New York-based Delaware North Parks and Resorts has won a 10 year concession contract to operate overnight accommodations in Kings Canyon National Parks beginning this fall NPS announced March 6.
The hospitality company already provides service in next door park Sequoia National Park as well as Yosemite, Yellowstone and Grand Canyon.
Delaware North will take over from Kings Canyon Park Services who will continue to operate the lodging and food concession this sumer at Cedar Grove and Grant Grove.The company is based in Carmel and is known on as Asilomar Management.They own the Montecito Sequoia Lodge in Sequoia National Forest between Kings Canyon and Sequoia. The company secured the Kings Canyon contract in 2001.
Key to the new contract will be requirements that Delaware North will upgrade older facilities at Grant Grove and spend an estimated $5.4 million doing so.
Concession facilities in Kings Canyon include lodging, retail, and food services at Grant Grove and Cedar Grove. Grant Grove includes the 36-room John Muir Lodge, which was constructed in the late-1990s, plus 33 rustic cabins and 17 tent cabins. A gift shop, restaurant, and market are in the Grant Grove area.
According to the website National Park Traveler revenues for the park are as follows.
“Cedar Grove has a 21-room lodge that includes a small market plus a small food service operation. Lodging revenues for 2010 were $1.9 million at Grant Grove and $366,000 at Cedar Grove. Food and beverage revenues for the same year were $1.1 million and $180,000, respectively. The winning bidder will be required to pay the existing concessionaire $1.1 million for ownership interest that will convert to leasehold interest under the new contract.
The $1.1 million obligation is most likely for the existing concessionaire’s remaining ownership interest in John Muir Lodge, which opened in 1999. Buildings are typically depreciated over a 40-year period.
Merchandise, supplies, and equipment will entail an expenditure similar to that for possessory interest.
Overall, the National Park Service estimates an initial investment for the winning applicant will be approximately $3 million. The prospectus requires an annual payment of 2.6 percent of revenues be assigned to a repair and maintenance reserve and an annual franchise fee of 4 percent of revenues.
The major construction project (called the “concession facilities improvement program”) included in the prospectus is the demolition and replacement of the Grant Grove restaurant and check-in area.
Park Service officials are estimating this will cost approximately $5.4 million and be completed by October 2016. The new concessionaire will be required to develop a temporary food service operation until the new restaurant is functioning. The current gift shop will require remodeling, too, as it is currently connected to the building to be demolished.”
Delaware North made a similar investment in Sequoia when it built the $14 million Wuksachi Lodge after it gained contract there.
Meanwhile at Montecito Sequoia the Asilomar based owner has built four new upscale cabins that sleep five each completed in January.
