The National Park Service recently released a prospectus for concession operations at Mesa Verde National Park that for the last 32 years have been managed by ARAMARK.
The contract currently in place was initially issued for 20 years and has been subject to multiple extensions while the new prospectus was being prepared. Other NPS concession contracts, including those at Glacier, Yellowstone, and Yosemite, have also been subject to periodic extensions until a comprehensive prospectus could be developed. The new contract at Mesa Verde is scheduled for a term of 10 years that will begin January 1, 2015.
The prospectus includes concession operations for the campground, fuel sales, laundry, showers, a kennel, vending, retail, and food and beverage operations at Morefield Village. Retail and food and beverage services are also required at Far View Lodge, Far View Terrace, Spruce Tree Terrace, and Wetherill Mesa. The prospectus requires the concessionaire to operate interpretive bus tours and allows, but does not require, tram operations at Wetherill Mesa.
The major park concession involves operation of 17 buildings that comprise Far View Lodge. These buildings, constructed in the 1970s and early 1980s, house 150 relatively small guest rooms with interiors that are nicer than indicated by the exteriors. During one of our park visits several years ago there seemed to be some possibility of constructing a new lodging facility and utilizing the existing buildings for storage and employee housing. This plan has apparently been either put on long-term hold or deep-sixed. Or, perhaps, swept under a mesa.
The guest rooms offer excellent views of the distant mesas to the south. We have stayed in most of the country’s national park lodges and only a few including Many Glacier Hotel and Ross Lake Resort have guest rooms with views comparable to those offered at Far View Lodge.
Far View lodge currently offers two categories of guest rooms; standard and upgraded (called “Kiva Rooms“). Upgraded rooms rent for $171, a premium of about $35 per night compared to standard rooms. The winning concessionaire will be required to finish upgrading the remaining 68 standard rooms during the first three years of the contract, at which time NPS will permit all rooms to be rented at the premium price.
A second, smaller required investment is conversion of the service bays currently utilized for storage in the Morefield service station for use as kennels. These two improvements to be paid for by the winning bidder are expected to cost a little less than $1.5 million. An additional investment of $353,000 will be required to purchase personal property.
The biggest investment expense of the contract is an outlay of $6 million for possessory interest (ownership interest of the existing concessionaire) plus acquisition of out-of-park property (warehouse, offices, employee housing, etc.) necessary to operate the concession business. This amount would be substantially higher except for the NPS agreement to buy down $2 million worth of ownership value.
Overall, the initial investment required of a winning bidder is expected to be a little over $7 million, exclusive of the cost of the upgrades that don’t have to begin until the second year of the contract.
Concession revenues in Mesa Verde averaged slightly under $7 million annually during the last three years, with a slight downward trend resulting primarily by reduced revenues from retail sales and campground fees.
Visitation during the 2012 season was affected by fires in the Mancos area. Approximately two-thirds of overall revenues have been generated by lodging plus food and beverage sales. We should add that we have eaten dinner at Far View Lodge’s Metate Room on several occasions and each time the food was as good as we have had in any national park. This despite the fact that executive chefs seem to come and go.
The NPS proposal requires a repair and maintenance reserve of 3.4% of gross revenues in addition to a minimum franchise fee equal to 4 percent of gross revenues. Proposals from prospective concessionaires are due in the NPS Intermountain Region office by March 11. The site visit took place November 19.