The concessions contract for the North Rim of Grand Canyon National Park is out for bids/David and Kay Scott

A new contract that would take effect in 2024 is being sought for commercial operations on the North Rim of Grand Canyon National Park, including lodging, and it could result in a jump in overnight rates.

Under the current proposal, the winning bidder could set pricing for the bulk of the available lodging -- 187 cabin rooms -- at whatever the market would bear. Pricing ceilings would be set by the National Park Service on the remaining 10 motel rooms and 40 hostel rooms.

The contract overall concerns lodging, food and beverage, retail, interpretive bus tours, and a service station on the North Rim. It also requires operation of a new complimentary visitor shuttle between Grand Canyon Lodge and the general store located near the campground. Additional services, such as equipment rentals and guided walking tours, are authorized, but not required. 

A similar North Rim concession prospectus issued in early 2019 got waylaid by COVID.

North Rim Accommodations

The picturesque Gilbert Stanley Underwood-designed Grand Canyon Lodge was constructed in 1927-28 by Utah Parks Company, a subsidiary of the Union Pacific Railroad. The original two-story lodge burned in 1932 and was replaced six years later with the current one-story lodge that retains the original’s rustic design. Utah Parks Company also constructed lodges at Zion, Bryce Canyon and Cedar Breaks. The railroad gifted the resort facilities to the National Park Service in 1972.  Private concessionaires at Grand Canyon Lodge have included TW Services, Xanterra Parks and Resorts (formerly, Amfac), Forever Resorts and the current operator, Aramark Destinations.

While commercial operations on the North Rim are not on a scale of the more commercialized South Rim (much of the South Rim’s commercialization occurred prior to Grand Canyon becoming a national park in 1919), this is a major NPS contract with the National Park Service estimating 2024 revenues ranging from $17.8 million to $18.8 million.  Lodging is expected to provide approximately half these revenues, which are forecast to increase by $3 million in 2027.

While most NPS contracts are for a period of 10 years, the North Rim contract is for 15 years. The longer period is in part to compensate for considerable outlays required of the operator for the Concession Facilities Improvement Program.  During the first four years of the contract, the concessionaire is required to spend nearly $17 million of its own money on a variety of projects, the most expensive being a complete rehabilitation of the two existing motel buildings. Interestingly, the basement of one of the motel buildings is to be converted into a 10-room hostel, each room having four beds.  

Additional projects include reconfiguration of the lodge lobby, remodeling of the lodge kitchen, deli, and restroom, and major remodeling of four employee dorm buildings. The concessionaire will also be required to acquire passenger buses to be utilized for interpretive tours and the new shuttle service between the main lodge and the general store.

Lodging at the North Rim comprises a total of 237 guest rooms in a series of cabins and two motel buildings.  No guest rooms are in the historic main lodge building.  The North Rim’s guest rooms are typically filled to capacity from the lodge opening in mid-May to its closing in mid-October. According to the prospectus, NPS plans to replace the water and wastewater systems, which may permit a lengthening of the season by a few weeks at each end.  

Core vs. Non-Core

Since 2017 the National Park Service has designated its lodging facilities as either core or non-core. The first category establishes a price target for park lodging based on the cost of comparable lodging outside the park.  For example, a lodging concessionaire in Grand Teton National Park might request the park to approve lodging rates similar to those being charged in the neighboring town of Jackson. 

Locating comparable lodging costs is particularly difficult for isolated national park units such as the North Rim. Park lodging classified as non-core allows the concessionaire to charge what the market will bear.  In other words, non-core lodging takes account of demand and supply and prices guest rooms to generate maximum revenue to the concessionaire, and the park which nearly always takes a cut via a franchise fee. 

According to the North Rim prospectus, when the new contract takes effect all North Rim lodging other than motel and hostel units – in other words, all of the cabins that comprise the majority of guest accommodations - will be classified as non-core.  Park superintendents can apply rate caps for both core or non-core lodging, but are encouraged not to apply these caps to the latter unless it is felt the concessionaire is abusing the process.

The prospectus lists a sliding franchise fee to be paid by the concessionaire to the park. For gross receipts of up to $15 million, the rate is 7 percent. Receipts from $15 million up to $25 million will require a fee of 10 percent. The fee for annual revenues over $25 million is scheduled at 20 percent. Bidders can improve their chances of winning the contract by offering to pay a higher franchise fee. NPS projects 2027 revenues will range from $21 million to $22 million. It also estimates an initial investment of $5.5 million will be required for items such as inventory, personal property, and working capital.

Notification of an intent to submit a proposal must be received by NPS via email by 4 p.m. MST by December 12, 2022.   NPS intends to announce its selection around July 1, 2023 and award the draft contract around November 1, 2023.

David and Kay Scott are authors of “Complete Guide to the National Park Lodges” (Globe Pequot).  They live in Valdosta, Georgia.