Relocatable accommodation services providers profits dive

Resources slowdown hits mobile accomodation | The Australian:

FOR years, Fleetwood developed caravan parks for sunseekers wanting a beach vacation. Then global commodity prices shot up and the units catered to an entirely different crowd: contract workers jetting in from as far as away as Bali to work on Western Australia's mega-pits or big gas-export projects.
But the recent slowdown in Australia's resources industry is hurting companies like Fleetwood as profits slump and accommodation goes unlet, prompting some to focus on holidaymakers once more.
"The significant drop in commodity prices during the year caused delays and cancellations to resources projects that flowed through to demand for manufactured accommodation," Stephen Price, Fleetwood's chief executive, said.
For many Australian communities, the accommodation camps represent both the opportunities and cost of a China-led resources boom that spanned a decade. On the one hand, rising investment by the likes of mining giant Rio Tinto and oil and gas producer Woodside Petroleum in remote towns created jobs and infrastructure.
But the influx of workers -- some of whom earned $200,000 a year -- also triggered a housing shortage and drove up the cost of living for ordinary residents.
Buying a Big Mac meal in Karratha, a gateway town to the Pilbara, costs a lot more than what customers pay at McDonald's in Sydney.
Housing workers in former holiday parks or constructing camps from scratch aimed to solve the shortage of accommodation. Swimming pools, gyms, sports pitches and even giant chessboards were built to keep workers happy after long shifts in a dusty region where temperatures frequently top 40C.
But many of the temporary camps are now grappling with falling rental prices and occupancy -- especially in WA, where the workforce is beginning to thin out. Hopes that Woodside would expand its $US15 billion ($16.3bn) gas-export project near Karratha and employ thousands more workers were dashed when a drilling campaign failed to find enough reserves.
Rio Tinto is also seeking to cut $US5bn in costs, including in its iron ore business.
WA-based Brighthouse specialised in developing caravan parks for nearly two decades after it was founded, shifting only to target resources in 2008 as mining investment accelerated.
At the peak of the boom, resources work accounted for half its business, but this has since fallen to 30 per cent.
David Holland, the company's principal strategist, sees more opportunity in chasing the tourist dollar and building retirement villages.
"The boom in that kind of (resources) work is over," he said. "There is a progression from temporary units to a smaller, more permanent operational workforce."


reality engine

Creative solutions for small business in Perth

Join our mailing list.

Be the first to know about new products and get early access to all of our sales.

We respect your privacy.