


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The proportion of Standard (single) rooms booked fell significantly quarter-over-quarter, from 78% in Q1 to 42% in Q2. The differential in bookings was split nearly evenly between 0Executive and Jack and Jill room classes, likely the result of an increased deployment of operations staff over construction and general labour staff.

 

 

 

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At 34% this quarter, the proportion of reservations made within seven days of arrival has remained relatively constant since this time last year. Of note this quarter, however, is a distinct shift in bookings with a 4-7 day notice period to reservations made within 48 hours of arrival. Shorter stays (as reflected in reduced Average Length of Stay) booked on reduced notice are perhaps to be expected, given the sector-wide focus on short-term operations, and away from expansion and growth-oriented activity.


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For the first time in more than a year, fewer than 4% of reservations resulted in cancellations made within 72 hours. With more bookings being made within two days of arrival, this is perhaps not unexpected. No-shows, however, returned to the 4-5% levels seen historically after falling to 2.7% in Q1; somewhat surprising and reflective of a reluctance by camp owners or operators to penalize no-shows. Given the operational challenges no-shows bring, we expect any benefit derived from the reduced cancellations in the quarter was more than erased.

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Despite an increase in occupancy rates in the region, the average time a room remained uncleaned in the Alberta Oilsands extended from 36 hours in Q1 to over 43 hours in Q2. We continue to attribute the longer interval to excess capacity, a reduced staffing rate, and a dramatic reduction in cleaning frequencies to control housekeeping costs. Conversely, accompanying a sharp decrease in occupancy, the Western Canada sample saw a reduction of nearly two-thirds in this metric, implying perhaps that staffing was not immediately trimmed as occupancy fell or as cost cutting measures were being evaluated.


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Rooms off-market, or rooms removed from booking eligibility, declined on a quarter-over-quarter basis, but remained within 6% of the level of 23,000 rooms we first noted in Q4 2015. As additional quarters pass without significant change in this metric, it implies efforts to de-commission assets have slowed, and potentially signals a vote by operators that the current level is the “new normal.”