…The problem: Xanterra over the decades has invested up to $200 million in improvements to its hotel, gift shops and restaurants around the canyon’s South Rim, money it would be entitled to collect should the government yank its concession contracts. The chances of finding a competing concessions contractor willing to assume that debt to Xanterra are considered slim. So in August, the Park Service announced a new approach. It would solicit a major concessions contract—worth more than $1 billion in potential revenue over 15 years—for the third time since 2013, the first private bids that came in having been deemed inadequate….The funds borrowed from other parks’ accounts will be repaid before the expiration of the new contract, which will kick in as of February 2015, Oltrogge added….
Lucrative Grand Canyon Contract up for Bid Again
Source: Felicia Fonseca, Associated Press, August 19, 2014
A lucrative contract to operate some of the most iconic lodging and food locations at the Grand Canyon has been reopened for bidding in a process that will bring changes affecting the millions of people who visit the landmark each year. The contract first went out for bid a year ago. But Grand Canyon Superintendent Dave Uberuaga said the park didn’t receive any bids adhering to the conditions called for in the 15-year pact. The new contract requires that the winning bidder operate food trucks on the South Rim and expand patio dining at the historic El Tovar lodge to accommodate crowds during the busy summer months. It also calls on the winning bidder to demolish six outdated Maswik South lodge units and replace them with 90 standard rooms and 30 rooms with kitchenettes by 2017. In addition, rooms at the rustic Bright Angel lodge must be upgraded. Other requirements include eliminating on-site laundry services to conserve water, and instituting a lottery system for the cabins and dorms at Phantom Ranch that sits at the bottom of the canyon and can be reached only by mule, foot or rafting the Colorado River. Bids are due in October, with the contract to be awarded in January, potentially bringing in nearly $1 billion in gross revenue over the next 15 years for the winning vendor….Delaware North Companies Parks & Resorts recently was awarded another 15-year contract that includes some services previously provided by Xanterra. That contract begins in January for food and retail services at Grand Canyon Village, Yavapai Lodge and Desert View, a public laundry facility, showers and campground. It is worth about $30 million a year….