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Yosemite National Park Concession Prospectus Includes Significant Lodging Changes

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Accommodations in Curry Village will change with the next concessions contract/David and Kay Scott

The recently issued prospectus for operation of the majority of Yosemite National Park’s concession facilities includes several significant changes related to the park’s lodging. Lodging, a major revenue generator for the winning bidder (and the National Park Service), is expected to generate from $52-$57 million in 2016, the year the new lease kicks in. This is approximately twice the amount the concessionaire is expected to generate in food and beverage sales during the same year. Retail sales generate approximately the same revenue as food and beverage. The new contract will be for 15 years with a beginning date of March 1, 2016.

The most significant lodging change is to occur at Curry Village, where the Park Service is planning to replace 52 canvas tents with cabins that include bathrooms. This will reduce the number of tent cabins at Curry to 351 and increase the number of cabins with bathrooms to 98. Curry also has 14 cabins without bathrooms and 18 motel-type rooms.

The prospectus also calls for removing 34 tent cabins (these are duplex units, meaning 17 structures would be removed) at Housekeeping Camp, leaving 232 of these units. In the High Sierra Camps, half the 22 tents at Merced Lake and four beds at Glen Aulin are to be removed.

The prospectus includes an especially stiff franchise fee of 8.6 percent of the concessionaire’s annual gross revenues. Assuming the new cabins at Curry Village are completed on schedule before the end of the contract’s seventh year, the franchise fee will increase by an additional six-tenths of 1 percent, resulting in a fee of over 9 percent. This compares with NPS fees of 4 percent at Mesa Verde and Sequoia/Kings Canyon national parks, 6 percent at Mount Rainier National Park, and 1 percent at Glacier Bay National Park.

In addition to a 9.2 percent franchise fee, the concessionaire is to pay an annual 2 percent repair-and-maintenance fee. Adding the California sales tax of 7.5 percent, a Mariposa County sales tax of .5 percent, a Mariposa County Transient Occupancy Tax of 10 percent, and a Mariposa County Tourism Business Improvement District Assessment of 1 percent, results in a guest at Yosemite Lodge paying $240 for a room (the price listed on the DNC site for an October stay), $27 of which represents NPS fees, plus another $45 in various sales taxes. Thus, a family staying in Yosemite Lodge will be paying over $70 a night in fees and taxes. An Ahwahnee stay would entail well over $100 per night in fees and taxes.

While the park’s main concession facilities are in Yosemite Valley, the prospectus also covers concession operations at Badger Pass, Crane Flat, Glacier Point, Tuolumne Meadows, Wawona, White Wolf, and the High Sierra Camps. According to the NPS prospectus, each location “…. presents unique opportunities and challenges….”

Comments

Wow!  The Park gets a 9 1/2 % cut.  The S&P 500 hasn't seen that kind of annual profit margin in at least 20 years - if ever.   Talk about "enormous profits". 


From the Labor Environment section(pg 37):

"Two current collective bargaining agreements cover the Existing Concessioner’s employees: one with UNITE HERE! Union Local 19 of San Jose, California, (408) 321-9019, covering all service workers, and the other with the General Teamsters Local #386 of Modesto, California, (209) 526-2755), covering commercial drivers, mechanics, warehouse, and maintenance employees."

Would these unions really want to have to negotiate with multiple entities operating various concessions in the park?

Also, in the business opportunity document there are a lot of detailed projections for gross revenue for the various departments starting on page 19.

http://concessions.nps.gov/docs/Prospectus/YOSE004-16/Prospectus%20Files...

Gross receipts for the last 3 years were between $129-132M.

http://concessions.nps.gov/docs/Prospectus/YOSE004-16/Prospectus%20Files...


the last figures I saw were the gross of roughly 125,000,000,

And gross revenues means absolutely nothing.  What was their net profit?  What was their investment?  You can't claim "enormous profits" without knowing those numbers. 

Our parks, just like the rest of the nations public infrastructure are a governmental responsibility, and we are not doing a very good job right now of taking care of it.

I think you are confusing two issues.  One is who can run the concessions better. In my mind (and apparently the NPS's) it is no doubt the private sector.  The other issues is funding to maintain the assets (natural and man made) of the Parks.  Indeed that is a federal responsiblity financially (though the work could be outsourced) and like you I would like to see more money going to the Parks.  But that money has to come from somewhere. I believe it should come by reducing other programs that the Feds shouldn't be involved with in the first place not just raising the deficit or inflicting higher taxes. We need to get our budget in order.


EC, the last figures I saw were the gross of roughly 125,000,000, that in the early 1990s when the  MCA contract was rebid. Delaware North got some freebees also, the legal (I believe the correct term was possessory interest) in certain structures was paid for by a convoluted loan arrangement by a third party to the tune of about roughly 100 million by the NPS. I do not off hand remember the details. The NPS is paying this off. You may want to look into it. I might add that the current President of concession operations in Yosemite is an acquaintance, a really fine person, just first rate.  This is not an issue of personalities, but rather who is best able to maintain the public commons, either directly or in the case of contracts, oversight and enforcement. Of course this is the raging economic political debate of our generation.

 

Regarding the service and financial advantages of the private sector contracts, it is highly debatable that the park and and its visitors are getting the service they deserve at reasonable cost.  Our parks, just like the rest of the nations public  infrastructure are a governmental responsibility, and we are not doing a very good job right now of taking care of it.  President Reagan's campaign slogan "the Government is the problem" is having its effect. President Clinton did not help things much in his second term with his "reinventing government" initiatives. Everyone benefits from the maintaining of our public facilities from parks, roads, airports, schools, etc.  including our private sector entities.  I understand where you are coming from, but I simply disagree with your position. The balance is out of control, it least in my own view. As pointed out by the excellent "Traveler" post, somethings things cannot be measured by money/profit margins alone. 


I know this would not help supply and demand. And it would possibly make someone think they chose the wrong half. But it would provide for a good study...LOL


Thinking outside the box...it would be interesting to split a Park lodge in half, each half run by a seperate entity like non profit vs private company. If anything else you would hope the direct compitition would make them both better. It could also be  two private companies.


Oh Rick, I have compassion.   Just not for those that self-destruct. 


Ron,

You ask me to contact Yosemite to answer my profit questions.  That just shows you don't know those answers yet you are eager to call their profits "enormous".  I believe you have made an assumption which is likely to have little validity. 

As to corporate vs non-profit you provide some interesting history but you admit that financial concerns were a major issue.  Those financials provided by Delaware North were part of their costs. The bottom line is they were able to provide equal or better services to the Park with more attractive financials for the Park.  Further these franchises are rebid creating a competitive market that keeps margins down.  Finally, you imply there was some "insider" activity between Babbit and Delaware North in the Yosemite award.  However, the vast majority of concession operations in the Parks across the country are outsourced.  Is every one of our Parks tainted by corruption?  Or is it because these corporations can provide a better product with more attractive financials to the parks and their guests.  I'm firmly in the camp of the latter. 


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