Yellowstone winter tour operators wary of new concessions contracts

2013-10-28T10:00:00Z 2013-10-29T00:34:02Z Yellowstone winter tour operators wary of new concessions contractsBy RUFFIN PREVOST yellowstonegate.com The Billings Gazette
October 28, 2013 10:00 am  • 

Yellowstone National Park managers passed a major milestone last week with the release of a final winter-use rule that appears to have gained widespread acceptance as a workable solution to 15 years of ongoing legal challenges over snowmobile travel in the park.

But it’s unlikely park planners will have much time to celebrate their success, as there is a large piece of the winter-use puzzle that remains unsolved.

Park officials are set to meet with commercial tour operators later this month in Jackson, Wyo., and West Yellowstone to discuss details of new concessions contracts that will take effect in December 2014, when the new plan is implemented. The concessions contracts are awarded separately from the winter-use rule, but must operate along the same timeline.

Some tour operators have already expressed concern following a conference call last week with Yellowstone Superintendent Dan Wenk and management assistant Wade Vagias.

Less competition

They fear that new concessions contracts will require small-business owners in gateway communities to invest thousands in new equipment under a deal structure that is likely to favor large corporations over mom-and-pop outfits.

Yellowstone managers have said that no final decisions have been made about how concessions contracts will be awarded, and that they will be looking for input from tour operators and others on what is likely to be a difficult and complex process.

“Depending on how this plays out, it could end up bad for visitors and bad for our small town of West Yellowstone,” said David McCray, owner of Two Top Snowmobile Rental.

McCray said he does not like a preliminary concessions contract provision outlined by Wenk that would require operators to offer both snow coach and snowmobile tours.

All permits and contracts authorizing snowmobile and snow coach operators in the park will expire in the spring, after the current winter season ends. Officials expect to send out a request for proposals sometime in the next few weeks for operators at each gate, who will compete for a share of the 110 daily “transportation events” that will allow a mix of snow coaches and sleds into the park under a “market-driven approach” favored by park planners.

McCray and other operators say the winter tour business landscape under the new concessions structure will likely result in substantial consolidation of permits, resulting in less competition coupled with fewer choices and higher prices for visitors.

Unwanted business

For smaller operators like McCray, who offers only snowmobile tours, buying just one snow coach would require a huge investment. And because concessions guidelines would favor applicants with experience operating both coaches and sleds, those who have offered only one or the other option will be at a disadvantage.

“We just do snowmobiles, and we’re the best,” McCray said. “Historically, we have put more snowmobiles in Yellowstone than any other company. I don’t want to go into the snow coach business. But I will if I have to.”

Clyde Seely, owner of See Yellowstone in West Yellowstone, said he worried that “requiring people to take on another business that they don’t want, aren’t qualified to run or aren’t capitalized for really complicates things.”

In West Yellowstone, that’s likely to result in a “weeding out” of some smaller operators, Seely said, “which creates a void for the larger corporations to come in and fill.”

The large corporation most often named as a likely new entrant in Yellowstone winter travel is Delaware North.

Delaware North Companies Parks & Resorts is one of the nation’s largest privately held companies, with annual revenues of more than $2 billion, according to information at the company’s website.

Delaware North has multiple lodging properties in West Yellowstone and operates retail outlets and dining locations throughout the park, but has no permit for winter tours. No one from the company responded to a phone message left at its West Yellowstone office seeking comment.

‘Company town’

Most winter visitors to West Yellowstone are looking for package deals that including food, lodging and transportation through the park, McCray said.

If any single large company had a foothold in all of those areas, he said, that would make it exceptionally tough for smaller operators to compete, and it could quickly turn West Yellowstone into what he called “a company town.”

Xanterra Parks & Resorts, the largest concessioner in Yellowstone, runs hotels and food outlets as well as snowmobile and snow coach tours and other summer activities.

But the company operates under a different concessions contract that covers all of those areas independently from the new concessions structure that will govern winter travel, said Rick Hoeninghausen, vice president for sales and marketing.

At Yellowstone’s East Gate, Gary Fales Outfitting is the lone commercial winter tour operator, offering only snowmobiles. Fales said the cost of upgrading his snowmobiles to comply with cleaner engine technology requirements will be a high financial hurdle. Offering snow coach tours would only add to that required investment.

Wenk told reporters on a conference call last week that tour operators, including anyone operating at the East Gate, would be expected to offer both snowmobile and snow coach tours. He said a final structure for winter concessions contracts was still being developed, leaving it unclear what would happen if no operator submitted a snow coach proposal to serve the East Gate.

McCray said park planners had promised that proposal guidelines would be available by August, but that operators won’t see them until Thanksgiving or later. That will mean a tight deadline for submitting a complex and lengthy business plan during a busy winter season, he said.

“Some large companies have people on staff whose only job is to write proposals. But the money those companies make doesn’t stay in the communities where they operate,” he said. “I have people who have worked for me for 25 years. This is a family business. So I have no choice but to submit the best proposal I can.”

Copyright 2014 The Billings Gazette. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Follow The Billings Gazette

Popular Stories

Deals & Offers

Featured Businesses