Hicks on Biz: PTI Group a regional success story - originally published Edmonton Sun, Sept 27, 2013
Quick hospitality quiz.
Where is the world’s fifth biggest hotel?
Hint. Not far from Edmonton.
What company owns this hotel, and is Canada’s largest hotel chain owner/operator?
Hint. It’s headquartered in Edmonton.
Why is this company the single biggest buyer of yogurt in Canada?
Hint. It feeds an awful lot of people every day.
The company is PTI Group Inc. a subsidiary of Houston-based Oil States Inc.
It may be a subsidiary – PTI is headquartered out of a former Costco warehouse on the south side of Edmonton - but it’s a mighty subsidiary.
PTI’s biggest hotel is Wapasu Lodge, a two hour drive north of Fort McMurray, in the middle of nowhere, but just a short drive down a private road to Kearl Lake, Imperial Oil’s massive new oilsand mining operation. At 5,400 rooms, it truly is the fifth biggest hotel in the world.
PTI buys more yogurt than any other Canadian customer because it’s a lunch-bag favourite for the 19,000 plus tradespeople who stay and eat at their 20 lodge-hotels in Western Canada – 16 in the oilsands.
PTI’s hotel rooms are sold to resource companies to house their workers. Wapasu Lodge has only one customer – Imperial Oil. Imperial fills most of those rooms most of the year.
Note I say hotel – not work camp.
In 2004, PTI Group made a dramatic strategic decision.
It had been quite successful at sending trailers to remote worksites for a few months at a time, mobile dormitories with group washrooms and a kitchen.
But it had to differentiate itself, says CEO and President Ron Green. “We decided to design, build, own and operate our own lodges. They would be run as three-star hotels, not work-camps.”
Just nine years later, PTI is Canada’s largest owner-operator hotel chain - 20 different lodges with 19,270 rooms, all built close to major but remote industrial worksites.
In the oilsands, that would include plants operated by Imperial, Suncor, Syncrude, CNRL, Conoco, Statoil and Devon.
It’s a business model, PTI Senior VP and former hotel executive Fred Bannon says, that “the hotel world would kill for.”
A lodge isn’t built unless PTI has a long-term housing contract with one or two anchor tenants. They run, year-round, at over 85% occupancy rates.
Part of the PTI genius is its building model. The hotel rooms – three different types - are all modular and are manufactured in PTI’s own plants outside Edmonton, in Nisku and Acheson.
Around each hotel/lodge “core”, or cores depending on its size, stretch hallways leading to three-story wings, each with about 112 rooms depending on the configuration. All rooms are single, either sharing a bathroom with one other room, or having a bathroom to itself. The module is trucked to the site complete with furniture, then assembled like Lego – “plunk, plug and play” says Wapasu general manager Ashoke Ahluwalia.
You’d never know the lodges are modular, other than a basic exterior industrial look. From the inside, they are just like a normal, classy hotel. The amenities are excellent – Wapasu has eight work-out gyms, summer-time outdoor sports facilities, games rooms and so on. Seven cafeterias feed shift workers around the clock, the food considered first-class. Every room has cable RV, full internet access and its own land phone.
Attracting hotel staff is not an issue, not when salaries are three times higher than in urban Canada. Room and board is included. Staff work three weeks, then have a week off, plus holidays and a $400 a month travel allowance. Housekeepers earn in the six figures. PTI takes good care of its staff. If the lifestyle suits them, employees don’t leave.
There’s a million human-interest stories at every PTI Lodge – from Canada-wide, multi-ethnic work forces, to successful aboriginal staff programs, to environmental standards, to the bears and foxes that share the land.
More stories on PTI can be found on the Hicks Biz blog, www.hicksbiz.com.
But as a regional business story, PTI is one screaming success and a crown jewel of Edmonton’s economy.
Factoids: PTI Group Inc.
Number of employees: 4,000, 3,000 in Alberta, 600 in Greater Edmonton (corporate, engineering, modular manufacturing)
Market share of oilsands housing: 25%
Total rooms in Canada: 19,270
Total rooms world-wide: About 30,000 – 10,000 in Australia through subsidiary The Mac Group, 1,000 in USA.
Oilsand properties (owner-operated unless otherwise stated): Wapasu, 5,400 rooms; Devon (operator), 2,400 rooms, Henday, 2,000; Athabasca, 2,000; Beaver River, 1,000; Conklin, 875; Statoil (operator), 650; Mariana, 620; Anzac, 600; Pebble Beach, 550; Lakeside, 530; Conoco (operator), 475; MacKay River (services), 275.
Other properties outside oilsands: seven hotel/lodges in Manitoba, B.C., Saskatchewan and Northwest Territories with a total of 1,900 rooms.
Estimated gross revenues for PTI in 2011/12 (at 50% of gross revenues attributed to parent company Oil States International): $1.75 billion.