Glacier Park Inc. reports $12 million gross in '04

Contract with Park

expires this year; will likely be extended as Park hammers out details

By CHRIS PETERSON

Hungry Horse News

GLACIER NATIONAL PARK - Glacier National Park Inc., the Park's main concessionaire, reported gross receipts of about $12.3 million in 2004, which is up significantly from 2003, when the summer tourist season was dogged by wildfires in the Park.

In 2003, GPI reported gross receipts of $9.64 million. But portions of the Park, including the Lake McDonald Lodge and Village Inn were closed for days as fires burned near Lake McDonald.

GPI operates all the major lodges in the Park, as well as the hiker shuttle system and the red bus tours.

GPI has held the main concessionaire contract since 1981. But that contract expires at the end of this year. A recent Park "report card" gave GPI a satisfactory rating and indicated several facets of its service were much better than previous years.

"Overall, there have been huge improvements over past years in managements reponse to areas of concern," the report states, noting that complaints about service were down significantly.

Of the thousands of visitors who used GPI's services, the Park received about 38 complaints. Of those complaints, most were related to quality of service, the rooms, or the food.

Of its gross receipts, GPI pays the Park Service a franchise fee of 5 percent. In 2004, that was $615,256.

The Park will likely extend GPI's contract at least into next year, said Jan Knox, of the Park's concession office.

The Park needs to get other contracts settled first. Also expiring this year are the contracts for boat service, interpretative motor tours that don't include the red bus fleet, hiking tours, and horseback tours.

The boat service contract is held by Glacier Park Boat Company, the horseback tour is held by Mule Shoe Outfitters, the interpretative motor tours by Sun Tours and the hiking service is held by Glacier Wilderness Guides.

The Park also has several considerations to make when crafting a new main concessionaire contract. One aspect is whether to keep the entire contract as one or to break it up into separate lodging and transportation contracts.

In the past, GPI owned the red buses outright. But in 1999 severe structural flaws were found in the buses and they were shelved. The National Parks Foundation along with the Ford Motor Co. and the National Park Service crafted a deal where GPI gave 20 of the buses to the Foundation. Ford, in turn, completely refurbished the buses at a cost of about $237,500 apiece for a totaal deal of $7.837 million.

The Foundation the gave the buses to the National Park Service. Both Ford and GPI were then able to take a tax break on the buses.

GPI now operates and maintains the fleet under an amended contract.

Another aspect of creating a new contract is GPI's possessory interest in property and equipment at the Park's lodges. The Park owns the Village Inn outright, but GPI has an interest to some degree in the remaining properties.

According to its 2004 audited financial statement, GPI claimed it had net depreciable fixed assets in the Park of about $5.2 million. But contractually, that isn't the definition of GPI's possessory interest in the park properties.

That's a figure that still has to be determined by the Park before a new contract can be crafted, Knox noted.

The Park can do that in a couple of ways. For one, it could simply estimate GPI's possessory interest. Or secondly, it could negotiate an agreed upon possessory interest.

The possessory interest is an important aspect in the new contract, because if an outside compaany wants to come in and bid on the services, in would have to buy out GPI's possessory interest.

The Park Service is currently buying down GPI's possessory interest through renovations to the Many Glacier Hotel and other properties.

To date, the Park has spent about $8.85 million on the Hotel. Those renovations, are designed to match GPI's possessory interest with adjustments for inflation.

The park has plans for millions more in restoration and other improvements to the Hotel.