A new service centre along westbound Highway 401 near Trenton. The stone, wood and glass buildings were designed to meet LEED Silver environmental standards.
You're zooming down the highway trying to reach your destination as quickly and as safely as possible, but with low fuel, hungry kids and a near-bursting bladder, you're due for a roadside break.
Then you picture the rest stop - dingy building, greasy food, scary washrooms. Maybe you can hold off till the next service centre ... or the next?
If you had the chance to redesign a chain of rest stops along a major highway, what would they look like? Ontario is in the midst of overhauling its 23 service stations lining highways 401 and 400, which are Canada's busiest motorways. The goal is to redefine the rest stop experience for the 500,000-plus young, affluent and well-educated motorists who travel these routes every day.
The winner of the 50-year contract to design, build, finance, operate and maintain the chain of service centres - Host Kilmer Service Centres (HKSC), a partnership of Maryland's HMSHost and Ontario's Kilmer Van Nostrand Co. Ltd. - is tearing down 20, 1960s-era centres and replacing them with stone, wood and glass buildings designed to LEED Silver environmental standards.
Come September, when seven centres are fully operational, and by 2012 when an additional 13 come online, travellers can expect the following: two convenience stores per site; more than a dozen quick-service restaurant brands throughout the network; roomier washrooms; free WiFi service; and pet exercise areas. Some of the parking lots will have kiosks where local farmers will sell fresh Ontario produce.
The new centres also present a retail opportunity that comes around once in a lifetime.
A study commissioned by HMSHost Corp. found that more than 50 per cent of motorists on highways 400 and 401 are non-commercial travellers made up of regular commuters, summer tourists, cottage owners and weekend travellers. Drivers are predominantly 25 to 40 years old, college- or university-educated, and have families with young or teenage children. The average household income is more than $75,000 a year.
As retail opportunities go, the chance to get in on something like this is very rare, says Bruce Allen, president of Canadian Tire Petroleum. HKSC picked Canadian Tire to manage the fuel service stations and to install convenience stores adjacent to the pumps. The conversion of all 23 sites to the Canadian Tire gas brand will take place over time as leases with the previous fuel providers expire. The gas stations at 20 of the service centres will have converted to Canadian Tire by 2011.
The highway service centres are a first for Canadian Tire Petroleum, which manages 272 gas stations and 267 Gas+ convenience stores across the country. The deal makes business sense, Mr. Allen says, because these highway drivers are also Canadian Tire's target audience.
Their needs will be reflected in the Gas+ merchandise mix, Mr. Allen says. Besides the usual assortment of beverages and snacks, there will be kids' games and toys, DVDs, books on CD, sunscreen, insect repellent, propane for barbeques and some camping gear.
The 24-hour pumps will be the first LEED Silver gas stations in Canada, Mr. Allen says. The company has even installed the infrastructure for electric vehicle charging stations. "We wanted to be pro-active for when we need to satisfy consumer demand," he says.
When all 23 stations are converted to the Canadian Tire brand, the pumps will generate more than 6 million, 40-litre fill-ups a year, says Mr. Allen. "That's 6 million opportunities to interact with Canadian motorists and hopefully create a very positive experience. And we see an opportunity to cross-merchandise into Canadian Tire stores, Canadian Tire financial-services credit cards, and so on," Mr. Allen says. "There is terrific brand exposure."
HKSC has signed up more than a dozen international and Canadian-owned fast-food restaurant brands, including Tim Hortons, Casey's, East Side Mario's, Extreme Pita, Pizza Pizza, Teriyaki Experience, Yogen Früz, Cinnabon, Starbucks Coffee, A&W, Burger King, Brioche Dorée, Cold Stone Creamery and Quiznos.
The selection will vary from centre to centre, according to HMSHost: "We take into account the size of the centre and the lineup of quick service offerings from end to end of the highways. The intent is to create different choices at each centre to encourage several stops along the way and provide variety to travellers who may want one meal when headed in one direction, and a different meal upon the return trip."
The choice of restaurants is meant to add variety and healthier foods. It may also reflect exclusive relationships that HMSHost already has with such companies as Tim Hortons, Burger King, Quiznos and Starbucks. Drilling down even further, Tim Hortons has its own co-branding arrangement with Cold Stone Creamery in the U.S. and Canada.
It will be interesting to see how HKSC mixes its anchor tenants with complementary food service providers, says analyst Jim Danahy, managing principal at consultancy CustomerLAB.
Pairing a mainstay like Tim Hortons with Cold Stone Creamery, for example, could add "a little sizzle to the steak," he says. However, getting the combinations right could be tricky: "I bet it will take a couple of years to shake out who makes it and who doesn't."
Pusateri's, the Toronto-area gourmet supermarket, is an intriguing name on the food-service roster, Mr. Danahy says. The grocer and HKSC are still in negotiations and declined comment on how the partnership will take shape.
Among the options, Mr. Danahy says, are Pusateri's-branded grab-and-go foods sold in convenience stores. Or Pusateri's might set up a pasta bar or even a mini-grocery store, Mr. Danahy suggests.
"The notion of mini-grocery is a rapidly expanding component of convenience and gas retailing," Mr. Danahy says. "It is a major retail category that's been growing in real estate and square footage for five years."
As far as the overall user experience goes, the province says it will keep a close eye on the service centres. "The provincial government will monitor conditions and services at the centres, while HKSC is required to submit monthly reports about the performance of the service centres and will measure customer satisfaction on a regular basis," says Ministry of Transportation spokeswoman Emna Dhahak.
"It'll be interesting to see if they have now created a holistic view of the rest stop for the 21st century," Mr. Danahy says.
Service-centre facts:
- HMSHost Corp. is an experienced manager of roadside and airport "travel plazas" worldwide.
- Kilmer Van Nostrand Co. Ltd.'s diverse businesses include construction and building products, sports, cable television and publishing, food processing and environmental rehabilitation.
- The redevelopment cost for the first 20 service centres is about $300-million, of which the Ontario government is putting up $200-million and HKSC, $100-million.
- Total sales revenue for HKSC is projected to be $100-million a year, or $9-billion over the 50-year term.
- The centres are being built in three sizes, depending on traffic volume: 9,000 square feet, 15,000 square feet and 21,000 square feet. The busiest centres will feature more restaurants and retail offerings.
- LEED Silver building features include water-efficient landscaping, no chlorofluorocarbons in the heating and cooling equipment; energy-efficient appliances and washrooms outfitted with waterless urinals and touchless faucets
Angela Kryhul
Sources: Ontario Ministry of Transportation; HMSHost