Operator: Our next question is from the line of Steve Ferazani with Sidoti & Company.
Steve Ferazani: Bradley, Carolyn. Just some follow-up on the Australian margins question. How much pricing power are you starting to see there? And how much can margins be expected by timing of contract rollovers?
Bradley Dodson: Let me address the first part. I would say that we’re seeing average daily rates for Australia — that’s some of the — well, I’ve been working with the business for over 10 years now. This is the highest rate that I’ve seen. We’re running AUD180 — AUD109 a night toward the village and what we’re seeing, which we’ll put somewhat — I mean, we’ll mitigate that, but it’s a good thing, is that customers are beginning to be worried about availability of rooms in Australia, and specifically in the Bowen Basin. And their ability to lock up on a take-or-pay basis, even small increments of peaking needs for turnarounds and maintenance work. And typically, if they offer a take-or-pay that we won’t get top line pricing, but it’s good pricing.
Where we’re seeing some of the incremental is always on the casual rooms where if a customer won’t commit to a multi-month a customer will commit to or multiyear contract, they’re going to be casual rates, and those typically tend to be much higher than the blended rate.
Steve Ferazani: And then on contract rollovers and how that can affect top line and pricing?
Bradley Dodson: We locked in a big chunk of our Bowen Basin rooms in the last 6 months on a 5-year basis with — I’m specifically thinking about 2 clients. And so I don’t have the specific number in front of me, but I can think of only one 400-room contract that will roll over midyear next year in the Bowen Basin that we need to work on. There are certainly odds and ins in between that, but there’s a big chunk of rooms, order of magnitude, I think, is about 3,000 of the 6,000 that are occupied today that are locked up for 5 years.
Steve Ferazani: Great. Okay. And then the other side of that, which has been the labor costs that you talked last quarter and you mentioned it on wider recruitment efforts. I know the difficulties and pieces and getting it to Australia, can you talk about progress there? And are you finding any more success? Or is it still challenging?
Bradley Dodson: I would say we’re trending in the same direction, but I would not say that it’s moved materially yet. We still have a fair amount of vacancies. We’re still struggling with temporary labor. As we mentioned in the past, it costs more. It’s less productive. It’s less safe. And it also puts pressure on the full-time staff because they end up having to pick up the slack. So the team is acutely focused on it. I think we’re putting the right people in place to manage that. But we’re — I’d say we’re pretty much in the same spot we were at the end of the first quarter. And so we’ll have to continue to improve that. I’m cautiously optimistic we’ll get some contract relief as it relates to labor on some of that, that will help mitigate it.
Steve Ferazani: Perfect. And then if you could provide a little bit more color on how turnaround activity is playing out this year versus last year in Canada. Because we look at your billed rooms and obviously that includes Sitka, so it kind of high — is what the actual trend is. Can you give us any kind of a clearer sense on what you’d say even if it’s not a hard number, turnaround versus last year in terms of rooms?
Bradley Dodson: Yes. I mean we had — we came in thinking we were going to be up 10% to 15% in turnaround activity, ’23 versus ’22. So I believe we’re going to be up, but more in the 5% to 7% range, so about half of what we were expecting.
Steve Ferazani: Okay. And you think that’s labor costs, no issues with wildfires?
