April 27, 2018 - Fighting Franchise Fee Increases on Public Lands
What are Grand Canyon National Park Franchise Fees?
About 18,000 visitors per year enjoy a once-in-a-lifetime opportunity to explore the Grand Canyon through tours of the Colorado River. Sixteen small businesses are awarded contracts by the National Park Service (NPS) to operate guided multi-day interpretive whitewater river trips, and are required to pay the NPS a franchise fee out of gross receipts.
When assessing franchise fees, the NPS is required under the Concessions Management Improvement Act to consider the investment and services provided by the businesses to ensure the rates are fair. The act further specifies that the NPS should not prioritize potential revenue to the United States when setting the fees.
What is the problem?
This cost increase will hit the consumer’s wallet, meaning fewer visitors will be able to afford a Colorado River tour. In a time of tax relief and less government interference, the NPS’s action does not fall in line with what the American people voted for in 2016.
Unfortunately, the NPS has decided to raise its franchise fees. This fee increase fails to abide by the Concessions Management Improvement Act mandates. It disincentivizes small businesses to grow their business as they will be met with higher franchise and operating fees. Requiring concessionaires to pay more in franchise fees will become detrimental in their ability to profit.
Grand Canyon visitors are also affected by the franchise fee increase. The increase will mean that service providers will be required to make tough decisions such as cutting personnel, and raising prices, making the experience less accessible to Park visitors.
What am I doing about it?
I joined a bipartisan letter to Department of Interior Secretary Ryan Zinke urging him to re-evaluate this burdensome franchise fee increase. I am hopeful that Secretary Zinke will see through the NPS’s bureaucratic pursuit of taxpayer money, and respond favorably to our constituents’ request.
What are they saying?
"Sixteen river outfitting businesses are honored to provide professional guided backcountry whitewater rafting trips to over 18,000 people a year on the mighty Colorado River through the Grand Canyon National Park. Those Outfitters are small family owned and operated multi-generational companies, some with origins back as early as the late twenties and early thirties! For decades they have worked in partnership and under concessions contracts with the National Park Service to provide visitors with an experience of a lifetime while helping preserve and protect this special place. And for that privilege, Outfitters pay a reasonable fee to the Park Service as outlined by Congress called a “franchise fee.” It is a certain percentage of gross revenues. Unfortunately, the latest contract renewal prospectus issued from the Park Service is proposing massive unjustified and unexplained increases to our franchise fees! These much higher fees are extremely burdensome to these small businesses, and come on top of other large increases in the general costs to operate such trips such as the cost of labor, transportation, insurance, etc. Outfitters will have no choice but to pass those added costs on to the customer, raising prices substantially. We fear this could make river trips unaffordable to many, and could even cause some outfitters to close their doors! We’re hopeful the Park Service will get the message and reverse course like they were recently forced to do with their ill-fated proposed 150% increases in entrance fees.” – John Dillon, Grand Canyon Outfitters Association