Lucrative contracts at Grand Canyon up for bid
Published: August 6, 2013 at 2:05 pm
Two of Grand Canyon National Park’s most lucrative contracts, worth an estimated $1.5 billion over 15 years, are going out to bid.
The National Park Service on Tuesday outlined the existing contracted services that include managing nearly 1,000 guest rooms, more than a dozen restaurants and bars, two grocery stores, an RV campground and mule rides at the South Rim to prospective bidders. The new contracts also add valet service at a landmark hotel, eliminate on-site laundry services, set up mobile food trucks, and institute a lottery system for the cabins and dorms at Phantom Ranch.
The Park Service administers 500 concession contracts for everything from water rafting, fishing boats, mountaineering and transportation services that bring in $1 billion annually and periodically offers them up for bid. The proposals for services at the Grand Canyon are due by Nov. 25, with contracts to be awarded by January 2015.
Once the winners are picked, they’ll have to invest a combined $214 million in the first year to expand patio dining and add valet service at El Tovar Hotel to relieve overcrowding, update the rooms at Bright Angel, revamp food services to reduce wait times, convert some concessionaire employee housing to visitor use, and demolish and replace the outdated Maswik South lodge units.
Xanterra Parks & Resorts — the country’s largest park concessions management company — has long held the larger of the contracts valued at $66 million a year. A Xanterra spokeswoman wouldn’t say Tuesday whether the company would compete for a new contract.
A spokesman for Delaware North Parks & Resorts, which took over the current contract from Babbitt Brothers Trading Company, said Delaware North will “strongly consider the new opportunity at Grand Canyon as we have been proud to serve visitors there for a number of years.”
Both contracts have expired and are running on year-to-year extensions. Should they change hands, the successful bidder would have to pay for any improvements made by either Xanterra or Delaware North at the park, estimated at $137 million and $41 million, respectively.
Grand Canyon Superintendent Dave Uberuaga said the Park Service already has decreased that amount by $19 million to put the prominent 70-foot Desert View Watchtower on the east end of the South Rim back into the park’s hands under the new contract. Instead of housing a gift shop, the tower will serve as an interpretive center.
Overnight hikers planning to stay at Phantom Ranch at the bottom of the canyon near the Colorado River could find themselves competing through a lottery for a place to sleep at the cabins and dormitories. Under the new contract, lodging must be provided for mule riders, no more than 25 percent of beds can be booked as group reservations and a lottery system will fill the rest.
Reservations there now are booked far in advance, particularly for the summer months.
The Park Service also is asking prospective bidders to submit creative ideas, separately from the contract, for what could become of an 11,000 square-foot warehouse that has been eyed for an art and river heritage museum.
Uberuaga said he is hopeful that the changes will result in better services for the estimated 4.5 million visitors each year.
“We’re very excited about this business opportunity,” he said.
The Park Service will receive a minimum franchise fee of 9.4 percent of annual gross revenue for the smaller contract and 6 percent for the larger contract that will go to improving infrastructure at the park, Uberuaga said.
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