Shenandoah National Park Taking Offers For 10-Year Lodging, Retail Concessions Contracts

Shenandoah National Park officials are entering offers for a new concessions agreement that coers retail and lodging in the park. Photo of Big Meadows lodging by David and Kay Scott.

Might there be a new concessions company running the lodgings and retail outlets at Shenandoah National Park? Stay tuned, as the Park Service recently released a prospectus soliciting proposals for a 10-year concession contract for the park.

Concession facilities in the park are currently provided by ARAMARK Sports and Entertainment Services under a 20-year contract that commenced in 1985. The current contract has been on one-year renewals for the past eight years.

The new contract includes lodging, food service, and retail operations at each of the park’s three lodging facilities (Big Meadows Lodge, Skyland Resort, and Lewis Mountain Cabins), plus food service and retail operations at Elkwallow, Big Meadows Wayside, and Loft Mountain. Horseback riding at Skyland Resort and gas pumps at three park locations are also included.

The winning bidder (if other than ARAMARK) will be required to pay ARAMARK $10.3 million for possessory interest, $3.3 million for personal property, and $108,000 for inventory. The possessory interest does not include ARAMARK’s support facilities outside the park.

In addition, the Park Service is requiring an outlay of $675,000 for facility and personal property improvements, plus nearly $1 million for deferred maintenance.

The total outlay required of a new concessionaire is over $15 million. The contract stipulates a 1 percent annual franchise fee, plus an annual repair and maintenance reserve of 6.6 percent. The existing contract requires an annual 2 percent franchise fee plus a 3 percent capital improvement contribution.

According to the NPS, revenues generated during 2008, 2009, and 2010 by facilities included in the contract were $13.7 million, $12.8 million, and $13.7 million, respectively.

Recreation visits to Shenandoah peaked in the early 1990s and in 2010 were about 60 percent of visits 20 years earlier. Overnight stays in the park have trended upward since 2003, but remain substantially below overnight stays in the early 1980s.

Proposals for the contract are due April 16th, with the new agreement to become effective January 1, 2013.