Williston, N.D., hotel owners cautious about expanding business too much

WILLISTON, N.D. -- With an oil boom driving 100 percent occupancy rates at The El Rancho Hotel and a restaurant that is always packed, many business owners would have expanded or built new hotels.

Not Cyndy Aafedt.

The majority owner of the Williston hotel said she's influenced by her father, Ardean Aafedt, who was an owner of The El Rancho when oil prices dropped in the mid-1980s.

"If you're from Williston and you lived through the bust or if a close family member did, you approach everything differently," said Cyndy, 50.

Ardean, who is now retired but continues to be a minority owner of The El Rancho, said business at the hotel, restaurant, lounge and coffee shop dropped about 30 percent during the bust.

"It was just like you closed the doors a third of the way," Ardean said. "It stayed that way for many months."

To get through it, the partners had to lay off about 20 percent of the staff, invest some of their own money and get an arrangement with the bank that allowed them to pay only interest on their loan.

Gradually, business improved, but Ardean watched many other businesses go broke.

"Some people never survived. They just went under," said Ardean, 80, who splits his time between Arizona and North Dakota.

Now, oil activity has brought so much business to The El Rancho that calls for reservations have overwhelmed the hotel's phone system.

New challenges

And along with the surge in business has come an entirely different set of challenges for Cyndy and her business partner, Howard Klug.

Cyndy recalls struggling to find enough service industry employees as long as eight years ago, when many waitresses and housekeepers who had spent their careers working in the industry retired.

Competition with the oil industry made it even more difficult to find workers. The hotel employs many international workers on six-month visas in order to have enough staff. Recently, the coffee shop had to close early for a few weeks because a new set of workers hadn't arrived yet.

Until about a year ago, Cyndy continued to make it a priority to rent rooms to the traveling public rather than contract with oil companies for employee housing, as many of the Williston hotels do.

But that could mean 60 check-outs a day for the 92-room hotel, and staffing that level of activity was burning people out.

"I don't know if we'd be standing if we had kept that pace up," Cyndy said.

So she decided to contract with an oil company for 95 percent of the rooms, a decision she calls the most difficult business decision she's made.

"I felt like a failure when I did it," Cyndy said.

But that arrangement means staff can rotate the housekeeping schedule and deal with only one person making reservations for the bulk of the rooms.

The hotel is still able to accommodate other guests for special events or weekends and can find rooms for people who need to attend a funeral or visit someone in the hospital, Cyndy said.

"I feel like in a way, we're helping the community more than we were a year ago," she said.

The hotel charges about $120 a night, which is lower than many Williston hotels. Some have told Cyndy she could charge as much as $250 a night and still have full occupancy, but she's resisted raising the rates.

"You've got to be able to look in the mirror in the morning. You got to have some integrity, too," Cyndy said. "Maybe I'm a bad businessperson."

Being content

Sometimes, Cyndy regrets that she didn't buy land for a new hotel or start another business venture, but she said she's decided to be content with the high occupancy and being able to charge $120 a night when her father once saw 30 percent occupancy and $23 a night rates.

Ardean said even though he sees signs that this oil activity will be long-term, he will continue to be cautious.

"I've always operated more conservatively," Ardean said. "I caution my family to think about and prepare for things that might be more difficult in the future. It's hard to think that something that's got the momentum that this has could ever stop."

Even though Ardean continues to be cautious, he sees signs that this is not like the boom he experienced in the 1980s.

With the investments oil companies are making in North Dakota on infrastructure, "it sure looks like they're preparing for a long-term and increasing supply of oil," Ardean said.

Dalrymple is a Forum Communications Co. reporter stationed in the Oil Patch. She can be reached at adalrymple@forumcomm.com or (701) 580-6890.