Estevan– Over five years ago, Bryant Ko saw a newspaper story about how things were happening in the Bakken and that Estevan was the place to be. Having done well in his business of providing tutoring to Asian-Canadian families who sought to send their children to the best Ivy League schools, he was looking for a place to invest his money. He decided to buy the Derrick Motor Hotel, a long-time fixture in the Estevan accommodations and bar scene.
Along with the hotel came the new, nearly-complete Smitty’s restaurant, but one which was tied up in city hall red tape and would not open for a year until after the purchase.
Now the hotel, along with its bar, are closing. Smitty’s will remain in operation.
“We’re closing down the hotel and bar Feb. 13,” said Grant Kim, general manager of the hotel, bar and restaurant. He has rotated back and forth from Vancouver to Estevan for those five years, but spent most of his time in Estevan since last summer, filling in for the reduced staff.
“We cannot incur any more debt. It’s been very slow since the oil shock,” he said. That slow period has now been almost one-and-a-half years, during which time the owners have been injecting capital into the operation.
“We can’t be doing that anymore,” Kim said on Jan. 21.
The “for sale” sign went up in early January.
Asked if it’s been a struggle, Kim replied, “Big time.
“I’m sure the other hotels are not happy about the situation.
“I’ve been working the front desk myself.”
In a way the owner dodge a metaphorical bullet, as there had been plans in place to expand the hotel.
Kim said, “We were just about to start expanding. We were finalizing the drawings.”
He’s glad they didn’t go ahead with the project. “It would have only made it worse,” he said.
In the bar, a long-time popular haunt in Estevan, sales were reduced a bit.
“If it was separate, alone, we wouldn’t have to shut it down. But it’s the same building,” Kim said.
If the bar was detached, it would be kept open.
Smitty’s, too, has been affected. For instance, the Derrick’s website lists free hot breakfast at Smitty’s during your stay at the hotel, likely a response to other hotels in Estevan including breakfast with your stay.
“It’s a dead town now, pretty much,” Kim said. “On the weekends, there’s hardly any traffic.”
There’s also a lot more competition. Since the Bakken boom took hold in 2008, Motel 6, Best Western, Microtel, Suburban Extended Stay (and a subsequent expansion), Atco Lodge (now closed), Civeo Boundary Lodge (formerly PTI) and Western Star Signature Hotel have all opened. A foundation was poured for a Holiday Inn that was never completed. That’s in addition to the existing hotels, like the Derrick, that had been in place for decades.
With the completion of the Boundary Dam Integrated Carbon Capture Project, then the oil shock, demand for accommodations has dissipated.
“The demand is reduced but the supply has increased. Everyone’s lowering their prices like crazy. There’s no workers. What can you do?” Kim said.
“I had to lay off 23 employees, and some casual people. It’s totally beyond our control,” he concluded.
