Workforce Accommodation

Quarterly Industry Watch

Q3 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:

July 1, 2016 to September 30, 2016

Geographical Representation:

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


Summary

Western Canada being the exception, Q3 showed relatively stable occupancy rates and average lengths of stay across the sample relative to what had already been observed in 2016. Worth noting, however, was evidence of a potential shift in guest booking behaviour, with record low rates of cancellation and no-shows, along with longer booking notice.

We see this shift as being important to operators maintaining cashflow-positive properties. With operators also contractually possessing the tools to incentivise or penalize booking behaviour, it’s possible this shift remains in place going forward, given the benefits in this environment.


2016-q3-occupancy-percentage

Across the sample, the stability in occupancy we forecast in Q2 2016 proved to be largely the case in Q3, with most regions seeing no more than a five-point variance, either positive or negative. The lone exception, likely due to a singular regional project expansion, was in the Western Canada sample which rebounded strongly from 13.1% to 24.2%, bringing it closer to the 20% levels observed otherwise throughout the year.


2016-q3-avg-length-of-stay

In Q2 we noted a tightening of the range in length of stay across the sampled regions, with a convergence around the eight-day mark, and a variance of around 1 ¼ days. That trend largely held with the exception again being Western Canada where an 81% increase was observed relative to Q2. This increase is likely attributable to the aforementioned regional project, where fixed-length shifts are more prevalent.

 

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Reservations fell 18% from 77,926 bookings in Q2, attributable, we suspect, to the close of maintenance and turnaround activity in started earlier in the year. We anticipate closing 2016 at close to this quarter’s levels, +/- 10%.


2016-q3-res-by-room-type-all

The proportion of Executive to non-Executive room bookings remained similar to last quarter, with 30% of reservations being in the latter category. Within the non-executive class, far fewer Jack & Jill rooms were booked in Q3 than Q2, falling from 30% of the total to around 5%. This, along with the stable proportion of management-class room bookings points to a steady deployment of operations staff, as opposed to general labour.

2016-q3-percent-1-7-days-of-arrival

The overall percentage of short-notice reservations has remained between 35% and 40% of total bookings since early 2015. Within that segment, as operators focus on immediate-term activity versus longer-term projects, bookings occur with less and less notice. Q3 2016 proved that out again, with over 60% of short-notice being made within 48 hours of arrival, up from 41% at this time last year. As occupancy rates tighten, operators are more inclined to accept short-notice bookings, regardless of the potentially negative impact on operations.


2016-q3-cancellation-24-72-hours

At 2.62%, Q3 2016 saw the lowest cancellation rate since we started tracking the metric in Q1 2015. This is perhaps not surprising in the current environment – with work definitively more scarce, scheduled jobs are more likely to be completed as planned, subcontractors will experience less demand for resources to jump to competing, overlapping jobs, and therefore, fewer last-minute changes will occur.

2016-q3-no-shows

As with cancellation rate, Q3 2016 showed the smallest proportion of no-shows relative to reservations since we began tracking the metric, and likely for the same reasons. Together, the trend to fewer no-shows and cancellations results in a higher confidence in near-term occupancy forecasts, which in turn would reduce camp operator risk around procurement and resource scheduling.

2016-q3-avg-uncleaned

As the Alberta Oilsands service standard improved dramatically from more 40 hours last quarter to just over 15 this quarter, closer to its historical levels under the 20 hour mark. The U.S. Fracturing region, conversely, ballooned over 40 hours from 18 hours last quarter. We suspect this to be an anomoly as more rooms are excluded from scheduled cleaning pending their being put into Off-Market status.


2016-q3-off-market

In Q2, we stated a view that the de-commissioning of assets may have slowed. Q3 proved us wrong, however, with a 61% increase from 21,772 rooms off-market last quarter, to over 35,000 rooms off-market in this quarter. This step change in rooms taken out of booking eligibility was attributable to a small number of operators, however, and was not evident sample-wide.