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AAA  Aug. 19, 2014 6:10 PM ET
Lucrative Grand Canyon contract up for bid again
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FILE - This Monday, Sept. 27, 2010, file photo, shows hikers on the South Kaibab Trail in Grand Canyon National Park, Ariz. One of the most lucrative contracts in the National Park Service is going out to bid for a third time, after Grand Canyon found the previous bids unacceptable. The successful bidder will provide lodging, food, retail and transportation services as well as mule rides on the South Rim. Those services are expected to bring in nearly $1 billion in gross revenue over 15 years. (AP Photo/Carson Walker, File)
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(AP) — A lucrative contract to operate some of the most iconic lodging and food locations at the Grand Canyon has been opened up to bidding for vendors in a deal that will result in several changes for the millions of people who visit the landmark each year.

Proposals are due in October with the contract to be awarded in January, potentially bringing in nearly $1 billion in gross revenue over the next 15 years for the winning vendor.

The contract first went out for bid a year ago. But Grand Canyon Superintendent Dave Uberuaga said the park didn't receive any bids that were responsive to the conditions of the 15-year contract.

The new contract requires that the successful bidder set up mobile food trucks on the South Rim and expand patio dining at El Tovar, the historic lodge that sits on the South Rim, in response to the crunch during summer months because of limited dining options in the park.

It also calls on the winning bidder to demolish the six outdated Maswik South lodge units and replace them with 90 standard rooms and 30 rooms with kitchenettes by 2017, and upgrade the rooms at the rustic Bright Angel lodge.

Other requirements include eliminating on-site laundry services to conserve water and instituting a lottery system for the cabins and dorms at Phantom Ranch that sits at the bottom of the canyon and can be reached only by mule, foot or by rafting the Colorado River.

Under two previous bids for the contract, possible concessionaries balked at provisions asking them to pay more than $100 million upfront to the current contract holder, Xanterra Parks & Resorts, for the improvements it has made to the facilities over the years.

Grand Canyon cut that cost to $57 million by borrowing money within the National Park Service that it will repay with an increase in the franchise fee for the contract, set at a minimum 14 percent. Xanterra Parks & Resorts currently pays a 3.8 percent fee on gross revenue to the park for the contract.

Uberuaga said he's hopeful the changes will entice bids.

"It's Grand Canyon, and so a lot of concessionaries would like to have Grand Canyon in their portfolio," he said.

A spokeswoman for Xanterra — the country's largest park concessions management company — didn't immediately respond to a question Tuesday on whether it would bid on the contract.

The Park Service also is asking prospective bidders to submit creative ideas, separately from the contract, for what could become of an 11,000 square-foot warehouse that has been eyed for an art and river heritage museum.

Delaware North Parks & Resorts recently was awarded another 15-year contract that includes some services previously provided by Xanterra. That contract begins in January for food and retail services at Grand Canyon Village, Yavapai Lodge and Desert View, a public laundry facility, showers and operation of a campground. It is worth about $30 million a year.

Associated Press
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