Dickinson Businesses Begin Feeling Slowdown’s Effect: Drop In Oil Prices Has Led To Fewer Customers, Better Employees

Todd Anderson, service manager at T-Rex Conoco in Dickinson, talks to customer Bobby Metz, who came into the shop Wednesday while looking for an oil change. Anderson said business has slowed down along with the drop in oil prices, but said he's somewhat happy to have a reprieve from the chaos of the boom. (Dustin Monke / The Dickinson Press)
Todd Anderson, service manager at T-Rex Conoco in Dickinson, talks to customer Bobby Metz, who came into the shop Wednesday while looking for an oil change. Anderson said business has slowed down along with the drop in oil prices, but said he’s somewhat happy to have a reprieve from the chaos of the boom. (Dustin Monke / The Dickinson Press)

Steve Keinzle noticed a change around the first of the year.

The manager of Mac’s Hardware in north Dickinson said his business catered to many oilfield service companies, both big and small — mostly hot-shot crews and roustabout companies — that would come in and buy everything from tools to flame-retardant gear for employees.

But when the oil prices dropped out, so did much of that business.

“Their budgets went away real fast,” Keinzle said. “And, of course, we felt that effect right away. The traffic is down.”

Many business owners and managers in Dickinson say they’re feeling the effects of the drop in oil prices as much as anyone else. For some businesses, traffic and profits are down. Others report steady customer flow not all that different from a year ago, when oil drilling in western North Dakota was at an all-time high — particularly around Dickinson.
Some say it isn’t all bad. They say they’re happy to have more time to work on projects, improve infrastructure and think ahead instead of worrying about the challenges the oil boom brought them over the past few years.

“It’s a nice reprieve to be able to slow down a little and catch a breath, because once things get going again, (business) will pick up,” said Todd Anderson, service manager at T-Rex Conoco off Third Avenue West in north Dickinson.

Anderson said he’s noticed a definite slowdown in work. Now his crew has time to take walk-in oil changes or fix vehicles without work being scheduled weeks in advance.

“I’d say equivalent to before the oil came,” he said.

On the other side of the building, T-Rex convenience store manager Vicki Nogosek said she is ordering less product than she did in 2014.

“You notice pretty much all day that it has slowed down a lot, just in gas and everything,” Nogosek said.

However, she said there is some good that has come with the slowdown in business.

Better help available

Over the past two years, Nogosek said she’s struggled to find help and often had to fill shifts herself on late nights and weekends because of lack of employees. Now the business is fully staffed, “and it’s really nice,” she said.

“People want to keep their jobs.”

Keinzle said it still isn’t all that easy to find employees, though he doesn’t have plans to hire more people.

“We’re trying really hard to keep our crew,” Keinzle said. “But we won’t be hiring additional crew until it (business) comes back.”

In the meantime, he said, they’re focusing on making the right cutbacks, starting with inventory reduction.

“Where we were a year ago, we don’t need that much inventory this year,” Keinzle said.

 

Busy, but less business

One of the owners of Prairie Maid Laundry, which saw such a business increase during the onset of the oil boom that it doubled the size of its facility, said he has noticed fewer people coming through the doors — even if some days are still a little crazy.

“It’s dropped off — not drastically, but it’s slowed down,” said Jay Wilhelm, co-owner of the laundromat that also offers tanning services.

One of the most impacted areas of his business is its drop-off cleaning service, he said, where people — many of whom have been oilfield workers — can leave clothes to be laundered and picked up later. The loss of many rig crews in the area means fewer people are coming in to clean their clothes.

“It’s slowed down with the guys getting laid off, the crews and companies and individuals that drop off,” Wilhelm said.

 

No more chaos

In the restaurant business, good and steady help wasn’t easy to find during the “chaotic craziness” of the oil boom, Applebee’s general manager Pam Schmaltz said.

Now she has gone from averaging one applicant a week to around 10.

“It’s been nice,” she said. “It’s been something we haven’t seen for a while.”

Sales and the number of guests have decreased, Schmatz said, but the popular bar and grill still has plenty of busy days.

At El Sombrero Mexican Restaurant, Adriana and Filipe Aguirre said their business hasn’t slowed down much. Adriana said if it has, she hasn’t noticed much difference. She suspects her restaurant’s steady prices — which haven’t changed much since they opened nine years ago — have kept customers coming back.

“We’re still busy,” she said.

 

SIDEBAR

Hotel occupancy down in Dickinson

Dickinson hotels, which had occupancy rates around 90 percent at the onset of the oil boom, are at 49.5 percent for the first quarter of 2015.

Year-to-date hotel occupancy rates are down about 7 percent in Dickinson, according to Smith Travel Research. Last year, 56.9 percent of hotels were full in March compared to 44.7 percent this year.

Terri Thiel, executive director of the Dickinson Convention and Visitors Bureau, said the number of hotel rooms in Dickinson has doubled since 2010, when the oil industry first started ramping up in the area. Because of that, the occupancy rates for the first three months of 2015 are close to historic averages.

“I don’t want to say we’re back to a traditional time, but in one sense we are,” Thiel said. “We have more properties and more rooms now, so now you’re taking a dilution factor, too.”