Update on Concessioner Operations in National Parks
Reports on business levels and expectations largely on track with the April 2020 survey of NPHA members. All concessioners report lowered levels of operations, employment and profitability. The range in decline varies, including total shutdown for Denali mountaineering (zero permits issued for the year) and for major urban operations like Alcatraz and Statue of Liberty. Operations in other units are experiencing to significant declines of up to 90%. All concessioners reported added costs arising from compliance with health codes and staffing challenges. Concessioners are concerned about operations in areas with surging COVID-19 cases, including the potential of a renewed shutdown of park access. Visitation to national parks is similarly varied but overall, significantly down. Typical concessioner operations declines appear to be in the 50% range.
Most concessioners have submitted notifications to NPS that they have experienced “extraordinary, unanticipated changes” to business opportunities described in their contracts. Section 11(d) of most contracts provides for modification of contract terms if NPS agrees with this assessment. We are not aware of any notifications accepted, which will trigger a review and decision process. In some parks, the superintendents have indicated that concessioner notifications have been forwarded higher in the agency for guidance. The contract provision focuses on changes to the franchise fee specifically, and for some NPS officials this loss of revenue is of concern. Contract by contract action on 500 concessions contracts is obviously a major undertaking by concessioners and NPS.
Departmental/agency at the national level is encouraged by NPHA. We recognize factors to consider, incluuding Departmental belief that that the process for amending concessions contracts, like other contracts including oil and gas, should rely on prescribed channels for relief. However, there is a clear precedent. After the 2013 government shutdown, all concessioners were given a deferral of October 2014 franchise fees as an adjustment. NPHA also recognizes that contract extensions may be more attractive more palatable to NPS than reduced franchise fees. NPHA has made clear that franchise fees reductions are certain, mirroring declines in 2020 revenues and will likely continue to be diminished for 2021. NPHA has also pointed out the staffing burden and costs to the agency of in-depth, contract by contract reviews and determinations could be very large and will be delayed, further harming concessioners.
NPHA leadership has pursued the concept of developing a decision tool for addressing appropriate relief on a park or concessions-contract basis. This would parallel the precedent of agency support to superintendents on park closing and reopening decisions. The tool could provide guidance in determining whether significant adverse impact had occurred and then offer two options: a default involving a two year contract extension or an in-depth evaluation that might result in one or more actions including contract extension/franchise fee waiver or reduction/revised pricing/LSI buyout/ changes in allowed services.
Concessioners have been told informally that the department/agency’s preference is to wait until season/year end to know for certain what the level of impact had been to concessioners for the year and for the overall contract period. NPHA believes that a delayed response runs counter to national policy, which has been to act quickly to stem job losses and business shutdowns and ignores the clear pattern of delays and inaction associated with federal transition periods following Presidential elections.