Delaware North Building Its Visibility Around Yellowstone National Park Through Lodge Acqusitions

Yellowstone National Park is minutes away from lodging properties in West Yellowstone recently acquired by the Delaware North Companies. NPT file photo.

In a move that strengthens its presence in the National Park System, the Delaware North Companies has picked up two lodging properties in West Yellowstone, Montana, bringing to three the number of hotels it owns in the western gateway to Yellowstone National Park.

Delaware North, which manages 15 retail outlets in Yellowstone, long has been the lodging concessionaire at Yosemite National Park, and also operates Wuksachi Lodge in Sequoia National Park and retail outlets in Grand Canyon National Park.

With the acquisitions of the Yellowstone Park Hotel and Gray Wolf Inns & Suites, Delaware North, which bought the Holiday Inn West Yellowstone a year ago, now controls nearly 300 rooms in West Yellowstone. The acquisitions played into the company's strategy of cementing its footprint in areas where it already has operations, said Kevin Kelly, president of Delaware North Companies Parks & Resorts.

"Wherever we have a base of operations we like to look at opportunities in that footprint," Mr. Kelly said Friday from his Buffalo, New York, offices. "As you know, we've got the 15 retail stores in the park, so we already have a solid base of operations. We have Bozeman offices, we run a substantial warehouse operation to feed the stores in West Yellowstone, so we do have people living and working in West Yellowstone.

"And so with that strategy, we apply our other core competencies of our division," he added. "Retail being one, of course, including food and beverage. But then lodging is the other one. We started this strategy a number of years ago. We operate in Yosemite National Park, and we bought Tenaya Lodge just on the south entrance of Yosemite, and found it to be a real effective way to expand our footprint. That’s our strategy.”

The Yosemite example clearly portrays Delaware North's strategy. Inside the park it runs all the lodgings, from The Ahwahnee Hotel to the High Sierra Camps, the dining rooms, and a number of retail outlets. About a decade ago the corporation bought the Tenaya Lodge, a property in Fish Camp, California, just beyond Yosemite's south entrance. The property has been transformed into a decidedly upscale resort complete with spa and fitness center. Late in 2008 the company added the former Apple Tree Inn to its portfolio and handed over its cottages to the managers of Tenaya Lodge to operate. In addition, Delaware North is in the midst of a $10 million, 20,000-foot expansion of Tenaya Lodge’s spa and conference and meeting facilities.

While operating lodges inside parks can have issues when it comes to obtaining National Park Service approval for everything from nightly rates to building colors, operations beyond park boundaries come with their own challenges, said Mr. Kelly.

"Inside the park comes with its own benefits as well. Very high demand inside the park," he said. "So we have to work much harder at acquiring guests outside the park. And again, we’ve built up that acumen over the years, our marketing platform is very integrated into our approach at the unit level and centralized from a corporate standpoint, so we think we’re effective in that."

Not only do the West Yellowstone properties offer Delaware North a heightened presence in the arena of Yellowstone Park lodging, the community itself was attractive to the company for its own offerings.

"West Yellowstone to us is winter use. We don’t care if it’s snowmobiles, it’s a winter-use plan and West Yellowstone," said Mr. Kelly. "There’s just so much that you can do in that footprint there, outside the park, that we think that there’s great opportunity there. We think it's a great community, we really like it there.”

Yellowstone Park Hotel has 66 rooms and Gray Wolf has 103. Combined with the 123 rooms at the Holiday Inn West Yellowstone, Delaware North’s total room count in West Yellowstone stands at 292.

While Mr. Kelly wouldn't say whether there were any other national park-related acquisitions in the works, he wouldn't rule out further expansion of the company's footprint.

"Our model is wherever we’re operating we try to grow in that footprint. So that’s still our goal," he said.