Temple - Business In Focus

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MARCH 2015
Fort McMurray is best known for being a major hub for oil sands development in Canada. In recent years
it has become a true “boom town” (both as a result of the oil sands industry development and tourism
industry growth), and so the need to expand the number of hotels in the area grew.
Written by Mark Golombek
T
emple Hotels Inc., a real estate investment trust (REIT)
on the TSX stock exchange, recognized that growing
need and decided to shift some of its focus and
resources to the Fort McMurray area. In 2005 the investment
company entered the hotel business with the acquisition of
Temple Gardens Hotel & Spa in Moose Jaw, Saskatchewan.
Temple entrusted the management of this property to Atlific
Hotels, one of the leading hotel management companies in
Canada. Thus began a successful and trusted partnership that
would eventually span numerous hotels across the country,
including those in the Fort McMurray portfolio.
Atlific Hotels is a Canadian company that manages over 60
hotels across the country, seven of which are concentrated in
the Fort McMurray area. That makes them a strong contender
in the market. We spoke with Area Director Jean-Marc Guillamot to learn more about the ups and downs of the hotel
industry in Fort McMurray.
No doubt, oil sands production has given Fort McMurray a
significant economic boost. Fort McMurray is continuously
improving its infrastructure, from building new stadiums
and highways, to new power plants and landfills. All of these
projects have large companies bringing subcontractors into
Fort McMurray, and the people need somewhere to stay.
Temple Hotels Inc., already familiar with the Fort McMurray
area from the apartment building side, recognized an
opportunity on the hotel accommodations side
and seized it. The mandate of the investors
and the Real Estate Investment Trust
(REIT) was for the hotels to position themselves in places of
strong activity in Canada’s natural resources sector. “It started
in Moose Jaw with potash, and then Yellowknife with Chateau
Nova and diamond resources,” explains Mr. Guillamot. “2007
saw the oil sands gaining momentum in Fort McMurray, so
the first acquisition there was the Clearwater Suites Hotel,
which at the time was the most expensive purchase per
room in North America.”
Just one month after the first acquisition, Temple purchased
three more properties in Fort McMurray, and with Atlific Hotels
managing these properties, it enabled both companies to
gain a solid foothold in the market. From there, they expanded
their portfolio and today they own close to forty percent of
the Fort McMurray hotel market.
Knowing that fluctuations in the price of oil could disrupt any
portfolio, Temple Hotels Inc. wanted to diversify. “We knew
that the cycle was going to bounce from time to time. Now it is
simply a matter of adjusting with the changing market, doing
the very best that we can to service our clients and achieve
our goals,” shares Mr. Guillamot. Today, Temple’s portfolio
extends from Vancouver to Halifax with Atlific managing all its
hotels for a total 4,329 rooms. Atlific oversees everything from
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BUSINESS IN FOCUS
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Another advantage of Atlific Hotels
managing the Fort McMurray cluster
is their central reservation system and
a comprehensive website, which gives
them flexibility in addressing these different demands. “We have a system at
the front desk whereby if one property is
oversold, we can push reservations right
to another sister hotel,” explains Mr. Guillamot. “Everything has become more
and more centralized, including the
management. We have a healthy portion
of market share here, but we also have
the right product and service standards
that have allowed for it.”
Jean Marc Guillamot
Area Director
hiring to sales & marketing, accounting
and IT, operations, food & beverage and
even construction management.
The diversity of its offerings in Fort
McMurray is one of its greatest strengths,
along with the fact that these hotels
also cater to the particular market needs
of this resource sector. For example,
the company’s portfolio includes the
Clearwater Residence Hotel – Timberlea, which offers a great extended-stay
product with the option of one-ortwo fully furnished apartments with a
full kitchen and in-suite laundry. Alternatively, the Vantage Inn & Suites is a
favourite with business travellers and
for shorter term stays. The portfolio also
includes a higher-end accommodations product with the Radisson Hotel &
Suites Fort McMurray.
Franklin
Suite Hotel
“2007 saw the oil sands
gaining momentum in
Fort McMurray...”
Of course developing and maintaining
the right product for the right market
means keeping one’s fingers on the
pulse of the community. To this end,
Atlific Hotels maintains strong relationships with leaders in the communities
in which it operates. One such relationship in Fort McMurray, through Mr. Guillamot, has led to a partnership with the
primary industrial college, Keyano. “We
have a great relationship with all the
people that they bring into town,” shares
Mr. Guillamot. With more than 2,800 fulltime students and over 13,000 part-time
students, Keyano is the major industrial
college for those who want to operate
in the oil sands industry. “We also have a
very good partnership with the city and
are part of various committees, including
tourism, the Chamber of Commerce, and
Economic Strategies.”
Another example of Atlific’s involvement in the community is with the Fort
McMurray’s MacDonald Island Park, the
largest community centre in Canada.
This unique recreational, leisure and
social centre is set to expand to include
a football and baseball stadium, and
Mr. Guillamot is collaborating with ‘Mac
Island’, as it is known locally, to bring in
events and exhibitions. For every room
booking involving a sporting event,
Atlific is giving back to the local sporting
teams. “There is a big curling championship in 2015. For every room booked,
we will give five dollars back to the
local curling club. This started with the
provincial tournaments, and now we
have graduated to the nationals. We are
leveraging that by creating a new sports
council in partnership with the municipality and tourism board.”
Outside of sports tourism, Mr. Guillamot
also seeks to build a tourism package
around the Northern Lights, which are
gaining interest with the rise of the
eco-tourist and travellers who descend
on the Boreal Forest every year in order
to pursue a tradition of mating with a
view of the Aurora Borealis. “This is an
interesting market that we are working
on,” shares Mr. Guillamot. “We are in
the Boreal Forest and are witness to the
wonders of the Aurora Borealis. Yellowknife has been very successful in putting
Clearwater
Clearwater
Suite Hotel
Residence Hotel
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this market on the map, and I think we can certainly round out
that market’s offerings by providing a first-class product.” This
will call for more infrastructure and the attainment of an ideal
site from which to witness the natural wonder. “Working with
the Provincial and Municipal governments, we are confident
we can successfully put a ‘unique North Alberta Tourism experience’ on the market.”
“Developing and maintaining the
right product for the right market
means keeping one’s fingers on the
pulse of the community.”
Clearwater
Suite Hotel
Finally, Mr. Guillamot and his team are also working with the
economic board and the city to bring in industry-specific tours,
and are planning to offer one or two-day tours to the market
for people to come and learn about the oil sands. Visitors will
stay at a hotel, learn from the economic board and tour an oil
sands site. These industry resources tours are currently in the
planning stages.
Atlific Hotels understands that it must be cautious with any
additional expansion plans in the market due to potential
market instability. “Investors have to be protected and all the
eggs cannot go into one basket,” says Mr. Guillamot.
Radisson
Atlific’s group of hotels in Fort McMurray headed by Mr. Guil-
Vantage
Inn and Suites
Hotel and Suites Fort McMurray
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lamot currently participate in a number of fundraising and
corporate events, as well as supporting local causes like the
SPCA and local sports teams. Deals are in place with certain
industries to collect unused food to give to the food banks.
Atlific Hotels also participates in the Clean the World program,
which collects clothing, shampoos and soaps left over from
the rooms and donates them to less advantaged countries
throughout the world.
Clearwater
Suite Hotel
As is the case with any business in the area, Atlific Hotels must
rise above certain challenges in Fort McMurray; the falling price
of oil has certainly had an effect on everyone in the industry.
Oil sands companies and engineering firms are announcing
downsizing, leading to cancelled or reduced crews. “When the
bust comes, it’s severe and sudden,” shares Mr. Guillamot.
“We have a healthy portion of
market share here, but we also
have the right product and service
standards that have allowed for it.”
Franklin
Suite Hotel
Nomad
Hotel and Suites
Yet short term business remains strong. Although the market has
2,437 rooms, there are times when one simply isn’t available.
This is not a doom and gloom time; it is simply a rough patch,
and Atlific is well set to weather it. “Unfortunately, that is the
nature of the beast. We are going to adapt. The good news is
that we have a lot of sporting events lined up for next year. This
includes two CFL games; one between the Edmonton Eskimos
and the Saskatchewan Roughriders, and the other between
Toronto Argonauts and the Edmonton Eskimos. It also includes
the 2015 Canadian Rivalry presented by the FC Edmonton Pro
Soccer Club, as well as the Western Canada Summer Games.
So I am very excited as to the potential for sports tourism and
sports events – that is going to help us bridge the gap,” says
Mr. Guillamot.
Merit
Nomad
Hotel and Suites
Hotel and Suites
Atlific-Fort McMurray Hotel Group
Fort McMurray, Alberta
P: 780-799-7676
PROJECT SUPPORTERS
www.fortmcmurrayhotels.ca
www.hvac-solutions.ca
Unit 210, 1310 Hollis Street, Halifax NS B3J 3P3, Canada | Phone: 1-888-477-2938 Ext. 206