A major concessions contract is up for bid at Yellowstone National Park/David and Kay Scott

The National Park Service recently issued a prospectus seeking proposals for a 15-year contract providing retail plus food and beverage service in Yellowstone National Park. The prospectus covers seven Yellowstone locations and is distinct from the park’s nine lodges and lodge dining facilities currently managed by Xanterra Travel Collection, a major NPS concessionaire currently in the 10th year of a 20-year Yellowstone contract. 

Facilities under the new prospectus were operated by Hamilton Stores for nearly 90 years prior to the Bozeman, Montana-based firm being outbid in 2002 by current operator Delaware Parks and Resorts.

Revenue-generating park locations covered under the recently issued prospectus include Mammoth, Grant Village, Lake, Bridge Bay, Fishing Bridge, Canyon and Old Faithful. Non-revenue operations specified by the prospectus are at Tower (employee dorm) and the park’s west entrance (warehouse and employee RV park).

With nearly 5 million Yellowstone visitors in 2021, the prospectus represents a substantial business opportunity. The Park Service forecasts the contract will generate revenues of $40 million to $50 million in 2024, the  year the contract takes effect.  The majority of revenues are expected to be generated at Old Faithful (28 percent), Canyon (27 percent), and Mammoth (18 percent, including Tower and Roosevelt).

The major stumbling block for a bidder is substantial capital expenditures required of the concessionaire for the Concession Facilities Improvement Program. The Park Service is requiring bidders to agree to a three-year investment of nearly $32 million to cover new construction and renovation of existing facilities. The most expensive project, listed at more than $11 million, is a new employee dorm at Canyon. 

Conversion of the Mammoth Warehouse into employee housing will entail another outlay of $4.2 million, while rehabilitation of the Old Faithful employee dorm and of the Mammoth General Store will add an additional $3.1 million and $3.9 million, respectively. Interestingly, the prospectus specifies the concessionaire’s retail stores make available for sale “over-the-counter drugs for pain, indigestion, and other common ailments…” This is may well be related to visitors having to deal with a large amount of roadwork planned for the park during the next several years.

The Park Service anticipates an initial investment of $9.4 million will be required for personal property, inventory, start-up costs, and working capital.  The winning bidder is also expected to take care of deferred maintenance amounting to $3.6 million during the first three years of the contract.

On top of those investments, the Park Service is requiring a minimum franchise fee of 9.6 percent of gross revenues.

Parties interested in submitting a proposal are required to contact NPS by December 2, 2022.  The proposal submission deadline is January 19, 2023.       

David and Kay Scott are authors of “Complete Guide to the National Park Lodges” (Globe Pequot).  They live in Valdosta, GA.  Visit them at blog.valdosta.edu/dlscott