Grand Canyon services likely to stay open with 1-year temporary contract
FLAGSTAFF, Ariz. — A temporary contract for services at the Grand Canyon’s popular South Rim will ensure that mule rides and the park’s most iconic hotels and restaurants remain open to millions of visitors, the park’s superintendent said.
A 15-year contract worth as much as $1 billion for services at the South Rim is up for bid for a third time after bids did not meet the park’s terms. That contract won’t be awarded before the one held by Xanterra Parks & Resorts expires Dec. 31.
Grand Canyon Superintendent Dave Uberuaga said park regulations allow a temporary contract to be awarded to a concessions company for up to a year to fill the gap.
“We don’t want the interruption of visitor services to occur, and this provides that tool,” he said.
The National Park Service has had trouble getting concessions companies to bid on the extended contract. The deadline in the latest bidding round has been extended four times. Proposals are due Nov. 19.
Uberuaga said prospective bidders have balked at paying more than $150 million upfront to Xanterra for improvements it made to the facilities over the years. The Grand Canyon reduced that figure to $57 million by borrowing money from within the Park Service that it will repay by postponing projects or cutting funding for things like cave monitoring, parking lot lighting, a children’s nature program, and preventative search and rescue, and with concessionaire fees.
Still, the Park Service hasn’t gotten the response it wants.
In the latest amendment to the contract proposal Friday, the Grand Canyon lowered franchise fees from 14 percent to 10 percent for the first five years and 12.5 percent for the remaining years, and allowed for increased lodging rates. Grand Canyon also said it would reallocate employee housing if requested by the winning bidder and Delaware North Companies Parks & Resorts, which was awarded a smaller contract with some services in the contract held by Xanterra.
“We think increasing the profitability for any potential bidders is the best strategy for encouraging competition,” Uberuaga said.
Xanterra has submitted a bid for the new contract, but the Park Service won’t say whether other companies are vying for the contract.