Concession Guidelines 2012

i
University of Waterloo, 2012

Guidelines for the Planning and Management of
Concessions, Leases, Licenses, and Permits in Parks and
Protected Areas

Paul F.J. Eagles and Maria K. Legault
Guidelines for Concessions, Leases, Licenses, and Permits
ii

Guidelines
for the
Planning and Management of
Concessions, Leases, Licenses, and Permits in
Parks and Protected Areas

University of Waterloo
Waterloo, Ontario Canada
2012

iii

The Authors
Paul F. J. Eagles is a Professor in the Department of
Recreation and Leisure Studies at the University of
Waterloo in Canada.

Maria Legault (B.E.S.) is currently a Graduate
Student in the Tourism Policy and Planning
Program at the University of Waterloo in Canada.

iv

Acknowledgements
An earlier version of this document was prepared by graduate students from the
Tourism Policy and Planning Masters Program, University of Waterloo. These include;
Cynthia M. Baycetich, Xiaoye Chen, Lina Dong, Elizabeth Halpenny, Pia B. Kwan,
Jasminka J. Lenuzzi, Xiye Wang, Honggen Xiao, and Yubing Zhang.

Jonathan Putnam and Steven Morris of the International Office of the National Park
Service of the USA organized workshops in 2008 and 2011 on visitor management in
World Heritage Sites. The attendees at those workshops contributed, through their
comments, important components of this document. Jock Whitworth, the
Superintendent of Zion National Park, provided information on the operation of the
shuttle service in that park. Sixto Narango and Danny Rueda of Galapagos National
Park provided information on tourism management. John Lohuis, lecturer at the
University of Waterloo, provided information on concession income. Guy Castley, of
Griffith University, provided information on South Africa national parks. Jim
Luscutoff, Division Chief of Concessions, Reservations and Fees, of California State
Parks provided information on the contracting procedure in California. Aaron Roth,
the Deputy Superintendent of Golden Gate National Recreation Area, provided valuable
information. Julio Zoroski provided information on Brazilian national parks. Jo
Pendry, Concession Program Manager and Debra Hecox, Planning and Development
Chief for Commercial Services, both of the National Park Service of the USA, provided
background information. Rita Casimiro (Mozambique) provided information on
transparency. Scott Elliott communicated with student Patrick Flannery on the issue of
Friends Groups in Parks. Jim Barborak, Colorado State University was helpful in
many aspects of this project.

Title page images include an aboriginal artisan selling products in a cultural center
of Taroko National Park, Taiwan (top); the Hamilton's Store located in a historic building
in Yellowstone National Park, USA (middle); and service buildings for the Maligne Lake
boat tour in Jasper National Park, Canada (bottom). All the photos in this book were
taken by Paul Eagles.

The authors of the current report had difficulty in obtaining the contracts between
third parties and service providers. Most park agencies refused to provide copies of the
the contracts, or to provide details of their contents. This revealed a major problem
with transparency and accountability in many jurisdictions in this issue.
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Abbreviations

Alaska Department of Fish and Game (ADFG)
Build-Operate-Transfer (BOT)
Commercial Business Unit (CBU)
Commercial Services Program (CSP)
Commercial Use Authorization (CUA)
Department of Conservation (DOC)
Environmental Management Program (EMP)
European Federation of Tourist Guide Associations (FEG)
Grand Canyon National Park Operating Plan (GCNPOP)
Great Barrier Reef Marine Park (GBRMP)
Hotel Catering and Institutional Management Association (HCIMA)
Ministry of Environment and Tourism (MET)
Modified Cost plus Incentive Fee Contract (CPIF)
National Park Service (NPS)
New South Wales Parks and Wildlife Service (NSW)
Niagara Parks Commission (NPC)
Organization for Economic Co-operation and Development (OECD)
Parks and Wildlife Service (PSW)
Portable Document Format (PDF)
Project for Public Spaces (PPS)
Protected Areas Conservation Fund (PACT)
Public-Private Partnership (PPP)
Rehabilitate-Operate-Transfer (ROT)
Request for Proposals (RFP)
Request for Qualifications (RFQ)
South African National Parks (SANParks)
States News Service (SNS)
United States Department of the Interior (USDI)
Yellowstone National Park (YNP)
Workplace Hazardous Materials Information System (WHMIS)

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Table of Contents

Prelude: Structure of this Guide ____________________________________________ 1
Chapter 1: Overview of Park Tourism Management _________________________ 3
1.0 Why outsource park operations? ______________________________________________________ 3
1.1 What are concession contracts, leases, licenses, and permits? __________________________ 9
1.2 What is the process for deciding upon a concession, lease, license, or permit? _________ 15
1.3 What is the process for selecting an external provider? ________________________________ 16
1.4 How should concessions be regulated? ______________________________________________ 20
1.5 How can concessionaires be monitored? _____________________________________________ 30
1.6 Can Friends Groups provide park services? __________________________________________ 31
1.7 Why might the park agency operate as a parastatal? _________________________________ 32
1.8 What conflicts might arise amongst service providers? ________________________________ 33
1.9 What happens if a contractor goes bankrupt? ________________________________________ 34
1.10 Summary: What are the pros and cons of using a concessionaire? ____________________ 34
Chapter 2: Two Perspectives of Concessionaire Expertise __________________ 37
2.0 What are the required qualifications from the park agencys perspective? ______________ 37
2.1 What are the required qualifications from the concessionaires perspective? ___________ 39
Chapter 3: The Retail Sector in Protected Areas ____________________________ 43
3.0 What are the benefits of selling retail items in protected areas? ________________________ 44
3.1 How can park managers monitor local retail concessions? ____________________________ 48
Chapter 4: The Accommodation Sector in Protected Areas ________________ 48
4.0 What are the different types of accommodations available in protected areas? ________ 50
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4.1 How can accommodations be managed by the park agency? ________________________ 52
4.2 How can accommodations be monitored by the park agency? _______________________ 56
Chapter 5: Transportation in Protected Areas ______________________________ 59
5.0 What goals should park managers set for a transportation concession? ________________ 60
5.1 What challenges surround transportation concessions in protected areas? _____________ 62
Chapter 6: Food Sales and Restaurants in Protected Areas _________________ 66
6.0 What types of food operations occur in protected areas? ______________________________ 67
6.1 How can food facilities be managed by the park agency? ____________________________ 68
6.2 How can park managers monitor food concessions impacts on human health? ________ 70
6.3 Summary: What is involved in private food provision in parks? _________________________ 71
Chapter 7: Tourism Guiding Permits in Protected Areas _____________________ 72
7.0 What are the different types of guides in protected areas? _____________________________ 73
7.1 How can park managers identify the need for a guide? _______________________________ 75
7.2 How can park managers select and manage applicants? _____________________________ 76
7.3 How can park managers monitor the activities of guides? _____________________________ 80
7.4 Summary: What are the benefits of interpretive services? ______________________________ 81
Chapter 8: Recommendations for Park Managers _________________________ 83
References ______________________________________________________________ 88
Glossary ________________________________________________________________ 94

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List of Figures

Figure 1. California State Parks contract Aramark Parks and Destinations to operate the
Asilomar Conference Center. .............................................................................................................. 5
Figure 2 . Bidding and selection procedure, Lin (2000, pp. 27). ............................................... 19
Figure 3. In Point Pelee National Park the transit is operated by the Friends of Point Pelee.
.................................................................................................................................................................... 32
Figure 4. Reception Center at Skukuza in Kruger National Park. SANParks functions as a
parastatal. ............................................................................................................................................... 33
Figure 5. Niagara Falls experience. The Niagara Parks Commission (Ontario, Canada)
provides many recreation programs and facilities with its own staff, without the use of
concessionaires or contractors. ................................................................................................... 36
Figure 6. Yurt in Algonquin Provincial Park (Canada) offers semi-permanent tents for a
four-season camping experience. Ontario Parks operates these directly, without the use
of a contractor. ...................................................................................................................................... 42
Figure 7. Concessionaire store in Mopane Camp in Kruger National Park (South Africa).
.................................................................................................................................................................... 43
Figure 8. Retail store operated by the Niagara Parks Commission (Canada). ................... 44
Figure 9. The Niagara Parks Commission informs the park visitor that retail sales benefit
the park. ................................................................................................................................................... 45
Figure 10. Ontario Parks is increasingly moving from concessionaire operation of retail to
park operations. ..................................................................................................................................... 47
Figure 11. Presquile Provincial Park (Ontario, Canada) encourages Friends Groups to
operate a gift shop within a park building. .................................................................................... 48
Figure 12. Campsites within campgrounds are a common accommodation facility in
many parks. ............................................................................................................................................. 49
Figure 13. Campsite suitable for recreation vehicles in Algonquin Provincial Park
(Canada) ................................................................................................................................................. 52
Figure 14. Killarney Lodge in Algonquin Provincial Park (Canada) operates on the basis of
a long-term lease. ................................................................................................................................. 53
Figure 15. Fort Baker, a former military installation, is within the Golden Gate National
Recreation Area (USA). It is now operated as a private resort named Cavallo Point
Lodge. ..................................................................................................................................................... 55
Figure 16. The Rondovel at the Skukuza Camp in Kruger National Park (South Africa) is
owned and operated by SANParks. SANParks also has concessionaires operating
accommodation units, while at least one is operated by a community group. ................ 56
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Figure 17. Boat transport for the eco-tourists who visit the Heron Island Resort in the Great
Barrier Reef Marine Park (Australia). ................................................................................................. 60
Figure 18. Highway 60 through Algonquin Provincial Park (Canada) provides valuable
access to the park for visitors. However, it is also heavily used for industrial and
commercial traffic. ................................................................................................................................ 63
Figure 19. Parks may provide specialized transport, such as this tramway to a mountain
top in Jasper National Park (Canada). ........................................................................................... 65
Figure 20. Sausage cooking at the Vaattunky Eco-Resort in the Arctic Hiking Area
(Finland). The preparation and eating of food is a part of the ritual of outdoor
recreation. ............................................................................................................................................... 66
Figure 21. Bush Brai at Mopani Camp in Kruger National Park (South Africa). Private
operators often provide distinctive dining opportunities. .......................................................... 70
Figure 22. Preparing and eating food is an important part of the ritual of park use. ........ 71
Figure 23. Parks often require licensing for commercial tour operators within a park. ...... 72
Figure 24. Park agencies often license private tour operators to ensure levels of
competency. .......................................................................................................................................... 74
Figure 25. Factors influencing a needs assessment. Source: USDA Forest Service,
Outfitting and Guide Administrative Guidebook, 2000. Available at:
www.Fs.fed.us/recreation/permits/outfitting/guide .................................................................... 75
Figure 26. Marine ecology guide at the Heron Island Resort in the Great Barrier Reef
Marine Park (Australia). ........................................................................................................................ 80
Figure 27. Many parks use their own staff to provide education and interpretive services,
as in Yellowstone National Park (USA). ............................................................................................ 82
Figure 28. Naturum, the visitor center in Fulufjallets National Park (Sweden) ....................... 83
Figure 29. Sabi Sabi Private Game Reserve is adjacent to Kruger National Park (South
Africa). Private ecolodges outside parks are providing competition to parks due to their
quality service and facility levels, typically much higher quality than that found in parks.
.................................................................................................................................................................... 85
Figure 30. Algonquin Provincial Park works with local municipalities to share the
contracting of the collection of garbage and recyclables from park campgrounds. .... 87

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List of Tables

Table 1. Highlights of park agency websites and related link. ................................................................. 8
Table 2. Concession contract duration in various park agencies worldwide. .................................... 13
Table 3. Tasks and schedule in choosing a concession (Havitz, 1999). ................................................ 16
Table 4. Environmentally responsible practices in concession contracts (Wyman et al., 2011). .... 28
Table 5. Environmental best practices for accommodation (United Nations Environment
Programme-Industry and Environment [UNEP-IE] and International Hotel and Restaurant
Association [IHA], 1996). ................................................................................................................................ 57
1

Prelude: Structure of this Guide

The purpose of this guide is to train park staff in the management of concessions,
leases, licenses, and permits in a park tourism context. Virtually every park agency has
at least one external organization operating within park boundaries; however, there is a
paucity of inter-practitioner communication and scholarly research in this subject area.
This document is designed to help fill this gap in the literature. Strategies
recommended throughout the document are aimed at creating mutually-beneficial
exchanges between park managers and external providers. Although there have been
tensions between both groups in the past, the future holds a fair amount of promise.
Positive examples of park-provider interactions exist in the United States, New Zealand,
Australia, South Africa, and Canada. Lessons learned from these interactions will be
related back to the theoretical findings of researchers.

Chapter one provides a holistic overview of external providers in a park setting.
This chapter explains why non-park groups are allowed to operate in parks, how they
should be chosen and regulated, and what activities they should be expected to perform.
Chapter Two investigates the issue of qualifications in the provision of goods and
services from the perspectives of both the park agency and external providers. Chapter
Three details the benefits of allowing local community members to participate in market
opportunities within the park through the sale of gifts and handicrafts. In Chapter Four,
the different types of accommodation in the parks are presented, along with methods
park agencies can use to manage and monitor their activities. Chapter Five, Six, and
Seven cover food sales, transportation, and guide/outfitter management, respectively.
The guide covers large-scale concession contracts and leases as well as the shorter-term
management issues of licenses and permits.

This handbook should be treated as an outgrowth and extension of the IUCN
Guidelines on Sustainable Tourism, in which the concept of managing concessions and
contracts is introduced in Section 9.8 (Eagles, McCool & Haynes, 2002). The current
document goes into greater depth on the subject. Many parks have a complicated
mixture of different types of operators in parks. The park staff may operate the park
gate, maintenance, and enforcement activities. A non-profit friends group may assist
with the education programs. A profit-making company may operate the park store.
Meanwhile, a local municipality may operate some of the infrastructure maintenance.
This manual is designed to help decision-makers sort through this complexity in order to
2

to provide the best combination of financial efficiency, community consensus,
transparency, and accountability that is possible in a public organization.

A set of guidelines for the management and operation of concessionaires within
public parks has been requested by many groups over time. In 1963, the American
Institute of Park Executives, Inc., stated that the park and recreation executive has long
needed a tool to guide him [sic] in the preparation and execution of concession contracts
contracts (Memmel, 1963, pp. 3). Again in 1997, the North American members of the
World Commission on Protected Areas requested a set of provisional guidelines for
concessionaires. It is hoped that this guide will stimulate conversation amongst the
scholarly, private, and non-profit communities and generate an active response to the
concerns raised herein.

3

Chapter 1: Overview of Park Tourism Management

Visitor services are those facilities and services provided to park visitors to assist
their use and enjoyment of a park. These services often include: lodging,
campgrounds, food services, merchandising, tours, recreation activities and facilities,
guiding, interpretation, transportation, as well as equipment sales and rental. Park
managers must decide who will provide these services and what legal instrument to use
for any outsourcing endeavor. The service may be provided by park agency staff, a
profit-making company, a non-profit company, or a community group. The park
agency is typically governmental (i.e. public), while the latter three organizations
operate within the private sphere. Legal instruments for outsourcing include
concessions, leases, licenses, and permits. Some park agencies develop a commercial
services plan to harmonize the use of external services and related legal instruments.
Many park agencies have no overall plan for the provision of tourism services to the
public. Often historical precedent is used, without a full consideration of all the
options. It is hoped that this manual will aid policy makers and managers in these
decisions.

This chapter one will provide the reader with background on concession operations,
explaining why non-park groups are allowed to operate in park settings, how they
should be chosen and regulated, and what activities they should be expected to perform.
It is important to note that the legal situation surrounding concessions, leases, licenses,
and permits varies between countries. These guidelines are necessarily general in
nature and must be utilized only with the legal advice provided to the parks and park
agencies in each jurisdiction.

1.0 Why outsource park operations?

Two strategies that managers can use to provide visitor services within the park
include outsourcing and insourcing. Outsourcing brings private sector (i.e.
concessionaires) operators into the park, with the assumption that they will operate
efficiently as well as provide high-quality, responsive visitor services. All outsourcing
comes from policy goals. Park policy goals are set by governing legislation and policy
documents. These goals can include: financial gain for the agency, local community
empowerment, high service quality to the public, as well as adherence to park law,
4

goals, and plans. The goals must be clearly understood before deciding what
management model to use and how to use it.

Sheail (2010, p. 201), when describing the financial situation in the national parks of
the USA, stated that: Without congressional appropriation, the Park Service had no
alternative but to continue soliciting private capital for the purposes of feeding,
sheltering and transporting visitors. This is a common situation in many park agencies,
where government will not provide sufficient operating and capital monies to
effectively operate tourism in the parks. In many cases, government agencies are
unable to function like businesses, lacking the ability to retain income, set fees, and
retain income at the end of the fiscal year. In these situations they must seek the
support of external organizations.

When management responsibility is transferred from the park agency to an external
provider, a public-private partnership (PPP) is created (Ziegler, 2011). PPPs require
that park managers create a complete contractual agreement which states the role(s) of
the external organization and how concession revenue will be reinvested into the park.
For example, in California State Parks (see Figure 1) there are 190 concession contracts,
with 42 of these earning more than US$500,000. This provides over US$12,000,000 in
income to the park agency each year (Luscutoff, n.d.). Park agencies, however, may
prioritize obtaining funding for capital improvements and maintenance through the
concessionaire over their control of park services. This can result in long-term leases
which are challenging for park managers to monitor and control.
There are two options for outsourcing. One option is for the park agency to work
with a profit-making company, typically with specialized expertise. Another option is
to work with a non-profit company, typically with special interest in the park and its
resources. Some park systems have developed Friends Groups, which are in-park
non-government organizations, to provide specialized services, such as education and
interpretation. Other parks use community groups, such as the parks and recreation
department of the local municipality, to provide some services.
5

Figure 1. California State Parks contract Aramark Parks and Destinations to operate the Asilomar
Conference Center.

Insourcing requires that the park agency accept the responsibility and cost of
directly managing visitor and tourism services. This can entail higher levels of liability
risk for the park agency, greater strain on scarce personnel resources, and more
requirements for internal expertise. However, it can also provide more income for
park management activities when the park agency is structured appropriately (Moos,
2002). Lohuis (pers. comm.) maintains that the net income for many typical tourism
services in a park is around 30% above cost. If the park uses an outside contractor, the
park earns about 10% and the contractor about 20%. Therefore, if the park insources
the service delivery, it keeps the entire 30%.

Outsourcing and insourcing are not mutually exclusive; the park agency can work
with a non-profit or for-profit organization separately or in combination.
Relationships within these arrangements can vary based on land ownership and
sources of management money, including societal taxes, user fees, and donations.
China is experimenting with using of profit-making corporations in parks, but with the
park agency taking an equity position in the corporation (Su, Wall & Eagles, 2007).
6

Different combinations of public and/or private providers, land ownership and
funding source have resulted in the following forms of management (Eagles et al., 2002;
Eagles, 2008; Eagles, 2009):

Park agency;
Parastatal (i.e. a corporation owned or wholly controlled by the
government);
Non-profit;
Ecolodge;
Public and for-profit combination;
Public and non-profit combination;
Aboriginal and government;
Local community; and,
Traditional community (i.e. as an owner and management institution).

In determining the desired management combination for delivering park services,
the park agency should review its operations, with consideration for the following
issues. The capacity and legal powers of the protected area agency must be
determined. Current park managers may lack the necessary skills, as well as the
economic and organizational resources, to manage and develop tourism facilities
effectively. All profit made by the concessionaire is income foregone by the park
agency, though concessions can be a revenue-generating tool for protected agencies.
An alternative option is to restructure the park agency along more business-like lines, as
in the case of a parastatal. The South African National Parks (SANParks) determined
to blend the public goals of environmental conservation and commercialization by
becoming a parastatal in 1926 though the National Parks Act (Fearnhead, 2007).

The private sector may be able to deliver specialized services and products because:
It has the ability adapt to changing markets needs and conditions;
It may have more flexibility in labor contracts;
It can innovate and respond quickly;
It can easily raise capital and other funds;
It may have more freedom in setting price levels; and,
It is not be constrained by government policy.

Managers must also consider the group to involve and suitability of the service for a
concession. The private sector will only become involved in providing the service if it
7

promises to be profitable; they will not operate during low visitation periods, nor will
they provide services at average or subsidized prices. In contrast, the protected area
agency may grant concessions to non-profit groups, such as NGOs or a local
community. In both cases it may be necessary for the protected area agency to support
the organization in building capacity, such as providing business training workshops.

Nonprofits can provide the park with many benefits (J. Lohuis, pers. comm.). The
public is more likely to perceive the park agency as behaving in a fiscally responsible
way when nonprofits are involved in service provision. Further, the positive status of
the non-profit can encourage more people to volunteer with the park, thereby
increasing the inflow of expertise and assistance available to park managers (J. Lohuis,
pers. comm.). In Canada, non-profits are also advantageous partners for park
management because non-governmental organizations are eligible to receive
government grants (e.g. Trillium grant) (J. Lohuis, pers. comm.). Park agencies must
carefully consider the contracting out of services to non-profits, however, as this
relationship does not always involve a service agreement (J. Lohuis, pers. comm.).
This can lead to a significant loss of control for the park agency.

All services by third parties will be governed by a contract. A contractual
agreement, which is limited to a certain time period (i.e. term), must be adhered to by
both parties involved. The proper legal authorities must also be involved in the
establishment of the contract. Memmel (1963) stated that the heart of a contract is the
scope of the activity to be provided by the concessionaire. Enforcement of this activity
is based on the existence of verifiable measures (e.g. number of visitors), as specified by
the park agency (Lin, 2000). Verifiable measures also reduce the likelihood that
external organizations will breach the contract in favor of their individual goals (Lin,
2000; Wyman et al., 2011). However, the government often lacks complete information
on the external companies, making it challenging for them to create complete contracts
(Lin, 2000). This is especially true in the case of long-term contractual agreements.

Managers can also use websites to attract, inform, and regulate external companies
operating within the park setting. External organizations must be made aware of local
legal issues (e.g. taxes, subsidies, land tenure, zoning regulations, etc.) as well as the
social, cultural, and political context of the protected area. Some park agencies have
excellent websites which communicate effectively on these topics, either through
separate web pages or complete Portable Document Format (PDF) documents. Table 1
8

illustrates how several prominent park agencies use their websites to create or maintain
relationships with external organizations. Website links are provided for each.

Table 1. Highlights of park agency websites and related link.
Park agency and website link Description of website highlights
(United States of America)
http://www.nps.gov/commercialse
rvices/regulations.htm
Allows concessionaires to review relevant local, regional, and
national regulations (Thompson, 2009).
Thompson (2009) states that they offer staff an 800-page
manual to guide interactions with concessions. Chapter 10 of
this manual can be found online (Management Policies,
2006).
Provides information regarding operational tools, such as
environmental management, public health, and risk
management.
Parks Canada (Canada)
http://www.pc.gc.ca/eng/index.as
px
Provides a good overview of general park services available.
Does not provide resources to potential concessionaires,
such as an online login.
Does not provide information regarding the contract selection
and award process (Thompson, 2009).
Does not list concessionaires or contracts currently under
review or use in the parks.
New South Wales Parks and
Wildlife Service (NSW) (Australia)
http://www.nationalparks.nsw.gov
.au/
Links to an external website, New South Wales Government
Environment and Heritage (2011a), which provides visitors
with information on running commercial activities in national
parks.
Allows potential tenders to register and receive email
notifications about opportunities.
Thompson (2009) states that they offer staff a 300-page
manual for dealing with the legislation, policy, procedures,
and processes associated with concessions.
Parks and Wildlife Service
(Tasmania)
http://www.parks.tas.gov.au/index
Provides information for the general public, but less content is
aimed specifically at potential or current concessionaire.
Lists approved operators within the parks (Thompson, 2009).
9

.aspx?base=1
Great Barrier Reef Marine Park
(GBRMP) (Australia)
http://www.gbrmpa.gov.au/
Provides information on how to obtain a permit.
For those individuals or groups with a permit, there is an
online guide called Onboard: The Tourism Operators
Handbook for the Great Barrier Reef (Great Barrier Reef
Marine Park Authority, n.d.).
Alaska Department of Fish and
Game (ADFG) (Alaska)
http://www.adfg.alaska.gov/index.
cfm?adfg=license.main
Provides a well-ordered and extensive website which
dispenses licenses and permits to individuals, groups, or
guides interested in hunting within the State of Alaska.
Offers an online manual for those individuals or groups
interested in dispensing permits and licenses to the general
public (i.e. a license vendor); this covers everything from sport
fishing to sport trapping.

1.1 What are concession contracts, leases, licenses, and permits?
This section will describe the definitions and key attributes of concession contracts,
concessions, leases, licenses, and permits. These tools are flexible, based on contract
specifications, and are used differently across and within international park agencies.
Also addressed here is the issue of the contract and how the contract length has
implications for park-concessionaire interactions.

A concession is a privilege given to a third party to operate a special activity or
program. A park concession can be defined as any public park facility of a food,
merchandising, or public accommodation type which is owned, operated, or
maintained by a public agency or leased out to a private individual or corporation.
The primary function of the concession is a public service with a by-product of some
profit to those parties responsible for its ownership, operation, or maintenance.
Concession contracts have historically been monopolistic in nature, where only one
private company provides the service or product (Lin, 2000). The Maid of the Mist, a
concession operated within the Niagara Parks Commission, provides a good example of
the monopolistic nature of contracts (J. Lohuis, pers. comm.). Exclusive contracts like
these were initially encouraged because it was the only way that concessions could
invest large amounts of capital funding into the park infrastructure (Quinn, 1996;
Malatesta & Smith, 2011). National parks in the USA, such as Yosemite National Park,
10

initially had a large number of contractors who consolidated over time, leaving behind
only a few very large corporations. More recently, the concessionaire is usually chosen
by competitive bidding to avoid this monopolistic situation.

A lease is a contractual agreement in which one party conveys an estate (i.e. land
and facilities) to another party for a specified, limited time period. Typically, there is
an exchange of something of value. The lessor retains ownership in the property while
the lessee obtains rights to use the property (Legal Dictionary, 2012c). Basic facilities
such as campgrounds are typically owned by the protected area and leased to the
private sector for a certain period of time. The facilities may also be constructed by the
external organization, donated to the park, and then leased back to the concessionaire.
Once the lease term is up, the park must decide whether the facility will be severed and
removed, vested in the crown, or renewed with the existing operator (Thompson, 2009).
In California State Parks, for example, all capital improvements revert to the State at the
end of the contract (Luscutoff, pers. comm.). Similarly, in South Africa national parks
all capital investments by private companies revert to the nation at the end of the 20
year contract period (Castley, pers. comm.; Fearnhead, 2003; Wyman et al., 2011). In
USA National Parks unique legislative commitments give the lessee Leasehold,
Surrender Interest, the old term was Possessory Interest, based on the amount of capital
investment made (Pendry, pers. comm.).

Licenses give permission to a legal competent authority to exercise a certain
privilege that, without such authorization, would constitute an illegal act (e.g. a trespass
or a tort). A certificate or document confers permission to engage in the otherwise
proscribed conduct (Legal Dictionary, 2012a). Licensing may be seen by the public as
a form of quality control and might require extra due diligence by the competent
authority, in contrast to a permit (J. Lohuis, pers. comm.). Possession of the land is not
granted through the license (Memmel, 1963). Licences give park authorities the ability
to screen applicants to ensure that they are suitable to fulfill a certain activity. Usually
the number of licenses is limited to the level of market demand for the park. Licences
are often long term; for example, a multiyear permission to operate guiding services in
a park. Unlicensed vendors are problematic for the parks; in New York, food vendors
without licenses go unregulated by park authorities, and money raised is not returned
to the park (Greco, 2011). Consequently, food quality and service quality is unknown
by the park agency (Greco, 2011).

11

Permits are a temporary form of permission. They acknowledge that the recipient
has approval to do a lawful activity within the park space (Memmel, 1963). For
example, a person might be given permission to provide a service for a day or a week.
Permits normally expire within a short length of time. Usually the number of permits
is large and limited by external factors (e.g. social and/or environmental carrying
capacity of the park). In most cases, permits are given to anyone who pays the fee.
Permits are often given to tour companies that provide a tour experience within a park.

A contract is an agreement between two parties in which both parties agree to do
something in return for a benefit to both parties. Contracts can be either written or
verbal, but for important activities it is much preferable for the contracts to be written.
Written contracts make the settlement of disputes more ordered. Contract law is
important to all business dealings. There are several elements to any contract:
1) An offer;
2) An agreement of both parties to the offer;
3) Promises to perform according to the contract;
4) Financial and value considerations;
5) Timing commitments;
6) Performance terms; and,
7) Actual performance (Legal Dictionary, 2012b).
The concession, lease, license, or permit contract will outline the rights and
responsibilities of each party. It is important that the responsibilities of each partner
are listed in sufficient detail. Having a clear idea of these responsibilities allows for the
regular measurement of contract performance. Penalties for non-compliance must be
clearly stated; SANParks uses performance bonds (Fearnhead, 2007). There must be a
procedure outlining the rules for cancellation of the contract due to non-compliance
with contract stipulations (Eagles et al., 2002). Issues covered in the contract include:
1) Trading hours;
2) Standards for customer service;
3) Environmental practices;
4) Pricing policy and fees;
5) Public access to facilities;
6) Insurance needs;
7) Infrastructure maintenance responsibilities;
8) Infrastructure capital improvements;
12

9) Signage;
10) Advertising;
11) Accreditation standards of staff and facilities;
12) Design of facilities;
13) Monitoring, incentives and enforcement;
14) Hiring practices; and,
15) Role of local communities.
Contract length affects park-concessionaire interactions; the duration of a contract
can be extended by legal manoeuvres such as the right of first refusal or right of
preference. Contract length may be determined by park policy or legislation.
Typically, contract lengths are 1 year, 5 years, 10 years, and 20 years. The right of first
refusal allows the incumbent concessionaire to match the best bid by a potential entrant
(Chouinard, 2005). Beginning in 1916, the National Park Service in the USA used
rights of first refusal to encourage the privatization of park services (Quinn, 1996; NPS,
2012a). Stephen T. Mather championed this movement by creating the regulated
monopoly in parks, which allowed large concessions to ignore park conservation and
visitor-service goals in favor of greater profit (Quinn, 1996; Malatesta & Smith, 2011).

The right of first refusal has since been replaced in the NPS by more competitive
auctions of concession contracts coming up for renewal (Chouinard, 2005). However,
concessionaires retain financial interest in capital improvements, so that any new
concessionaire must pay the previous operator for such improvements. The cost of
these improvements is not depreciated over time. This concept is referred to as
compensable interest. This peculiar Leasehold Surrender procedure reduces bidding
competition considerably in US National Parks.

Another method through which concessionaires are able to extend their stay in the
park is the right of preference. Concessionaires may have a right to automatic renewal
of the contract if certain contract obligations are met, but most frequently, there are no
special rights of renewal. SANParks does not allow this right (Fearnhead, 2007). In
the USA, contracts that have gross income less than US$500,000 allow the holder to
match the best bidder at the time of contract renewal, thus granting preference. In
Canada, this right of preference is used much more broadly. There are advantages of
this system in that it reduces the need for contract bidding procedures within the park
agency and external organization. It also keeps a functioning small business in place.
However, it also reduces competition.
13

Table 2 summarizes contract length in international concessions. This information
only relates to the average concession contract duration (i.e. individual contracts may
vary in length). There is also no way of knowing what each organization classifies as a
large, medium, or small organization. Consequently, this is a general guide only.
Table 2. Concession contract duration in various park agencies worldwide.
Park agency name Average duration of contract Additional notes regarding
contract
(United States)
Contracts normally 10 years, but
20 years possible if capital
improvements are needed (NPS,
2012d)
Concessions Management
Improvement Act (1998) states that
only a competitive selection process
be used to award a concession, as
well as reducing contract duration
(Thompson, 2009)
New South Wales Parks and
Wildlife Service (NSW)
(Australia)
Large-scale concessions are 45
years, while medium-scale
concessions are issued on a
5-year basis (Thompson, 2009)
Duration of the contract directly
reflects the amount of capital raised
by the concession and returned to the
park agency (Thompson, 2009)
Parks and Wildlife Service
(PWS) (Tasmania)
years in duration, while
small-scale concessions are only
5 years (Thompson, 2009)
Banks are pushing for a 50 year
duration to the contract, to allow for
proper financing (Thompson, 2009)
South African National Parks
(SANParks)
years (Fearnhead, 2007; African
Safari Lodge Foundation [ASLF],
2012)
Private operator gains exclusive
commercial use rights within park, but
facilities revert to SANParks upon
contract completion (Fearnhead,
2007)
South African parks differentiate
between concession contracts with
investment (total of 20 years) versus
those without investment (total of 10
years) (Wyman et al., 2011)
National Parks
Administration (Argentina)
All contracts are 10 years with
additional 5-year renewals
possible (Wyman et al., 2011)
For example, the Pilego Panuelo Isla
contract is a total of 15 years (Wyman
et al., 2011, pp. 922)
National Parks of Peru All contracts are limited to no more
than 20 years (Wyman et al.,
Contract is affected by the
relationship between the park service
14

2011) and the concession (Wyman et al.,
2011)

Both the NPS and the Department of Conservation (DOC) in New Zealand are
experts at managing complex concession contracts. The NPS has a Commercial
Services Program (CSP) which administers 520 concession contracts annually, and
provides a diverse array of park activities (NPS, n.d.; NPS, 2012a; Pendry, pers. comm.).
Activities carried out by the CSP are publically available online and overseen by a
Concessions Management Advisory Board (NPS, n.d.). This program oversees 25,000
concession staff members; in contrast, only 20,000 people work for the park service
(Pendry, pers. comm.). The DOC has, similarly, created a Commercial Business Unit
(CBU) which responds directly to the need for private sector help within the park
system. The presence of coherent park agency policy within the umbrella of these
organizations has made the management of concessions easier for both park agencies.

Protected area agencies can also offer the concessionaire an Incidental Business Permit
(IBP) for their operations. The IBP is a simple, written form of authorization that
allows for the operation of a concession business in a protected area. It specifies that
the concessionaire cannot operate commercial facilities within the protected area; all
commercial facilities must exist outside the park boundaries, and no money can be
collected from the sale of products within the park. The IBP lasts from 2 to 3 years,
must be renewed after expiry, and is not transferable. The fee for this permit is
determined by specific government departments and consists of a non-refundable
application fee, an administrative fee, a protected area fee and (potentially) a
monitoring fee.

When applying for the IBP, the concessionaire will be asked to submit several
documents to the park agency. The first of these is an application form provided by
the park agency, along with:
1. Proof of liability insurance;
2. A proof of workers compensation insurance (if required by law);
3. Business license number;
4. Proof of permit fees paid; and,
5. Proof of compliance with all applicable regulations.
If the concessionaire is hoping to operate directly within the park, they must apply
for a concession contract rather than the permit.
15

1.2 What is the process for deciding upon a concession, lease, license, or permit?
The park manager may become aware of the need for a concession contract, license,
or permit through a user survey, services requested by the public, proposal by a
potential concessionaire, a request by staff, or a need identified in a relevant
management or master plan (Larimer County Department of Natural Resources, 2010).
The source of the request for an external provider can influence which legal tool is used;
for example, park staff may want a flexible tool that is relatively easy to monitor, such
as a centralized permit system. A concessionaire seeking to build infrastructure may
wish to gain a long-term concession contract. Consequently, the source of funding for
the park-external provider relationship is another important influence on which tool is
chosen. In Brazil, concessions are used when a third party invests in the park.
Otherwise, permits and licenses are used. However, Brazil has no specific law
governing concessions in national parks (Zoroski, pers. comm.).

Similarly, the nature of the good or service provided will influence which legal tool
is used. Guiding activities within the park might require only permits to gain access to
sensitive natural areas within the park; food services, in contrast, may require the
development of infrastructure and thus need a concession contract. Tendering is a
mechanism which efficiently allocates scarce rights by providing permits to applicants
interested in facilitating park services (Thompson, 2009). The process of tendering is
useful to park managers attempting to identify the right legal tool to use.

Tendering begins with a Request for Proposals (RFP), which helps the park agency
determine the type and quality of service providers available. In the NPS, the RFP is
preceded by the Request for Qualifications (RFQ) to ensure that the external company
meets a minimum of required management and financial qualifications (Thompson,
2009). If a tender results in a lease, the degree of authorization provided to the private
company or individual may not be equivalent to that provided by a concession contract
(Thompson, 2009).

In South Africa, a tender for tourism lodge concessions in Bwabwata National Park
was released on October 8
th
, 2010 (Kyaramacan Association, 2010). South African
parks attempt to achieve both environmental conservation and economic development
through sensitive commercialization of park facilities (Fearnhead, 2007). The
Kyaramacan Association had gained a 20-year concession contract by the MET, and was
seeking proposals from private parties to help develop and implement the concession
16

(Kyaramacan Association, 2010). The tender process helped to attract interested
parties to participate in a large-scale concession operation. This provides an insight
into the complex relationships which exist between the operation of a concession
contract, lease, license, and permit.
1.3 What is the process for selecting an external provider?
Once the park has determined that a certain service or program should be offered,
the park manager must begin the process of finding a concessionaire by advertising for
bidders. The complete list of steps involved in this process includes: release of a public
notice, design of a prospectus, competitive bidding, and selection process based on the
qualifications of the bidder. Selection procedures for profit-making companies
typically involve competitive bidding; this requires a level playing field for all
participants and can be both time-consuming and expensive for both parties.

The contracting-out of a concession can take anywhere from 25 to 40 weeks; if there
are political or legal appeals, this timeline will be extended. Table 3 provides a
detailed overview of the process from the perspective of the park agency.

Table 3. Tasks and schedule in choosing a concession (Havitz, 1999).
Tasks for the park agency Time required for activity
Develop strategic plan and timetable
Draft the contract
Produce the specification
Prepare the Request for Proposals
Produce tendering instructions
Produce an information package for bidders
Advertise the request for bids
Prepare for and conduct bidders meeting and site
meeting
Receive proposals
Evaluate proposals
Research proponents financial status and seek
technical reference
Short-list the best proponents
Interview the short-listed proponents
Select the best proponent
4 weeks
4-10 weeks
8-20 weeks
1-2 weeks
1-2 weeks
2-4 weeks
1-2 weeks
2-4 weeks
3-6 weeks
3-5 weeks
2-4 weeks
1-2 weeks
2-3 weeks
1-2 weeks
1-2 weeks
1-2 weeks
17

Negotiate final details
Sign the contract
Implement the contract and monitor compliance
Length of contract

The first stage of this process is to design a public notice about the contract
opportunity. This should make the park site appear attractive to potential investors
(Fearnhead, 2007). An advertisement for the service or product should state: the name
and location in which contracts are available; the type of service to be provided;
information on how to obtain a bid information package; a general description of what
the information package will contain; and, the deadline for submission of proposals to
the department. Avenues for this notice may be through newspapers, professional
magazines, electronic media, or a press conference for highly-valued bids. In the NPS
(1998), the prospectus must be made publically available in at least one local or national
newspaper or trade publication, and/or Commerce Business Daily. Recently,
government agencies maintain websites that provide notices of contract opportunities
(see Table 1). The entire process of advertising for and selecting a concessionaire
should be open to the public to ensure fairness of bidding and subsequent monitoring
and support from local communities.

Next, park managers should use their service or product needs to create a
prospectus. This document should be detailed enough to allow bidders to create a
feasible, relevant bid application. Concessionaires often base their income projections
on the prospectus, and disputes can erupt between park and external organization
when this document is not sufficiently detailed. The content of a prospectus will
describe the physical location and size of the operation, as well as plans for constructing
the infrastructure in a way that conserves natural and environmental features of the
landscape. The prospectus will also cover:
1. Layout and services desired for facilities;
2. Anticipated future markets of the park;
3. Current and future facilities provided by the park agency;
4. Contract policy, agreement, terms, and conditions;
5. Requirements of initial and long-term expected investment;
6. Requirements of the bid plan, including format, items, deadline, and references;
and,
7. The selection procedures.
18

In the NPS, sustainable environmental practices are one of the central aspects of the
planning and prospectus development process (NPS, n.d.). Every concessionaire is
required to document their Environmental Management Programs (EMPs), which are
audited by third parties (NPS, n.d.). For example, operational or maintenance plans
may be required to meet solid waste and recycling requirements, based on industry
standards maintained by the CPS (NPS, n.d.). The competitive contracting process of
the NPS has resulted in many innovative environmental management practices that go
beyond basic sustainability requirements (NPS, n.d.). SANParks, similarly, requires
that concessions create EMPs for construction and operational phases; these plans may
change over time in response to new policies and approaches (Fearnhead, 2007).

In response to the prospectus, bidders will provide documents (i.e. bids) describing
their expected methods for meeting each of the park agency requirements. The
process of bidding is usually competitive; each bid is assessed according to a system of
points for each requirement, based on a matrix of requirements given by the park
agency. The bid will describe the external companys:
1. Marketing strength and target markets;
2. Pricing records and policy;
3. Financial strength for the investment, loan, and operation;
4. Financial arrangement and budget for the plan;
5. Qualification of the bidder;
6. Contract length;
7. Expected requirements of the operation;
8. Timing of the operation;
9. Management performance and strength; and,
10. Partner share of responsibility for park promotion.

19

Figure 2 . Bidding and selection procedure, Lin (2000, pp. 27).
The potential concessionaire will begin the process of bidding by studying the
public notice and prospectus, after which they will typically tour the protected areas
facilities. Next they will submit their proposal and attend an interview. Lastly, the
concessionaire must study the contract to have a clear understanding of all regulatory
and contractual provisions. SANParks ensures that all bidders have relevant and
timely information throughout the process illustrated in Figure 2 (Fearnhead, 2007).
Concessioners may or may not negotiate the contract terms before signing it.

Selection factors which are most influential in determining which external
organization is chosen can be either primary or secondary. Primary selection criteria are
usually related to how closely the bid responds to park agency environment- and
visitor-related objectives, past experience of the bidder in providing these types of
services, the financial situation of the bidder, and the proposed minimum franchise fee.
In the NPS, the principle selection factors include (NPS, 2012b):
20

1. Responsiveness of the proposal to the objectives described in the prospectus of:
a. Protecting and conserving the resources of the park area;
b. Providing necessary and appropriate visitor services at reasonable rates;
2. Experience and related background of the offeror, including past performance
and expertise in the same type of visitor services;
3. The financial capability of the offeror to carry out its proposal; and,
4. The franchise fee and other forms of financial consideration.
The secondary selection factors for the NPS include the quality of the offerors
proposal to conduct its operations in a manner that furthers the protection and
conservation of the park area and other resources through environmental management
programs (e.g. energy conservation, waste reduction) (NPS, 2012b). Park-specific
factors are also taken into account in the secondary factors (NPS, 2012b).

For the choice of best bid, fair and objectives procedures are required. Typically,
the agency uses a matrix of requirements, with each bidder given points according to
how well the bid fits the agencys requirements. SANParks ranks applicants
development, environmental, and business plans on a pass-fail basis; they need to rank
over 8 points out of 20 points total to be selected (Fearnhead, 2007). The bid that gains
the most points is offered the concession agreement. Public announcement of the
winning bidder is common. Thereafter, the park manager works with the
concessionaire to establish rates for tourism services and products, level of service
provision that they will hold within the park, and a range of other important issues.
There is often considerable negotiation needed after the contract is given.

1.4 How should concessions be regulated?
Concession contracts aid management by addressing financial, legal, and
environmental norms critical to the success of the park-concession relationship. With
regards to financial issues, the contract should outline the concessionaires required
capital investment, concession fees, and visitor fees.
One major aspect of a concessionaires use of government buildings is the ongoing
cost of maintenance and capital improvements. Who pays for these expensive
activities (the government or the concessionaire) is a major policy issue. Contracts will
specify whether or not the concessionaire will be compensated for any infrastructure
21

they construct during their term in the park (Wyman et al., 2011). Government may
have to pay for the initial value of the updating to the structure, less depreciation and
inflation considerations (Wyman et al., 2011). New concessionaires may also be
burdened with the cost of paying the previous concessionaire for the cost of updating
the facilities (Wyman, et al. 2011). Possessory interest is a value obtained through the
upgrading of the capital component of infrastructure. In most jurisdictions, the
interest is depreciated over time, often in the same fashion as allowed in tax law. Early
in the development of Yellowstone National Park (YNP), the concessionaire known as
General Host provided grossly unsatisfactory performance; contract provisions
allowed the NPS to remove them, but had to pay for their possessory interests and
properties (Quinn, 1996). A large possessory interest from capital improvements will
reduce the likelihood that new contractors will be able to bid successfully against
current ones. More recently the National Park service has use the term, Leasehold
Surrender Interest, rather than the older term Possessory Interest. Therefore,
infrastructure can be a complicated and costly issue within park management
contracting policy.
External companies operating within the parks usually pay a concession fee to the
park agency. These fees, in long-term contracts, are generally reviewed by the park
agency every 5 years to determine if adjustments are required. There are four methods
for determining the level of this fee: 1) market value, 2) similar opportunities, 3) value
of services, or 4) percentage of concessionaire income. Depending on the legislation
and extenuating circumstances, concession fees may be set at market value. The
market value is considered to be the price a willing buyer will pay a willing seller for a
concession opportunity. As the market is self-regulating, supply and demand for the
good drives the price which buyers are willing to pay for each service or product. For
example, Ecuadors Galapagos National Park charges a concession fee to each boat (i.e.
an operating licence), which vary from US$4,000 to US$20,000 a year (Naranjo and
Rueda, pers. comm.). This method tends to be the least frequent method of setting
concession fees. More often, the fees are determined by evaluating similar concession
situations and using their fee, or valuation of the specific service or good provided.
These two options are determined in direct negotiation with the concessionaire.

The final method for determining the concession fee is through charging a
percentage of concessionaire income. This method is usually rife with abuse; the
operator can find ways to avoid counting admissions (e.g. by turning off systems), and
the manager should ensure that there are incentives and controls in place to avoid this
22

kind of activity (J. Lohuis, pers. comm.). Normally, this value is calculated through
formulae such as percentage of gross income or a per capita fee. In the DOC, New
Zealand, the following calculations are used to determine the concession fee (excludes
Government Sales Tax [GST]) (IUCN, 2000, pp. 50):
1. Guided tours = 7.5% of gross income (often set at $x + GST per person per half
day, and $y + GST per person per full day);
2. Helicopter landing rights = 5% gross income; and,
3. Hotels, ski areas etc. (lease of bare land only) = 3 to 5% gross income.
In Belize, the Protected Areas Conservation Fund (PACT) collects revenues and
taxes earned from tourist activities and visitor use fees (Wyman et al., 2011). The
PACT receives 20% of the revenues earned by the non-governmental organizations
co-managing the park, and 70% of the fees are used for managing the protected area
(Wyman et al., 2011, pp. 924). South Africa uses an annual fee that is based on the
percentage of gross revenue bid by the concessionaire during the bidding process
(Wyman et al., 2011). In addition to the concession fee, the park agency may charge
performance bonds; these bonds cover costs incurred by the government when the
concessionaire fails to perform as expected (Wyman et al., 2011). In Columbia,
performance bonds are valued at US$475,000; Chile values them at 10% of the annual
pay value of the concession (Wyman et al., 2011).

Many of staff involved in the collection of concessionaire income note that it is
challenging to accurately obtain a percentage of the external operators income. There
is a tendency for the concessionaire to under-report income. One author, Eagles, when
working with the Director of a park agency in Africa, found that the agency was
suspicious that a concessionaire had two sets of books, one for their own purposes and
one for the agency to see. In this case, the Director set up an independent data
collection system to determine the visitor flow through the facility, in order to calibrate
the concessionaires statements on visitor numbers. This illustrates how the park
agency often loses control by outsourcing, and must invest money and staff into
monitoring programs.

The timing of the concession fee payment affects how the external company chooses
to operate. The fee may be paid as an annual set fee or a flat fee in conjunction with a
royalty. Structuring the fee based on time periods might provide the concessionaire
with incentives to operate at specific time (e.g. lower fees during low volume periods).
There are also some occasions in which the park agency subsidizes the concessionaires
23

product provision; for example, during periods of low visitor volume. If the fee is
gradually increased over time, the external company may be able to increase its visitor
fees incrementally. This avoids public backlash against the concessionaire and park
agency caused by sudden price increases.

The amount charged to visitors is one of the most difficult and controversial aspects
of park-concessionaire relationships. Visitor use fees charged by concessions can
contribute to visitors satisfaction levels with their park experience, which can have
implications for the long-term financial viability of the park system. Visitor fees are
also identified as a social equity issue; unreasonably high fees can prevent minority
groups from visiting the park. Park agencies, since they are operated by the
government, are often expected to provide low or subsidized rates for park services.
In contrast, private companies entering the park are seeking to make a profit. In 1982,
recreation researchers were already commenting on the profit-orientation of many
concessioners entering parks in the United States (Quinn, 1996). Avoiding concession
monopolies, designing complete contracts, and regulating concession pricing are three
methods the park agency can use to avoid exorbitant visitor prices. The NPS, for
example, is unique in that all services and products provided by concessionaires have
regulated prices (Thompson, 2009). The cost of establishing these prices must be very
high, as there are over 500 concession contracts and tens of thousands of products sold.
The determination of the amount that can be charged is done by NPS staff members:

The reasonableness of a concessioners rates and charges to the public
will, unless otherwise provided in the contract, be judged primarily on
the basis of comparison with current rates and charges for facilities and
services of comparable character under similar conditions. Due
consideration will be given to length of season, provision for peak
loads, average percentage of occupancy, accessibility, availability and
costs of labour and materials, type of patronage, and other factors
deemed significant by the NPS Director (NPS, 2012a, p. 146).

Another example of the difficulty in implementing and regulating visitor fees is
illustrated in Roger Williams Park, located on Rhode Island in the United States.
Although this urban park offered extensive facilities (e.g. a zoo, greenhouse), the
family-operated concessionaires generated only $3,000 per year in income from over 2
million yearly visitors (Project for Public Spaces [PPS], 1997). After the park sought
new concessions, an entrance fee was designed (PPS, 1997). Park managers were
24

careful to ensure visitors knew that 50% of gross revenue from concession operations
was going back into restoring the parks dilapidated roads and historic buildings (PPS,
1997). This made the fee more acceptable to visitors, while improving the overall
landscape of the park.

Contracts are also important in identifying legal issues within the park-concession
relationship. These legal issues describe the expectations of the concessionaire as well
as the enforcement and monitoring procedures of the park if the concessionaire does
not fulfil their duties. Park agency rules will be stated in the contract and define:

1. The expected training level of staff members (e.g. with regards to environmental
preservation, visitor services, etc.);
2. The required hours of operation and range/level of services;
3. Pricing policy and degree of competition between concessionaires; and,
4. Arrangements for monitoring of concessionaire activities by the park agency.

It is not unusual for concessions operating within the park to disregard laws set to
govern operations within the park. This can result in illegally constructed facilities,
untrained staff, and negative public and visitor perceptions of the park as a whole.
Consequently, it is important that the contract set clear and legally-justifiable
enforcement methods. This also requires that the park invest personnel and financial
resources into regular monitoring of the external organization operations. Incentives
may also be offered to encourage proper behaviour by the concessionaire.

Monitoring is important, but expensive. The authors note that in discussions with
many park managers in the preparation of this handbook the issue of monitoring was
highlighted as being problematic. Many park agencies do little to no monitoring.
They rely almost completely on concessionaire-generated figures, and only react when
complaints are received. Given the lack of transparency with most contracts, it is very
difficult for the public to serve as an effective monitoring force. Provision of
technology is important and may have a direct impact on contract terms, how easily the
park can audit the concessionaires daily activities, and the overall success of the
licensee-concession operator in the park environment (J. Lohuis, pers. comm.).

Enforcement procedures are only as effective as their implementation.
Enforcement is a response to the external organizations failure to adhere to the
contract, and penalties for these failures should be formally documented in agency
25

policy. Penalties are graduated based on the degree of offence (Wyman et al., 2011).
They begin with a written warning, move into financial penalties (e.g. fines), and end
with cancellation of the contract (Wyman et al., 2011). In Perus Tombopata Protected
Area, concessionaires who have breached or failed to fulfil the contract are charged the
equivalent of 20% of the value of unpaid obligation, and may suffer a 2-year suspension
(Wyman et al., 2011). Argentina has a series of graduated fines for concessions,
depending on the severity of the problem (Wyman et al., 2011). Termination of the
concession agreement before the end of its term can occur in response to gross violation
of the concession agreement or financial insolvency of the contract.

The process for suspending, restricting, or revoking the allowed business activity of
the third-party involves three distinct steps in the NPS. First, the park manager
notifies the company in writing and gives them an opportunity to avoid future
violations and/or address concerns with specific employees (USDI, 2009). Next, the
external company is given the opportunity to explain the reason and circumstances of
the violation (USDI, 2009). Lastly, the external company is given the opportunity to
appeal the charges; the appeal must be submitted in writing within 30 days of receipt of
the decision (USDI, 2009). The NPS Regional Director may informally meet with the
appellant to reach a decision (USDI, 2009).

Political influence can sometimes limit the effectiveness of enforcement procedures;
consequently, park agencies should have some form of regular monitoring in place.
One of the authors, Eagles, met with 5 state park directors at a combined US and
Canada federal/state/provincial park directors meeting many years ago. These
directors stated that concession management was their single largest management
problem. They commented that when contractors deviated from their contractual
responsibilities, many went political to elected officials when called to account by the
park managers. They complained that the park officials were unnecessarily hounding
the business people and getting in the way of efficient business practices. This was an
attempt to get elected officials to overrule the park managers and to avoid impending
sanctions. Interestingly, these park directors were themselves political appointments,
since senior park management positions in the USA are appointments by the elected
governors of the state. These statements illustrate the complexity and time consuming
effort involved in enforcing concession contracts. Monitoring is essential as a basis for
enforcement measures.

26

Monitoring of the concessions operations can be done either by the park agency
staff or independent, paid evaluators/auditors. Lohuis (pers. comm.) states that food
service audits, financial audits, and legislative compliance audits should be performed
annually at a minimum; legislative compliance checks should include police checks for
criminal charges, documented evidence of training, and comprehension of training in
concession staff. Ziegler (2011) suggested that concession contracts should be
independently reviewed to ensure that proceedings are transparent and politically
accountable. Transparency occurs when a contract action, or other form of
government action, is visible to the public and in compliance with law and regulation
(Fearnhead, 2003; Ziegler, 2011). Political accountability, then, is the degree to which
the action is monitored or controlled through the political process (Ziegler, 2011).
Having a period of public commentary on a concession contract, before implementing
it, might be a more desirable option than regulation (Ziegler, 2011). A careful,
well-crafted contract can overcome many of the difficulties in regulation and can reduce
monitoring requirements over time (Ziegler, 2011). When monitoring is required, it
should focus on the areas, facilities, or services where:

1. Visitors have indicated concerns;
2. New management actions are occurring;
3. Effects of management are unknown; and,
4. Where information is lacking.

In Mozambique, there is no legal rule which clearly states how administrative law
contracts are to be disclosed to the public (Rita Casimiro, pers. comm.). Although
release of this information in an official gazette or under justified request could provide
the public with the necessary information, the current state of affairs is secrecy (Rita
Casimiro, pers. comm.). Consequently, there is no sharing of information with third
parties, a potential for corruption, and the volume of public input and monitoring is
limited (Fearnhead, 2007). Limited transparency in these contracts also means that
there is little to no understanding of their social and economic impact (SNS, 2011). In
the NPS, however, financial and employment information is regularly collected from
concessionaires and shared with the public online (Thompson, 2009). This ensures that
the concessionaires activities are understood and monitored by all parties.

Monitoring of concessions can be done by local communities. Local people share
an interest in the park resources because of their proximity (Fearnhead, 2007).
Encouraging them to monitor concession activities could allow them to feel involved in,
27

and thus more supportive of, park management. In Namibia, concessions are used as
an economic development tool to benefit conservation and empower communities
living in or around the parks (Thompson, 2009); in South Africa more generally, 20% of
concessions are awarded based on their promises to empower local communities
(Fearnhead, 2007, pp. 307). South African concessions are also tendered to
disadvantaged communities where the greatest financial needs are felt (Fearnhead,
2007). Similarly, Chile grants concessions directly to communities and implements
community-run tourist activities in the locations surrounding protected areas (Wyman
et al., 2011). Chinas Sichuan Province has contracts which assure community
participation by requiring concessions to hire at least 20% of their staff from local
communities (Wyman et al., 2011, pp. 920). Involving local people from the beginning
of the concession development can thus prove more important than post-hoc
monitoring.

Lastly, contracts outline expected environmental conservation methods of the
concession operation. Concessionaires must comply with the park agencys
environmental laws in all aspects of their operations. This includes facility planning,
construction, implementation, and daily activities. During the planning stage,
environmental issues must be considered within the zoning application, development
permit, building approval, and business operating license. Park agencies are
responsible for carefully regulating the decisions made during the planning stage.
Without appropriate planning or best practices in place, tourism concessions can create
problems such as waste, habitat destruction and the displacement of local people and
wildlife (Wyman et al., 2011). In Perus Tombopata Protected Area, concessionaires in
violation of environmental laws must pay full restitution to the state and to third parties
(e.g. local communities) affected by the damages (Wyman et al., 2011). In Argentina,
negative environmental impacts result in contract modifications, expensive mitigation,
or termination of the concession contract (Wyman et al., 2011).
When constructing the site, the park agency must ensure that the external
organization is preserving the environment by adhering to the following guidelines:
1. Excavation activity must be minimized to reduce soil erosion;
2. If possible, energy should be derived from renewable energy;
3. Locally sourced or recycled building materials should be used whenever
possible; and,
4. Sensitive elements of the natural environments, including vegetation and
wildlife, must be protected and preserved.
28

During the daily activities of the concession, a multiplicity of methods exists for
preserving the environment. Some suggestions for this purpose are provided below
managers should take into consideration local environmental situations when designing
specific measures:

1. Hazardous or toxic substances should be disposed of and removed as per the
protected area agencys procedures;
2. The use of alternative energy sources such as solar power, wind power, and
other environmentally friendly power sources should be encouraged;
3. Disruption to local wildlife must be kept at minimal;
4. Concern for water preservation must be exercised by;
o Collecting rain water for non-potable uses;
o Installing low-flush toilets;
o Accessing groundwater as a source;
o Re-using sewage effluent/liquids for other uses; and,
o Re-using previously used water (gray water) for other uses.
5. Sound pollution must be minimized;
6. Non-recyclables containers should be avoided in favor of refillable containers;
7. Composting is encouraged; and,
8. All concession staff (including the owner and manager) must participate in
environmental training conducted by a park agency, whenever possible.

Examples of best practices in environmental conservation have been observed in
concession contracts around the world (Table 4). In these contracts, emphasis is put on
developing infrastructure in environmentally sensitive ways, using alternative energy
sources, managing waste, and assessing risk to the environment from the activity.

Table 4. Environmentally responsible practices in concession contracts (Wyman et al., 2011).
Aspect of concession contract and operations Examples in concession contracts
Infrastructure
Requires baseline information and
monitoring to assess changes
Chinas Sichuan Province: a biodiversity protection
plan is required for all infrastructure developments
Costa Rica: every concession must describe and
implement waste management in their facilities
29

Alternative energy
Involves a focus on emergent or recent
technologies
Mexico Sian Kaan Biosphere Reserve: the
Ecolodge Project design includes use of solar
energy for heating water, water recycling, natural
cross ventilation
Belizes Rio Bravo Conservation and Management
Area: infrastructure is encouraged to include solar
electricity
Chinas Wenhai Ecolodge: alternative energy and
waste management facilities have been installed
Waste management
Focus on biodegradation practices
Australias Great Keppel Island Resort: uses
vermicomposting to produce fertilizer
Indias Taj Jungle Lodge at Thekaddi: wastewater
is discharged into the root of plants for purification
Columbias Nevados Park: concessionaires are
required to manage hydrologic resources and
describe the supervision of environmental
protection, management of solid residuals,
separation, and recycling
Risk analysis
Involves an assessment of natural,
socio-cultural, and economic features of the
location
Guatemala: concessions are required to have
cost-benefit analyzes, environmental impact
assessments, and tourism management plans
New Zealand: requires all concessions to list
potential effects of activities and ways that they will
be avoided or remedied
Botswana: has guidelines for outsourcing the
operation and management of public campgrounds
via an environmental impact assessment by the
bidder, during development and operational phases
30

1.5 How can concessionaires be monitored?
The concession contract should clearly state how record keeping and utility usage
are important aspects of park monitoring of concessionaire activities. This applies to
all concessions, whether they are private or non-profit. At the end of the operating
year, each concession must complete an annual financial report and declare total gross
receipts from all sales. The park agency may also request that the concession submit a
balance sheet, activity summary report, or customer surveys. Required
documentation, statements, and books must be submitted before the due date to avoid
late fees. In Chile, late payments result in a fine of about US$600 per day, while
Columbia requires a daily pay equal to one months salary for late submissions
(Wyman, et al. 2011).

Security of cash, cheque, and electronic transactions is an important issue in the
park-concession relationship (J. Lohuis, pers. comm.). Electronic transactions
involving VISA, AMEX, Mastercard, and so on must be compliant with Payment Card
Industry standards, typically achieved through creating a point-of-sale system (J.
Lohuis, pers. comm.). An on-site mechanism to secure funds generated within the
park is also necessary, and may include safes or a secure pickup location (J. Lohuis,
pers. comm.). It is critical that the park establish clear systems to prevent fraud and
theft, as at least 5% of employees will try to steal or commit fraud (J. Lohuis, pers.
comm.). These systems can include video monitoring, controlled self-assessment,
basic audit controls, no single-point requests or approvals by the same person, and so
on (J. Lohuis, pers. comm.).
In the US national parks a Commercial Use Authorization (CUA) is a permit that
authorizes commercial services to be provided to park visitors under limited
circumstances. These are not considered to be concession contracts (NPS, 2012a).
About 4,000 of these occur in the NPS at any one time (Pendry, pers. comm.). In the
Alaskan region of the NPS, yearly reports are due November 15
th
, even if no activity has
been conducted (NPS, 2009). All holders of a CUA must complete both a Gross
Receipt Report and Activity Report for all parks in which authorization was issued
(NPS, 2009). All submitted records are then examined and audited by the authorized
representatives (either park staff or external auditors). These and other documents
may be reviewed by either a centralized or decentralized management structure;
centralization is occasionally used to address large-scale concession contracts where
efficiency and coherent policy come at a premium, while decentralized facilities are
31

used for smaller operations where contact with operators is more important (Memmel,
1963; Thompson, 2009).
Utility services are required for concession operations. Necessary utilities include
electricity, communication systems, natural gas and water, plus the disposal of
wastewater and solid waste. In some cases, the park agency provides utilities to the
concessionaire at rates in accordance with applicable laws and specified under contract.
The concessionaire may also, with the agencys written approval, secure necessary
utilities (at its own expenses) from sources outside the park. The utility provision
must also be in accordance with the parks environmental and social goals.
Concessionaires should be aware of these issues during contract pricing and
negotiations.
1.6 Can Friends Groups provide park services?
Some park agencies have a policy to encourage the development of Friends Groups
within parks. These non-governmental organizations work under contract with a
park. Typically, they have a major role in the provision of education and
interpretation services. Occasionally, they are given other roles, such as providing
transit (see Figure 3) or food services. There are several advantages for the use of such
groups, including:
1. The attraction of volunteer donations of time and money;
2. Attracts volunteers with a broader skill set;
3. The group engages park visitors and local citizens;
4. Can be more entrepreneurial;
5. Financially very efficient;
6. Develops a cadre of strong supporters from the local community and from
visitors; and,
7. Helps develop a culture of support for park programs (Eagles, 2012).
Non-profit Friends Groups also have disadvantages for park agencies (J. Lohuis,
pers. comm.). As with private concessionaires, park agencies struggle to monitor the
income level of non-profit concessions. Volunteers assisting the Friends Group may
not be properly trained; this leaves the park agency in a difficult legal situation, as
public safety remains the responsibility of park management (J. Lohuis, pers. comm.).
Ontario Parks (Canada) is beginning to focus more on non-profits as service providers,
and has created a service agreement template can be used by all Friends Groups.
32

Figure 3. In Point Pelee National Park the transit is operated by the Friends of Point Pelee.
1.7 Why might the park agency operate as a parastatal?
Some park agencies can function like a business; this situation is referred to as a
parastatal. This involves, at a minimum, the legal authority to function like a business,
with internal financial control and the ability to set prices. Moos (2002) describes the
movement of Ontario Parks from a typical government operation, to a mild form of
parastatal. The advantages of a parastatal include:
1. High financial return to the parks.
2. Encourages efficient operations.
3. Encourages high service quality.
4. Responsive to market needs.
5. Increases morale for employees.
6. Entrepreneurial behaviour possible.
The disadvantages of a parastatal include:
33

1. Requires government to pass laws and policies to enable the agency to operate
like a business.
2. Finances are tied to tourism market demand.
3. There is some concern about negative environmental impact.
4. Requires visitation above a financially critical level (Eagles, 2012).
There are many examples of parastatals operating in parks; SANParks implemented
a very successful commercialization programme which generated financial benefits that
contributed to conservation costs, subsidizing access for low-income minority groups,
and expanding the National Park estate (Fearnhead, 2007) (see Figure 4).

Figure 4. Reception Center at Skukuza in Kruger National Park. SANParks functions as a parastatal.
1.8 What conflicts might arise amongst service providers?
It is possible that conflicts will arise between different parties. For example, the
commercial concessionaires in Yellowstone National Park have non-competitive clauses
34

in their contracts. This limits the NGO, the Yellowstone Institute, from selling clothing
and other products currently sold by the concessionaries (SNS, 2012). SANParks has
found their commercialization of the parks to be delayed by conflicts between their
organization and the concessionaires; for example, they have had to order the removal
of a radio tower and relocation of a boardwalk (Fearnhead, 2007). These delays add to
the already lengthy process of establishing the concessionaire through environmental
assessments and other bureaucratic requirements (Fearnhead, 2007). Park agencies
often encouraged the development of Friends Groups to assist with providing visitor
services and to encourage donations and community involvement. However, when
park agencies move into earning increases income from visitor services, they may see
the Friends Groups as a competitor.
Visitor service management must consider overall governance principles when
resolving conflicts. For example, financial efficiency must be counter balanced by
considerations of equity and consensus orientation.
1.9 What happens if a contractor goes bankrupt?
A major difficult occurs if a contractor goes out of business, through bankruptcy,
during the contract period. There could be many reasons for bankruptcy, but an
unfortunate one could be an outcome of the bidding process. For example, if a new
contractor wins a bidding process through a very low bid that is not financially viable,
major problems can take place. It is a nightmare for park managers if a major
contractor goes out of business during periods of high usage.
Therefore, it is important this possibility be considered in all aspects of contracting,
from bidding through to contract monitoring. If ongoing monitoring suggests that
major financial problems are occurring with a contract, exigency plans must be made.
1.10 Summary: What are the pros and cons of using a concessionaire?
There are numerous advantages to the park agency from the use of concessionaire:
1. Minimizing government cost;
2. Maximizing quality of visitor services;
3. Specialized expertise of the contractor;
4. Increased efficiency with the reallocation of park resources to better use;
5. The government is seen as not competing with private enterprise;
35

6. Contracting concession services can encourage local economic development;
7. Creates business opportunities and job creation for the local population;
8. Direct redistribution to local people through contracts rather than indirect
taxation and subsidies;
9. Flexibility in purchasing, resulting in cheaper prices;
10. Selection process of the bid is open and transparent which benefits the public;
11. Less dependent on political changes, compared to park agency;
12. Some income for park agency; and,
13. Lower liability exposure to park agency;
There are disadvantages with the use of concessionaires, including:
1. Loss of control by park to an outside party;
2. Irreversibility of some decisions;
3. Selection of best bidder can be time-consuming and expensive;
4. Potential source of corruption within agency;
5. Conflict occurs if concessionaire's objectives are different than those of the
park;
6. Difficulty of monitoring the contract;
7. Concessionaire can adversely influence agency policy;
8. Concession may not be workable in locations with low visitor numbers;
9. Removing a bad concessionaire can be very difficult;
10. Concessionaire will only work within the contract; their staff will not be
available for other park functions;
11. Loss of potential income to the park; and,
12. Loss of direct contact of park agency with park visitors (Eagles, 2012).
Park policy makers must weigh the costs against the benefits in the use of
concessionaires. Depending upon this evaluation a decision will be made on whether
to outsource or insource the service (see Figure 5).
36

Figure 5. Niagara Falls experience. The Niagara Parks Commission (Ontario, Canada) provides
many recreation programs and facilities with its own staff, without the use of concessionaires or
contractors.
37

Chapter 2: Two Perspectives of Concessionaire Expertise

In this chapter two, an overview of concessionaire expertise will be provided.
Wyman et al., (2011) noted that best practices in protected areas are often not specific
enough when they create requirements for concession qualifications, as well as
concession legal and financial responsibilities. Expertise can range from normal
business management knowledge through to highly-specialized resource management
training. In this chapter, necessary qualifications for the external organization will be
covered from both the park agency and concessionaire perspective. It is critical that the
concessionaires expertise be matched with the needs of the park agency; this ensures
that issues are dealt with proactively and in a cooperative fashion (Thompson, 2009).

2.0 What are the required qualifications from the park agencys perspective?

The park agency should focus on several key concessionaire qualifications
throughout the bidding, contracting, and management processes. Potential bidders
can be asked to provide their performance profiles to the park agency 3 to 6 months
before the bidding date. In the NPS and SANParks, a Request for Qualifications (RFQ)
may be used prior to the official Request for Proposals (RFP) process to ensure that the
applicant has the proper experience and financial ability (Fearnhead, 2007; Thompson,
2009). The following criteria may be used to assess concessionaire qualifications
during bidding:

1. Performance: how experienced are they in the relevant market? Do they have a
proven record of financial success? What is their current financial standing?
2. Brand: what is their existing brand? What kind of brand do they propose to
develop for their operations within the park?
3. Personnel: are they equipped with the skills needed for the job? Are they trained
in safety, environmental management, and high-quality visitor service
provision? What level of language fluency is required in their staff?
4. Reputation: are they perceived locally as being sensitive towards cultural and
environmental concerns? Are they known for developing good partnerships and
fair dealings?
5. Standards: what are their human resource policies and training abilities? What is
their marketing strategy? What are their environmental and accounting abilities?
38

In Botswana, concessions are based on criteria established by conservation
legislation, including experience, financial capacity, and demonstrated knowledge
(Wyman et al., 2011). SANParks requires that the concessionaire exhibit, throughout
the entire contract, the qualities through which it qualified initially for the concession
(Fearnhead, 2007). Costa Rica requires that staff have bilingual language ability
(Spanish and English), as well as a high school education (Wyman et al., 2011).
Columbia requires the concessionaire to have an initial capital of about US$1,000, but no
specific abilities (Wyman et al., 2011).

Depending on the type of concessionaire providing services, the park may focus on
visitor education and high service quality during the contracting and management
processes (Jones, 1999). First, concessionaires need to be qualified to provide
environmental education to visitors; this involves teaching the public about
environmental preservation through interpretive programs, guidebooks, pamphlets,
videos, brochures, or compact discs. Concession education programs should also
cover the cultural history and evolution of the park. Importantly, tourists who have an
interest in history will seek products which are authentic and appear real in the
context of the parks cultural development over time (Littrell, Anderson, & Brown,
1993). Consequently, concession staff should be able to provide visitors with cultural
information and products that agree with this information.

High-quality visitor services are important for concessionaires providing visitor
services within the park. Satisfied visitors who leave the park happy with their
experience are more likely to return. This increases the revenue potential of both the
park agency and the concessionaire. To properly satisfy the visitors, concessionaires
must be attentive to pre-trip marketing, the quality of experience within the park, and
post-trip reflections. Concessions should ensure that wide-spread, public marketing of
the park is accurate of what the visitor can expect during their trip. For example, the
concessionaire should not be promising plentiful campsites to campers if they are
actually a remote, sparsely populated location.

Second, concessionaires should ensure that the experience provided to the park
visitor is of good quality. This requires that they properly train staff, have sufficient
staff to respond quickly to visitor concerns, and maintain park facilities. Maintenance
is one of the most overlooked areas of concession contracting (Wyman et al., 2011).
Reserve for replacement is a term that represents the cash paid by the operator into an
account that can only be used for ongoing capital maintenance costs (Wyman et al.,
39

2011). The NPS makes the concessionaire responsible for all capital maintenance and
improvement activities (Wyman et al., 2011). Belize requires that 10% of visitor
entrance fees contribute to infrastructure maintenance and repair (Wyman et al., 2011).

Post-trip, visitors will have certain reflections and ideas regarding their park
experience and things that they would like to see improved. Park managers should
stay in touch with customers (i.e. through personal conversations) and front-line staff
(i.e. through regular staff meetings) to evaluate where visitor experiences could be
improved. The concessionaires perspectives of qualifications for operating in a park
setting are discussed next.

2.1 What are the required qualifications from the concessionaires perspective?

The concessionaire operating in a park setting is expected to provide high-quality
business services as well as meet park agency conservation goals. Private companies
are more likely to find innovative and responsive means of addressing these dual
mandates when compared to government bureaucracies (Wyman et al., 2011).
Business plans, adherence to legal regulations, insurance, and staff training are all used
for this purpose. Business plans are developed based on the prospectus prepared by
the park agency and ongoing discussions with the park agency staff members. The
business plan involves:

1. Defining a business opportunity;
2. Evaluating the market and investing in promotional strategies to target specific
visitors with park services or goods;
3. Structuring a management team;
4. Setting short- and long-term goals;
5. Producing a sound financial plan; and,
6. Identifying and mitigating potential business risks.

Concessionaires are responsible for developing a familiarity with all national,
provincial, and municipal regulations that govern the park, but are external to its
operations. At the broadest level, the regulations to which a concessionaire must
adhere can be classified as followed:

1. License for business operations;
40

2. Business and liability insurance;
3. Health, hygiene and sanitation standards;
4. Environmental protection measures;
5. Workers safety, workers compensation and occupational standards, if
applicable; and,
6. Emergency procedures.

If the concessionaire does not adhere to these regulations, termination of the
contract may follow. The NPS has stated specific reasons for park managers to
suspend, restrict, or revoke private-company privileges in a policy document (United
States Department of the Interior [USDI], 2009). The policy is, however, only a
guideline and park managers retain the authority to take alternative action based on the
unique context of the issue (USDI, 2009). Each time a violation occurs, the park
manager is encouraged to take stronger action. The following are reasons for
terminating the contract (USDI (2009) :

1. Entering a plea of guilty or no contest or being found guilty of violating a state or
federal law or regulation where a link exists between the offense and the
business activity authorized by the National Park System;
2. Failure to comply with state or federal law or regulation where a link exists
between the offense and the business activity authorized by the National Park
System and regardless of whether a court enters a finding of guilt;
3. Violation of 18 U.S.C. 1001, i.e. providing false information to any agency or
department of the United States;
4. Failure to comply with a federal or state health or safety code or regulation when
conducting activities authorized by the National Park System; or,
5. Failure to comply with the provisions and conditions of the National Park
System.

The concessionaire must hold an appropriate public liability insurance and property
damage insurance. Public liability insurance is meant to protect both the
concessionaire and park agency from public grievances; its amount is usually
determined by the government, local law or business community. Purchase of public
liability insurance requires that the concessionaire co-name the government as
co-insurer. For property damage insurance, the amount should be sufficient for the
41

replacement of all concession facilities. A copy of the Certificate of Insurance should
be signed and recorded by the park agency Superintendent and concessionaire on a
yearly basis. The insurance should cover bodily injury, property damage, fire damage,
liquor liability, property insurance, machinery coverage, and business interruptions
(e.g. property damage preventing normal operations). The park agency should
stipulate that it will not be responsible for any omissions or inadequacies of insurance
coverage and amounts, in the event that the concessionaires insurance coverage is
inadequate.

Lastly, staff training is a fairly major issue for the concessionaires operations. The
employees of a tourism concession must have skills, knowledge, and ability in a diverse
range of subject area. It is common for concession contracts to stipulate that local
people must be hired to work within the concession; this ensures that they have
knowledge about the area (Fearnhead, 2007). Guatemala, Chile, and South Africa all
encourage capacity building and technical training of communities local to their parks
through employment opportunities and training grants (Wyman et al., 2011). Essential
staff should also be encouraged and/or funded to take registered, industry-approved
courses that can improve concession operations. Staff abilities should be developed in
the following areas:

1. Cross-cultural interactions and cultural diversity training (to help staff better
respond to customer needs);
2. Customer service training (e.g. meeting and greeting customers); and,
3. Occupational training (e.g. internet skills, first aid, etc.).

The concessionaire should not employ family members related to park or
concession staff so as to avoid conflicts of interest. Paying a low wage to employees in
the parks also means that employees will have lower qualifications, which could lower
the experience of the park visitor. This is an important consideration for the
concessionaires business planning.

One author, Eagles, was told by several park managers that concession staff can be
a source of crime in parks. This most often happens when minimum-wage, unskilled
staff members are used by a contractor. When a concessionaire provides minimum
cost services, the tendency is to lower the labour costs as much as possible.

42

One final issue related to staff is housing. Since many parks are operated in
remote locations, staff housing may be necessary. Even in less-remote locations,
housing can be expensive due to the competition with the tourism industry for rooms.
Many service jobs in tourism are low wage and housing must be low cost if these
people are to have adequate housing. Banff National Park requires all business
buildings in the main Town of Banff to contain housing, in order to provide a stock of
housing for hospitality employees. If housing is provided by the contractor, room and
board charges should be in accordance with an employees income. A meal plan
which rotates weekly should also be offered, as in the three-week rotation schedule of
meals at the Grand Canyon (Grand Canyon National Park Operating Plan [GCNPOP],
2001). The provision of adequate accommodation and meals can be a major issue in
contract negotiations.

It is possible for temporary housing to be provided for both staff and park visitors
(see Figure 6). The next chapter covers the related issue of retail provision in protected
areas.

Figure 6. Yurt in Algonquin Provincial Park (Canada) offers semi-permanent tents for a four-season
camping experience. Ontario Parks operates these directly, without the use of a contractor.

43

Chapter 3: The Retail Sector in Protected Areas

This chapter outlines the contributions that retail sales can make for the economic,
social, and cultural development of a park. There is usually demand from park
visitors for some level of retail. This can range from recreation supplies to souvenirs.
There are many options for the provision of sales outlets.

If local people are encouraged to sell goods and services within the park, they can
assist with local economic development (see Figure 7). Contracts, licences, or permits
around their activities should be properly designed to ensure that money raised from
sales is reinvested into the preservation of the natural area and capacity-building for the
local community as a whole. This is one of the most challenging, but important, roles
of the park manager.

Figure 7. Concessionaire store in Mopane Camp in Kruger National Park (South Africa).
44

3.0 What are the benefits of selling retail items in protected areas?

Retail sales can be a significant source of income due to the high levels of demand
for these items and the restricted supply in most parks (see Figure 8). Eco- and
nature-tourists are relatively wealthy consumers who have a strong interest in
purchasing aspects of local cultures and authentic handicrafts (Healy, 1994). Goodwin
and Dilys (2001) found that people living in and around a protected area in Zimbabwe
were quite eager to gain revenue through the sale of handicrafts to international
visitors. If done properly, this exchange of goods can be mutually beneficial;
generating an income for locals, on one hand, and satisfying tourist needs, on the other
(Lindberg & Enriquez, 1993; Healy, 1994).

Figure 8. Retail store operated by the Niagara Parks Commission (Canada).

Globally, however, there are significant disparities in how these goods are sold to
consumers. In the Organization for Economic Co-operation and Development (OECD)
countries, many protected area agencies are quite successful in their management of gift
and retail sales concessions. Protected area agencies operating in non-OECD countries
45

are often deficient in their knowledge of concession management practices. There are
also some park agencies which do not encourage or facilitate concessions in the parks,
opting to instead allow local crafters to sell their wares to tourists at the park gates.

Relationships with local communities have traditionally been challenging for park
managers, though there are many positive examples of these co-management
agreements. Strict preservationist policies in some areas of South Africa have kept
locals out of park management activities, generating local resistance and resentment
(South African Parks, 2000). In the NPS, consultation with local communities occurs
throughout the entire planning and management process (Thompson, 2009).
Management plans in Peru are required to describe the potential cultural impacts on the
population, along with associated indicators and mitigation measures (Wyman et al.,
2011). In Botswana, concession fees from park visitation go to local communities and
are also applied to natural resource management (Wyman et al., 2011). These positive
examples provide proof that local-park relationships can be mutually beneficial. Also,
these benefits must be effectively communicated (see Figure 9).

Figure 9. The Niagara Parks Commission informs the park visitor that retail sales benefit the park.

46

Parks Canada has had varying levels of success in engaging local people in park
management strategies. The Tuktut Nogait Agreement of 2009 was created to
prioritize Inuvialuit businesses, groups, and individuals (Parks Canada, 2009).
Thompson (2009), however, found that Parks Canada cuts out the majority of local
decision makers and does not readily share concession-related information with the
public through its website or other forms of media. This greatly reduces the
transparency of Parks Canadas business operations, and could reduce the value of its
operations (Thompson, 2009). Income from concessions in Parks Canada remains low
at only CAD$8.2 million, compared to the US$60 million of the NPS (Thompson, 2009).

In general, the opening of retail outlets within the parks should be guided by
specific, positive objectives. These should include benefits to the community through
diversification of employment options and more entrepreneurial opportunities;
education of the visitor through provision of handicrafts that are representative of local
natural and heritage features; safety and enjoyment of the visitor through the provision
of outdoor recreation equipment; and providing the visitor with a tangible reminder of
their visit (see Figure 10). To achieve these goals, both the park agency and
concessionaire should work together to ensure the inclusion of locals in retail
opportunities and the sale of local goods. For example, the park may give special
preference to local artisans seeking a license to sell their merchandise within park
boundaries. In Zambia, privatization of game lodges is done internationally, but
certain leases are reserved for domestic, local bidders (Wyman et al., 2011). The
Seychelles goes one step further, requiring that all tourism concession services must
have local partners and hire a minimum percentage of staff from Seychelles citizens
(Wyman et al., 2011).

Namibia is quite progressive in its protected-area regulations, and includes locals in
many park management plans and tendering for external services (Thompson, 2009).
The Etendeka Lodge Company, for example, was selected by Namibias MET to
provide services because of its proven history of working with local communities and
offering them financially empowering opportunities (ASLF, 2012). The MET has been
guided in its operations by the introduction of a new concessions policy in 2007, which
combines practices from around the world (Thompson, 2009). Similarly, the NSW of
Australia encourages aboriginal joint management of its parks, with consideration for
the pros and cons associated with co-management and joint management (New South
Wales Government Environment and Heritage, 2011b).

47

Park managers must realize, however, that involving local communities in political
park management activities can delay certain processes. In Australia, the process of
creating concessions is delayed by the political environment in which the NSW operates
(Thompson, 2009). Renegotiation of these contracts also occurs due to contract
characteristics, regulatory environment, and economic shocks; this process can be
delayed by multiple stakeholder involvement (Guasch et al., 2006). Tenders being
renegotiated are subject to the Audit Act, the Independent Commission Against Corruption
Act, and government probity requirements (Thompson, 2009). Public involvement can
also carry an element of risk for park agencies, as locals may not be skilled in service
provision (Thompson, 2009). Local involvement therefore holds both benefits and
challenges for park agencies; proper management can assist in reducing these
challenges.

Figure 10. Ontario Parks is increasingly moving from concessionaire operation of retail to park
operations.
48

3.1 How can park managers monitor local retail concessions?

The park agency should monitor and communicate with the local retail concessions
operating in the park. Monitoring should be done on an annual basis to identify and
restrict any negative impacts caused by the local concessionaire. Baseline standards of
impact should be developed by the park agency, with consideration for the level of
infrastructure, skills, and technological expertise present in the country. In the
GBRMPA, for example, an environmental management charge is used to finance
low-impact park operations (Thompson, 2009). Unlike large, multi-national
concessionaires, park agencies may have to provide local business with special
exemptions when they are exceeding impact levels. However, these exemptions must
be granted with consideration towards the local concessions efforts to reduce the
negative impacts.

To ensure that these negative impacts are being reduced, the park agency should
create ongoing communication lines with the local concessionaire (see Figure 11).
Importantly, the park agency should share with the local concessionaire information
from market research, customer satisfaction surveys, environmental assessments, and
other reports deemed important to management operation. In turn, the local
concession should share with the park agency their needs for creating an
environmentally-friendly and locally beneficial business.

Figure 11. Presquile Provincial Park (Ontario, Canada) encourages Friends Groups to operate a gift
shop within a park building.
49

Chapter 4: The Accommodation Sector in Protected Areas

Accommodation is a fundamental element of the tourism product, and includes
various hospitality and recreational facilities for visitors, staff, and local residents.
About one-third of total trip expenditure can be attributed to accommodation spending
(Cooper et al., 1998, p. 313), and a tourists experience can be greatly affected by the
type and quality of accommodation available (Goss-Turner, 1996). Nature-based and
park tourism are reliant on accommodations for generating tourist income (Eagles,
2002). However, the development of accommodation facilities within protected area
boundaries must be carefully managed.

Chapter 4 discusses issues surrounding the provision of accommodation in parks
and protected areas.

Figure 12. Campsites within campgrounds are a common accommodation facility in many parks.

50

4.0 What are the different types of accommodations available in protected
areas?

There are a diverse number of accommodation types available within the protected
areas (see Figure 12). Three terms are typically used to classify the various forms of
accommodation. Categorization refers to the separation of accommodation by type (e.g.
hotels, motels, guesthouses, etc.). Classification distinguishes accommodation on the
basis of certain physical features (e.g. number of rooms with private showers).
Grading identifies accommodation according to certain verifiable objective features of
the service offered (e.g. the availability of interpretation). The different incarnations of
accommodation according to these terms are presented next.

Resort hotels are accommodation facilities located either within or proximate to
protected areas. Unlike eco-lodge facilities, they tend to have greater lodging capacity
and are operated with a full suite of services (e.g. restaurants, bars, business centers,
shopping arcades, etc.). Though some of these large hotel chains (e.g. Best Western,
Holiday Inn) have entered the eco-tourism market and are successfully operating
resorts in protected areas, their large size means that they inevitably cause some kind of
environmental damage. Good environmental practice in departmental operation and
management philosophy are therefore vital to their sustainable operation in protected
areas. Large resort hotels were constructed early in the development of the national
parks in the USA and Canada. However, very few have been constructed for many
decades.

The term eco-lodge is used to identify a nature-dependent tourist lodge that meets
the philosophy and principles of ecotourism. Russell, Bottrill and Meredith (1995) and
(Bottrill and Pearce 1995) summarized the characteristics of eco-lodge operations and
facilities as follows:

Located in an isolated and protected natural setting;
Designed to blend in with the local environment and encourage people to enjoy
the locations natural setting;
Aimed at offering tourists a comfortable, educational, and participatory
experience; and,
Priced moderately as an all-inclusive vacation package.

51

Guest houses, bed and breakfasts (B&B), and second home ownership are a group
of accommodation facilities which are often located outside the park boundaries, but
profit from the presence of park visitors. Guest houses and B&Bs can be privately run
or concession businesses, but are aimed at providing an informal, friendly, and relaxed
atmosphere. Both types of accommodation can be highly valued by park visitors, but
tend to offer a limited number of bedrooms. Second home owners use these buildings
for short to long-term stays near the protected area; however, they may also lease them
out to interested visitors.

Lastly, most parks contain some form of camping accommodation. Front country
campgrounds are accessed by automobiles. Typically campgrounds contain many
campsites, ranging from only a few sites to thousands. Campsites vary in facilities;
ranging from just flat piece of ground suitable for a tent, to a large area with water and
sewer hookups suitable for a recreational vehicle. These campgrounds may have
sophisticated infrastructure with water and sewer systems, shower blocks and
recreation facilities such as playgrounds for children. Back-country campsites are
remote and accessed by hiking, canoeing and by horseback. Typically the facilities are
primitive, with the only structure being a toilet.

Accommodation facilities can be operated by the park managers or by private
companies (See Figure 13). The tourists gain access to the facilities by purchasing a use
permit, typically with a per night charge. It is relatively common for campers to stay
for long periods of time, such as a week or more. Since camping is a very inexpensive
form of accommodation, some parks experience problems with people living
permanently in the campgrounds. Therefore some parks limiting long stay use, in
order to make the campsites available for others.
52

Figure 13. Campsite suitable for recreation vehicles in Algonquin Provincial Park (Canada)
4.1 How can accommodations be managed by the park agency?

The different management approaches for accommodations in park environments
include leasing, franchising, management contracts, or equity participation shares.
Within each of these, there should be ample consideration for the visitors quality of
experience, visitor satisfaction levels, and the parks environmental conservation. Care
should also be taken that the selected management approach is beneficial for all parties
involved.

In a leasing agreement, a concessionaire manages and controls the facility with the
park agency as an external player. The park agency will, in this case, collect either: A)
a fixed fee (when the park agency provides the accommodation facilities); B) a lump
sum of fee (which may be paid at regular installments over a specified period of time);
C) percentage of profits (this is a form of operating lease in which the concessionaire
takes charge of operation); and, D) mixed fee plan (this is a basic rent paid at regular
time installments along with a percentage of the gross revenue) (see Figure 14).
53

Figure 14. Killarney Lodge in Algonquin Provincial Park (Canada) operates on the basis of a
long-term lease.
In a franchising agreement, the park agency has active management and control but
is using another companys management system. It is useful for park agencies which
have limited management experience and are willing to pay for central reservation
services, advertising and public relations, staff training, and sometimes payroll costs of
supervisory personnel. This cost could be paid in an overall fee, fixed charge per bed
night, or percentage of room revenue.

One option for management contracts is to have all employees at the
accommodation facility paid by the park agency. The private concessionaire is the
manager and operator of the accommodation facility. Within this arrangement, the
park agency is required to pay a minimum fee to the concessionaire, regardless of the
performance of the facility. Although this option may at first appear undesirable to
the park agency, management by an external business can bring in the following
services:
1. Feasibility reports, marketing surveys, and more effective advertising;
2. Architectural consulting for design and renovation;
3. Central reservation system;
54

4. Efficient training and staff recruitment;
5. Cost-deduction purchasing; and,
6. A well-known management brand.
Equity participation shares are the final management structure for accommodations
in protected areas. In this case, the concessionaire requests equity from the
concessionaire, rather than the technical assistance described under management
contracts. Equity participation means that the concessionaires faith in the viability of
the project is expressed through financial contributions, rather than in-kind goods or
services. Su et al., (2007) found that equity participation by the park agency in a
private company in nature reserves resulted in greater income from contract fees and
dividends. It also provided reserve managers with authority through membership in
the corporate bonds (Su et al., 2007). Interestingly, there is greater transparency
through this arrangement due the government regulations governing private
corporation finances.

When the park agency and concessionaire are working together directly to provide
visitor accommodation, cooperation is needed with respect to the following issues:
1. Marketing; the accommodation should market itself within the broader
framework of the protected area.
2. Hours of operation; certain services (e.g. telephone operator) should be available 24
hours a day, while some services (e.g. guiding) might be available for only 12-18
hours a day.
3. Staff training; staff should be from local communities, and their training should
ensure that they meet certain standards of service provision.
4. Books and record-keeping; recording all financial transactions occurring in the
accommodation facility is essential for auditing by the park agency and
transition of the business to successors. Information should be kept on:
a. Overnight customers profiles (e.g. preferences)
b. Booking agency
c. Booking price
d. Date
e. Consuming amount
f. Satisfactory degree
g. Agency incentives
5. Rates; the park agency may either control the prices of accommodation, or
provide limits to what the concessionaire can charge park visitors. Since
55

accommodation rates cover a range of services (e.g. room service, recreation,
food, etc.), there is likely to be a mix of these rate-setting methods.
6. Reservation system; reservation systems are essential to accurately booking visitor
accommodations.
For large and complex situations, special arrangements may need to be made. Fort
Baker (see Figure 15), a former military complex in California, was transferred to the
National Park Service and added to Golden Gate National Recreation Area. In order
to retrofit the military buildings for hotel and convention facilities, a long term lease of
60 years was negotiated with a private company. This company invested
US$99,000,000 to update older buildings and build new buildings, all with high levels of
environmental sustainability construction. It is common for park agencies to use
private companies when high levels of funding are needed for capital development.
These companies then demand long lease periods.

Figure 15. Fort Baker, a former military installation, is within the Golden Gate National Recreation
Area (USA). It is now operated as a private resort named Cavallo Point Lodge.

56

4.2 How can accommodations be monitored by the park agency?

Monitoring by the park agency should include regular inspections of the
concessionaires books and records, comments from the local community, and
environmental audits. The park agency should reserve an exclusive right for
inspection of all books and records, as well as the property itself. This inspection
should be done regularly. An independent auditor may be employed by the park
agency to check the authenticity of financial account reporting. The contributions and
input from the local community should also be considered by park managers when
reviewing accommodation practices and activities (see Figure 16). Some agencies,
such as the DOC in New Zealand and the NSW in Australia, regularly commission
external reviews of their own operations and legal practices, which helps increase their
transparency as a business (Thompson, 2009).

Figure 16. The Rondovel at the Skukuza Camp in Kruger National Park (South Africa) is owned and
operated by SANParks. SANParks also has concessionaires operating accommodation units,
while at least one is operated by a community group.
57

Park managers can monitor environmental impacts using tools such as carrying
capacity and limits of acceptable change (Clark and Stankey, 1979; Butler and
Waldbrook, 1991; Boyd and Butler, 1996). Environmental impacts are one of the most
predominant concerns surrounding accommodation in protected areas. The Hotel
Catering and Institutional Management Association (HCIMA, 1993) has tried to
develop recommendations for accommodation businesses seeking to reduce their
environmental impact. There are also some accommodations in protected areas which
use best environmental practices to reduce their impacts (Table 5).

Table 5. Environmental best practices for accommodation (United Nations Environment
Programme-Industry and Environment [UNEP-IE] and International Hotel and Restaurant
Association [IHA], 1996).
Best Practices Property and Location Characteristics
Environmentally Harmonized
Planning and Design
Property: Narayani Safari Hotel
and Lodge, Nepal.
Location: on the periphery of the
Royal Chitwan National Park.
The accommodation facility was
built outside of the park for
conservation purposes, with the
investor seeking permission to use
the park only for wildlife viewing
trips. This created a marketing
disadvantage for the
accommodation facility, but helped
to conserve the natural environment
within the park.
Environmentally Beneficial
Operations
Property: Derwentwater Hotel,
Keswick, UK.
Location: the northwestern shore
of Lake Derwentwater
Began a suite of different programs
to reduce water and energy
consumption, as well as reduce
waste production. Example
activities include: reduced-energy
housekeeping, waste-free meals,
and refillable drink dispensers.

58

Environmentally Beneficial
Maintenance and Renovation
Property: Budapest Hilton,
Hungary.
Location: near UNESCOs
heritage site.
The Budapest Hilton and Budapest
Marriott initiated a joint, collective
waste management effort for
members of the Hungarian Hotel
association. This later turned into
The Budapest Hotels Collective
Waste Management Programme.
Promotion, Communication
and Education of
Management Vision and
Mission
Property: Phuket Yacht Club,
Thailand.
Location: on Nai Harn Beach
Resort.
Developed the notion of
environmental stewardship within
the local community, which
promoted a positive and caring
attitude towards the environment.
Example activities include: training
workshops for Thai Hotel
Association members; offering
environmental seminars for Phuket
police; and public relation activities
(e.g. tree planting).

59

Chapter 5: Transportation in Protected Areas

Transportation in protected areas can be divided into infrastructure (e.g. roads) and
services (e.g. on-site transit). There is often a complicated sharing of roles in park
infrastructure. Sometimes roads in parks are not owned by the park, but by another
government agency such as a transportation agency. In this case the cost of
maintenance, which can be high, is the responsibility of that agency. But the park may
be prohibited from charging fees to enter the park on the road since the park does not
have the legal authority to undertake these activities on another agencys land.

Transportation infrastructure in parks typically involves roads, air strips and
facilities for specialized transit, such a boat launches, aerial tramways, or white water
landing facilities (see Figure 17). Some parks offer horseback riding and touring
activities, with the park providing the trails but a private concessionaire providing the
horses and all the associated barns and corrals. To reduce the impact of parking by
large numbers of private vehicles, some parks have introduced transit, forcing visitors
to park outside the park or near the entrance station and use the transit to access park
features.

Private infrastructure concessions in parks are controlled by leases,
rehabilitate-operate-transfer (ROT) contracts, or build-operate-transfer (BOT)
agreements (Lin, 2000). The BOT agreement is the most often used in the provision of
government services (Ziegler, 2011). Although these legal agreements allow private
enterprise to provide public infrastructure services, ownership of the infrastructure can
be complicated (Lin, 2000). This chapter identifies potential goals and challenges that
park managers face in the provision of complex transportation arrangements.

60

Figure 17. Boat transport for the eco-tourists who visit the Heron Island Resort in the Great Barrier
Reef Marine Park (Australia).
5.0 What goals should park managers set for a transportation concession?

Park managers should begin the process of developing goals by restating the
protected areas mandate and ensuring that the goals of the transportation
concessionaire will support or enhance these criteria. Goals for the concession
development should also be consistent with government legislation and local or
regional master plans. In general, goals for transportation should be as follows:

1. To provide a safe, efficient, and environmentally-sensitive transportation system
for visitors, employees, and residents. Transportation should be consistent with
management zoning and resource considerations. Emphasis should be placed
on non-motorized modes of transportation wherever feasible.
2. To provide an enriched visitor experience by facilitating, in an environmentally
sensitive way, their access to certain locations within the park.
3. To generate adequate compensation for the park agency from daily
transportation activities.

61

Goals for a transportation concession should also ensure that the park agency
maintains sufficient control of the activity and related costs. Infrastructure concessions
are complex, long-term, and high value; therefore, legal mechanisms such as a modified
cost plus incentive fee contract (CPIF) and BOT agreement can be used for this purpose.
CPIFs are used when the cost of the work cannot be estimated (Ziegler, 2011). The
public agency and concession will negotiate a target cost for completion of the contract,
and the concessionaire will be reimbursed by the public agency for all performance
expenses (Ziegler, 2011). Changes to any visitor fee charges are exposed to public
review, and the performance of the concessionaire determines how much they must pay
the park agency (Ziegler, 2011). The combination of these two factors increases the
efficiency of the transportation concession and the flexibility of the park agency
(Ziegler, 2011). Ideally, all contracts should contain flexible mechanisms which allow
for adaptation to changing circumstances (e.g. escape clauses, setting rules to determine
future prices) (Lin, 2000). However, the CPIF results in higher costs, shorter contract
terms, and no upfront cash infusions going to the park agency (Ziegler, 2011).

In the BOT agreement, the private concession designs, builds, and finances the
infrastructure (Ziegler, 2011). Proper design of the concession contract in a BOT
agreement is critical (Lin, 2000). These contracts can be problematic due to
asymmetrical information, incredible commitment, and contract incompleteness (Lin,
2000). Contract incompleteness occurs when there are external and unanticipated
shocks to the project (e.g. political) which disrupt the progress of the contract
relationship (Lin, 2000). Incredible commitment occurs when the contract cannot be
enforced in the long term; either party involved may change their original promises,
which damages the contract relationship Lin, 2000). Asymmetrical information is
when one party is better informed on some aspect of the joint activity (Lin, 2000).

There are solutions to the above contract problems, ensuring that the BOT
agreement is effective and responsive to user needs. Solutions to the incredible
commitment problem are to increase the effectiveness and partiality of the court
mechanism; describing, in advance, the service or product in detail, and; reducing the
complexity of the contracting environment (Lin, 2000). To avoid the need to
renegotiate a contract, several techniques can be used to increase commitment (Lin,
2000):

Provide alternative conflict resolution methods to all parties;
Provide a security arrangement if the other party defaults;
62

Select different regulating institutions, according to availability, within the
country;
Limit the power of incentives when commitment ability is weak;
Limit the number of concessions that a company can hold to provide an upper
level for their power; and,
Educate the public on the advantages and possible outcomes of the concession
contract.

The above can also apply to contract incompleteness and asymmetrical information.
Incomplete contracts are a result of expensive contracting measures, difficulty in
evaluating the impact of certain events, and the cost of involving the court in
proceedings (Lin, 2000). When a contract is incomplete, it may have ambiguous
words, ignored issues, and information that cannot be verified (e.g. with regards to the
term length) (Lin, 2000). Equal information between both parties can also eliminate
opportunistic dealings by the external company and encourages them to respond
efficiently to unexpected contingencies (Lin, 2000).

5.1 What challenges surround transportation concessions in protected areas?

Management structures, external regulations, policies, and law systems differ
widely across all countries of the world. These differences have significant
implications for the management of transportation concessions. For example, the Te
Urewera National Park in New Zealand has two categories of roads with separate
management systems (Department of Conservation [DOC], 2003). State highway
status remains on sections of road within the park between Onepoto and Aniwaniwa;
consequently, they are maintained under the Transit New Zealand Act 1998 (DOC,
2003). However, the Waimana Valley Road is managed jointly by the park
management and Whakatane District Council (DOC, 2003). Under this management
structure, the road is considered as an access route rather than a legal public road
(DOC, 2003). This complicated state of management is made even more difficult by
adjacent land tenure rights, in which some local residents prevent access to land for
transportation purposes (DOC, 2003). Park managers will therefore be challenged by
the diversity and complexity of transportation concessions, and must refer to legal
precedents in their local area for guidance.

63

Banff National Park in Canada owns all the roads in and through the park. Given
the high capacity and use of the roads, which includes part of the TransCanada
Highway, the cost of management (e.g. winter snow clearance) is very high. This park
has a large number of entrants that are not visitors; for example, transportation trucks
moving through the park for non-recreational purposes. However, since the park has
full authority over the road, use fees can be assigned and collected in order to recovery
road maintenance costs.

Algonquin Provincial Park in Ontario, Canada, has part of Highway 60 through the
park (see Figure 18). The park does not own the road, which means the Ministry of
Transportation covers the cost of maintenance. It also means that that Ministry insists
that road users not be stopped by park authorities. Therefore, since the early 1990s
road users can enter the park without stopping at a gate and fee collection facility.
This has resulted in a substantial number of park users bypassing the park gate,
reducing park income and increasing enforcement issues.

Figure 18. Highway 60 through Algonquin Provincial Park (Canada) provides valuable access to
the park for visitors. However, it is also heavily used for industrial and commercial traffic.
64

Point Pelee National Park in Canada is a small park largely composed of wetlands,
with one long forested peninsula containing most visitor use. To better manage
vehicles and parking, the park restricts auto use to only the northern part of the
peninsula. All private vehicles must park at the visitor center and take a transit to the
southern tip of the park. The road, the transit vehicles, and the parking lots are all
owned by the park. Uniquely, the operator of the transit is the Friends of Point Pelee
Park, an associated NGO. This is done through a contract.

Zion National Park in the USA has about 2,700,000 visitors a year, with 85% going
into one scenic canyon. To deal with auto congestion and parking problems the park
introduced a shuttle system in 2000. The shuttle system reduces vehicle noise, vehicle
emissions, and congestion. In the busy summer months a bus operates through the
canyon every 7 minutes. The park owns all the buses and the propane fuel. A
private contractor operates the shuttles by a service contract, not a concession contract.
The park managers estimate that by 2006 the shuttle system reduced vehicle use in the
park by about 50,000 miles of auto travel per day, or about 10.5 million miles of private
driving in the canyon per year. The shuttle is working very well, but an upcoming
issue is the capital cost of vehicle replacement (Whitworth, pers. comm.).

Some parks have specialized transportation, such as tramways into mountains or
boat trips across lakes (see Figure 19).

65

Figure 19. Parks may provide specialized transport, such as this tramway to a mountain top in
Jasper National Park (Canada).

66

Chapter 6: Food Sales and Restaurants in Protected Areas

Food service is essential to the visitors experience (see Figure 20). In parks food
provision generally occurs in two forms; groceries for people who cook and prepare the
food themselves and prepared food sold in restaurants. As occurs in transportation,
the park typically owns all the facilities, such as the stores and restaurants, while
private contractors operate the stores and restaurants.

Park agencies usually utilize concessionaires or licensees to provide food services.
The literature is unclear on why this occurs, but it likely the park agencies do not have
the expertise in their staff for the specialized activity of food provision. Most park
agencies do not have hospitality staff with specialized training in food and beverage.
South Africa National Parks contracted out 16 restaurants and determined that agency
benefitted financially from commercialization (Fearnhead, 2007).

Figure 20. Sausage cooking at the Vaattunky Eco-Resort in the Arctic Hiking Area (Finland). The
preparation and eating of food is a part of the ritual of outdoor recreation.
67

The Niagara Parks Commission of Ontario, Canada is one notable exception from
this rule, as they operate food services without the use of concessions. This
well-known park agency operates restaurants at three service levels; 1) inexpensive fast
food, 2) medium-priced restaurants, and 3) higher-priced fine dining. Ontario
Provincial Parks has started to lower the use of concessionaires in the parks fast food
restaurants, and use seasonal staff members hiring specifically for that purpose. In
both Niagara Parks and Ontario Parks the driving force for this policy change is the
opportunity for the parks to earn higher levels of income than would occur with a
contracted-out situation.
This chapter outlines the types of food provided in protected areas, how they can be
managed, as well as some concerns relating to human health. Material from this
section is primarily derived from the Grand Canyon National Park Operating Plan and
South African National Parks.
6.0 What types of food operations occur in protected areas?

There are two types of foods available in protected areas: raw food sales and
prepared food sales. Grocery stores that provide a mixture of processed and fresh
food are vital in some locales, and especially in parks that have accommodation
facilities in the park and are located remote from service communities. The provision
of prepared foods in restaurants and take-out sites can be important for certain
segments of the park visitor, such as those using the park for the day. Regardless of
the food type, products offered to park visitors should be supportive of the ecological
conservation and cultural preservation goals of the park.

Food is provided to the park visitor in four different structural formats:

1. Permanent: A stationary operation intended to serve the public for two or more
consecutive years (e.g. souvenir counter or popcorn stand);
2. Portable: A moveable structure designed to remain in one location for an
extended period, but which can be easily moved to another location when
necessary (e.g. a semi-permanent refreshment stand);
3. Mobile: A portable facility intended to move quickly and easily (e.g. a mobile ice
cream wagon); and,
4. Vending Machines: An unmanned facility that provides the park visitor with a
good upon insertion of money.

68

The permanent facility has the highest capital cost, production volume, and
ecological imprint. The mobile structure is easily moved to new locations where
customer demand is highest. Portable structures are useful when demand levels are
uncertain; and vending machines can provide specialized products at high use locales.

6.1 How can food facilities be managed by the park agency?

The park agency and concessionaire should work together to set clear, achievable
goals; these goals should be reached through quality standards, indicators for
measuring progress, regular monitoring and evaluation activities. The harmonization
of promotional efforts between the concessionaire and park agency is also important.
Quality standards should define expected quality levels for communication, products
and service, training, purchasing, environmental initiatives, and so on. Incentives can
be used by the park agency to encourage concessionaires to meet or exceed these
standards (e.g. reduced fees).

Indicators of progress in a food operation may include, but are not limited to, the
following:

Professional staff which are clearly identifiable, friendly, and courteous towards
visitors;
Building is clean (e.g. floors are swept, light fixtures are working);
Restroom supplies are available (e.g. soap, toilet paper, towels);
Food and drink processes are stated clearly on menu board; and,
Garbage and recycling containers are available and hygienic.

Monitoring activities should evaluate the performance of concessionaire personnel
and the overall business model. Staff working at the concessionaire should be
friendly, attentive to visitor needs, and not involved in activities such as drug use
(Yosemite, 2001). The New South Wales Government Environment and Heritage
(2011a) found that successful food concessions were the result of the personality of the
operator, their entrepreneurial skills, and their ability to work with the park agency;
negative attitudes towards the concession from the perspective of park agency staff
must also be dealt with effectively for a positive partnership (Thompson, 2009). Park
managers should regularly check the performance of concessionaire staff to ensure high
quality standards. Park managers should also ensure that the concessionaire is
69

training staff in health, safety, and general food preparation techniques. Staff may also
be required to wear a uniform, which can be obtained by managers under an
agency-wide contract.

Concessionaires often provide unique dining experiences, such as night dining in
the African bush (see Figure 21) or theme dining around local products. These
experiences can add diversity and depth to the visitor experience.

Evaluations of the concessionaires income should also be done by the park agency.
Park managers should regularly inspect all books and records made by the
concessionaire to ensure their compliance with the management contract. Upon
request, the concessionaire should also make staff available for inspection-related
interviews with the park agency. This monitoring work must have been outlined in
detail in the concession agreement.

Promotional activities undertaken by the food concessionaire must be in harmony
with the environmental and cultural status of the park. Promotional activities may
include web sites, advertisements, media releases, and so on. Legitimacy in
communication with the public is an important point for park agencies, especially
because they are acting as government agents. Many park agencies request that
concessionaires identify their official concessionaire status on any piece of
promotional literature. This signifies their authority to act as legitimate agents for the
park, and promises the public a certain level of service provision.

70

Figure 21. Bush Brai at Mopani Camp in Kruger National Park (South Africa). Private operators
often provide distinctive dining opportunities.

6.2 How can park managers monitor food concessions impacts on human
health?

Food concessions should be subjected to regular inspections by park managers.
These inspections should investigate hygiene standards and sanitation levels of the
food-provision facility. For example, poisonous compounds such as bleach and
detergent should be properly stored. Government agencies should also be privy to the
activities of the concessionaire; this may involve an evaluation of fire protection
measures (e.g. smoking restrictions) and procedures (e.g. provision of emergency phone
numbers to concessionaire staff). In all cases, proper Workplace Hazardous Materials
Information System (WHMIS) training should be provided to both park agency and
concessionaire staff to ensure their on-going safety.

71

6.3 Summary: What is involved in private food provision in parks?

The provision and management of food is a critically important component of the
tourism activity. It is part of the ritual and culture of many park visits (see Figure 22).

Hospitality training in colleges includes curriculum in most aspects of food and
beverage. However, the park management literature is surprisingly sparse in this
respect. The typical response has been for park management to largely ignore this
activity, or to turn it over to a contractor. Coburn (2011) and Swartman (2011)
analyzed the policies in 11 management plans from Ontario Provincial Parks. This
research found that polices in regards to food provision were either non-existent or at a
low level of detail, revealing the low level of emphasis on this issue in this park agency.

More recently, South African National Parks has been proactive in developing
policies to improve the provision of food services to the park visitors and to utilize food
provision as a funding mechanism for park management. Ontario Parks is
experimenting with hiring staff to undertake this work rather than using
concessionaires. More parks and park agencies should work to understand these
initiatives.

Figure 22. Preparing and eating food is an important part of the ritual of park use.
72

Chapter 7: Tourism Guiding Permits in Protected Areas

Although guides typically provide only a fraction of the total visitation experience,
the quality of this service is absolutely essential to the overall experience of the visitor.
Galapagos National Park requires all visitors to be accompanied by a licensed guide
while in the park (Narango and Rueda, pers. comm.). Guides should have an
understanding of and personal appreciation for the resource and local culture; they
should also be skilled at communicating this information to the visitors (see Figure 23).
This chapter will outline how park managers can identify the need for a guide, select
the best possible applicant, and monitor their daily activities based on their permit.
Outfitting and guide services are also different from interpretive services in the park,
and this distinction will be made clear.

Figure 23. Parks often require licensing for commercial tour operators within a park.

73

7.0 What are the different types of guides in protected areas?

There are three different forms of guiding which regularly take place in protected
areas: outfitting and guides, tour guides, and interpreters. Outfitting and guides
provide specialized backcountry outdoor recreation services which require specialized,
trained, and experienced individuals to accompany park visitors in the backcountry to
provide a safe and enjoyable experience (e.g. hunting, fishing, horseback riding,
camping etc.) (NPS, 1998). They are responsible for adhering to local laws, advising
visitors on applicable conservation and game laws, and reporting any violations to the
appropriate law enforcement officer (Memmel, 1963). Additionally, they must respect
the activities of park visitors, private landowners, public land management agencies,
and forest users.

Tour guides provide specialized interpretive tours to inform visitors in accurate and
compelling ways about the local environment and culture (Weiler & Davis, 1993).
Tour guides are also responsible for meeting visitor expectations (Cohen, 1985; Pond,
1993; Weiler & Ham, 1999). Examples of specific responsibilities include:
1. Teaching the visitors about the special features of the park;
2. Develop in the visitors an appreciation of the park;
3. Allow opportunities for respectful communication between locals and visiting
tourists;
4. Discourage tourists from collecting souvenirs from the natural area, unless
otherwise instructed by local authorities;
5. Discourage tourists from feeding wildlife;
6. Encourage visitors to catch and release fish and other games species, unless
otherwise directed by the local game management plan;
7. Discuss resource management activities and programs of the park agency
and/or local community; and,
8. Use local facilities in compliance with environmental regulations.
Lastly, there are interpreters. In many cases, interpreters and tour guides must
obtain a license from the park agency before providing services. Ontario Parks is one
example of an agency where licences are not required. The license is a certificate
issued to an individual or company by a government agency. The license can be
assigned to all people who meet minimum qualifications or a limited number of people
who have the highest level of qualifications. Consequently, interpreters with a license
provide the highest level of environmental, heritage, and cultural education to visitors.
74

Licenses may limit competition, increase guide wages, and encourage the hiring of local
employees. However, many developing countries do not require licenses in protected
areas (Tierney 1998). In these cases, park managers should carefully consider the need
for these expert providers and gradually introduce certification, registration, or
licensing systems (see Figure 24). Alternatively, the park agency can adopt a
self-regulated system when there are no legally enforceable measures to make the
industry comply (Ap & Wong 2000).

South Australian National Parks requires that anyone conducting tours in the
national parks for a fee must obtain a commercial tour operator licence. The licenses
are available from 2 months to 5 years. To obtain the licence the operator must comply
with requirements dealing with: staff training and accreditation, vehicle capability,
$10,000,000 in liability insurance, waste removal, fires and other issues (Government of
South Australia, 2012).

Figure 24. Park agencies often license private tour operators to ensure levels of competency.
75

7.1 How can park managers identify the need for a guide?
The park agency can determine the need for outfitters, tour guides, and interpreters
through a needs assessment (see Figure 25). This assessment should be done with full
consideration for prospective visitors, other agencies, other users, current companies
operating in the park, strength of new company applications, and broad-level trends in
recreation activities. In some cases, an unbiased and comprehensive needs assessment
may need to be done by an external agency hired for the purpose (Ziegler, 2011).
Ordinances mandating a period of public comment before finalizing the winning bidder
of long-term concession contracts are also valuable (Ziegler, 2011).

Figure 25. Factors influencing a needs assessment. Source: USDA Forest Service, Outfitting and
Guide Administrative Guidebook, 2000. Available at:
www.Fs.fed.us/recreation/permits/outfitting/guide
Park managers can conduct a needs assessment by ensuring that external
companies and park resources fulfill the six main categories of a needs assessment:
76

1. Coherency with park agency mission (e.g. protection of sensitive resources,
education of park visitors);
2. Potential contribution to the park and local communitys environment,
culture, and economy;
3. Current land uses and potential for expansion (i.e. how well can the parks
environmental resources handle this form of visitation?);
4. Social capacity of the park and surrounding communities (i.e. how does the
proposed guiding project change use levels of the park?), information
required for this decision includes current, historical, and future use levels;
5. Levels of supply and corresponding demand (i.e. is there a large demand for
guiding, interpretation, or outfitting from current park visitors?); and,
6. Input from multiple stakeholders (i.e. the needs assessment should be a
public process, involving comments from interested individuals, groups,
agencies, and licensing boards).
If a need is determined, the park agency must decide how the interpretation
functions are to be provided. Are they to be provided by park agency staff members,
by private operators or by specialized non-profit operators, such as Friends Groups?
Many of the larger parks utilize all three categories. For example, Yellowstone
National Park in the USA has park rangers who provide interpretive services (e.g.
guided hikes). The Yellowstone Association, an affiliated NGO, provides specialized
courses in the park, such as field seminars on ecological topics. In addition,
specialized licensed outfitters provide trips for horseback riding and fly fishing.

7.2 How can park managers select and manage applicants?

Guides, outfitters, and interpreters will generally provide the park agency with an
application stating their intent and qualifications. The initial application will generally
include the following information:

1. Applicant name, title, address, and phone number(s);
2. Applicant status (e.g. individual, corporation, etc.);
3. Detailed description of services to be provided;
4. Technical and financial capability;
5. Assurances of non-discrimination; and,
6. Other miscellaneous information (e.g. liability, expected income, etc.)
77

To select the best applicant, the park service should use the following evaluation
and selection criteria:
1. Qualifying business experience;
2. Knowledge of the area;
3. Proven education and interpretive abilities;
4. Ability to provide equipment;
5. Certifications received;
6. Proposed service concept;
7. Financial resources;
8. Knowledge of the subject;
9. Operating plan proposal;
10. Safety procedures;
11. Training attended; and,
12. References related to the above.

The permit or license for guiding will then be issued to the applicant, and details
relating to fees, training, and liability should be established. For example, permit
holders in the GBRMP must prove their demonstrated ability in protecting the resource,
providing interpretation, and contributing to positive park management (Thompson,
2009). Certified operators working in the GBRMP can be granted 15 year terms,
conditional on their continued fulfillment of the park agency assessment requirements
(Thompson, 2009). Remuneration for the guide will typically consist of a basic salary,
commission, and tips. However, there are also fees which are paid to the park agency
by the guiding concessionaire. These fees typically include the following four types:

1. Fees for commercial use: provides recipient with permit privileges and use of lands
in the protected area.
2. Assigned site fee: provides recipient with access to certain sites.
3. Grazing fee: provides the recipient with permission to graze livestock in the park.
4. Transfer fee: occurs when there is a change of ownership and a new authorization
is issued.

In the Alaska region, the NPS offers a Commercial Use Authorization (CUA) as a
method for guides to gain access to park resources. The CUA is a permit that
authorizes appropriate commercial services to park area visitors in limited
78

circumstances (NPS, 2012c). It is a flexible tool because it is limited to a 2-year period
and does not offer preferential right of renewal or similar provisions for renewal (Quinn,
1996; NPS, n.d.). It does not entail the establishment of fixed commercial facilities
within the park; services must originate and terminate outside the park, no money can
be exchanged within the park, and no commercial solicitation can occur on park lands
(NPS, 2012c).

The payment format and schedule for these CUA permits follow with typical
concession fees. The NPS asks the permit holders to pay an application and
administration fee (NPS, 2009). An application fee is the cost incurred by the park
service for mailing, distributing, and reviewing the initial application and is
non-refundable (NPS, 2009). The administrative fee is based on the cost of the decision
and approval of the CUA (NPS, 2009). These fees can range anywhere from US
$200-800, depending on the length of the CUA (1-2 years) or the number of parks
involved (1-6 parks) (NPS, 2009).

Other fees paid by permit holders within Alaskan NPS parks include a
management fee and a recreational use fee (NPS, 2009). The management fee is
charged by certain parks based on the costs incurred for monitoring, supporting, or
restoring/cleaning after the use (NPS, 2009). The methods for paying this fee vary: in
the Denali National Park and Preserve, the cost is US$100/year and must be provided
by January 1st of each year or paid along with their application (NPS, 2009). In the
Klondike Gold Rush National Historic Park, however, the fee is US$2/per person, per
day (NPS, 2009). The payment is due with Activity Reports and must be paid in two
scheduled submissions per year on August 15th and November 15th (NPS, 2009). This
fee is in addition to the basic fee schedule of the application and administrative fee. If
any of the above-mentioned fees are not paid in a timely fashion, interest of 3.25%
accrues for each 30-day period plus a US$5 administration fee (NPS, 2009).

Lastly, the recreational use fee is paid by permit holders operating in the Alaskan
region. This fee is used to deal with non-recurring maintenance, infrastructure repair,
and assistance provided to resource management (NPS, 2009). This fee applies to the
Brooks Camp Developed Area in Katmai National Park and Preserve which charges
US$8 per person, per night (NPS, 2009). It also applies to the Sitka National Historical
Parks Visitor Center and Russian Bishops House (NPS, 2009). The Sitka site charges a
$4 interpretive fee, which is payable upon entry into the park and not to be sent in with
the concessionaires application (NPS, 2009). The Russian Bishops House charges a
79

US$4 interpretive fee for tours through the house (NPS, 2009). Fees are not charged
during the winter season (NPS, 2009).

Training is another essential aspect of the managing of guide, outfitter, or
interpretive concessions within the park. A code of conduct should be established for
the guiding concession to adhere to, and guiding staff should be well-educated in
minimizing their negative impacts and skilled in enforcement (Weiler & Ham, 1999).
For example, the European Federation of Tourist Guide Associations (FEG) has a code
of conduct posted for those providing interpretive and/or guiding services (European
Federation of Tourist Guide Associations [FEG], 2009).

Training might be provided at the local or international level, may be structured,
and can use a variety of different teaching approaches. Ham (2002) stated that training
local people results in economic sustainability for communities living proximate to the
protected area. The three basic types of training include: 1) knowledge of cultural or
environmental products (e.g. local flora); 2) language training; and, 3) guiding skills (e.g.
interpersonal interaction, knowing the roles of the guide) (Ham & Weiler, 1999).

Finally, liability is an important management issue which must be reached upon a
mutual agreement by the park agency and outfitter. Liability insurance protects the
guiding staff, company, and park agency from liability for public damage, bodily injury,
or human death. When evaluating the necessary level of insurance coverage, the risk
associated with the activity and potential for injury or death must be considered. In
the United States Forest Service, the minimum amount of liability insurance coverage is
$100,000 for injury or death to one person, and $200,000 for injury or death to two or
more people. In the SANParks, guests brought into the park by the concessionaire are
the concessionaires responsibility (Fearnhead, 2007). Thus, SANParks is protected
from liability and the concessionaire is liable for all guest activity (Fearnhead, 2007).
Once the fees, training, and liability of the guiding concession have been established,
the park agency must regularly monitor their activities (See Figure 26).

80

Figure 26. Marine ecology guide at the Heron Island Resort in the Great Barrier Reef Marine Park
(Australia).

7.3 How can park managers monitor the activities of guides?

Guiding concessions frequently operate outside of park agency regulation, and may
not always adhere to expected levels of service and safety. Consequently, annual
monitoring should be conducted by the park agency or external auditor to ensure that
they are meeting the terms of the permit. This may include an evaluation of the
guiding concessions fees and income, training activities, and daily operations. In the
NPS, an annual evaluation of each concession operation is undertaken and annual
financial reports are submitted by the concessionaire (Thompson, 2009). With regards
to training, park managers might evaluate if the training program is meeting its stated
objectives and how it might change in future.

More generally, park managers must undertake an annual performance evaluation
of the guiding concession to determine if they are still meeting the details of their
permit. Performance evaluations can be formal and involve a rating of financial,
81

staffing, and other essential requirements. The process of the performance evaluation
includes:
1. Determine who will conduct the performance evaluation
a. May be done by: an authorized officer from the park agency, an outside
evaluator, or guide clients (i.e. mystery shopper method)
2. Identify issues to be addressed in the performance evaluation
a. May include: a review of the season, items needing improvement (as
suggested by concession or clients), and changes to the operating plan
3. Identify how the concession will be evaluated and rated (e.g. service to public,
compliance with permit conditions, level of safety, degree of resource protection,
etc.)
4. Restate how the permit might be suspended, revoked or terminated (e.g. failure
to exercise the privileges granted, occurrence of a negative events, etc.)
This chapter has identified how park managers can identify the need for a guide,
select the best possible applicant, and monitor their daily activities based on their
permit.

7.4 Summary: What are the benefits of interpretive services?

Interpretive services provide enriched experiences within parks (see Figure 27).
There are many approaches to providing these services. Over time as experience is
gained, park agencies tend to move from a laissez faire approach to the provision of
private interpretive services towards a more regulated approach. Issues such as
adherence to park policy, liability concerns, and quality issues move management to
require higher levels of training for the guides and adherence to quality standards and
insurance requirements.

82

Figure 27. Many parks use their own staff to provide education and interpretive services, as in
Yellowstone National Park (USA).

83

Chapter 8: Recommendations for Park Managers

This handbook provides practitioners in the field of parks and recreation
management with a practical guide for their daily management activities. Although
historically there have been tensions between park management and external providers,
these guidelines can assist in developing positive relationships in the future. Lessons
learned from practical examples throughout this guide have been applied to the
theoretical, underlying concepts found by scholars. Concepts covered in the guide
include how to select, manage, and monitor concessions operations generally and
within the retail, accommodation, food sales, transportation, and guide/outfitters.
There was also a discussion on the required qualifications of the concessionaire.

The handbook has been designed to be general in nature and useful in most
situations. However, the unique legal and political structure in each country will dictate
the modification of the comments in this handbook to the local situation (see Figure 28).

Figure 28. Naturum, the visitor center in Fulufjallets National Park (Sweden)

84

This guide has attempted to outline clearly the future needs for park managers
dealing with external operators. In future, park managers will have to consider
carefully the need for professionally-trained staff, transparent operations, and public
accountability. Concession contracts should be designed to be flexible and avoid
unbalanced power relations between the private and public sector. There is also the
need for coherent park agency policy to guide the provision of third-party services in
protected areas. Canada, New Zealand, Costa Rica, and Botswana have created more
concession contracts which focus on qualifications and legal/financial responsibilities
(Wyman et al., 2011). Lacking from the majority of contracts, however, is a focus on
human welfare and biodiversity (Wyman et al., 2011). Tourism concessions which
preserve environmental and social feature of local landscapes include Columbia, Costa
Rica, Botswana, and South Africa (Wyman, et al. 2011). However, it is questionable
whether or not these features, included in contracts, are acted out in practice (Wyman et
al., 2011). The most important thing for park managers to realize is thatin some
casesconcession contracts simply should not be granted. In these situations, the
negative implications will outweigh the positive ones.

In the research for this handbook the researchers were unable to gain access to park
contracts, leases and concession agreements from most park agencies. Therefore, it
was impossible to understand exactly what these contained. This led to the conclusion
that there is a major problem with transparency and therefore with accountability in the
field of concession contracts, leases, licenses, and permits in park management.

The private sector is known to be innovative. One example of this is the concept of
ecolodges, which provide many of the environmental features of parks, but provide
higher levels of tourism service quality (see Figure 29). Kwan, Eagles and Gebhardt
(2010) provide an example of the high levels of quality provided by ecolodges in Belize
in 41 different service variables. This research revealed that the traditional park has
competition for the ecotourist, making the management of third party providers that
much more important.
85

Figure 29. Sabi Sabi Private Game Reserve is adjacent to Kruger National Park (South Africa).
Private ecolodges outside parks are providing competition to parks due to their quality service
and facility levels, typically much higher quality than that found in parks.

One major implication from these guidelines is the complexity of this field. The
authors feel that every park agency should have a trained specialist in the issue of
outsourcing of visitor services. At parks with major visitor services, at least one staff
person should be designated for this purpose and be provided the appropriate training.
At Golden Gate National Recreation Area in the USA the park has 9 people in the
business office that deal with public private partnerships (Roth, pers. comm.). It
would be desirable if park-related academic institutions would provide the training to
enable individuals to be accredited in this important field.

Park agencies can also productively cooperate with other government agencies in
the contracting for visitor services. For example, a park agency might utilize the same
waste management company as adjacent towns or cities (See Figure 29).

86

Key issues to be considered in the field of concession contracts, leases, licenses, and
permits are outlined below.

1) It is essential to identify the goals of the initiative. All management actions will
flow from those goals.
2) Park agency staff must be familiar with the legal structure governing these
activities.
3) The activities occur within the overarching tourism planning policies for the
park and the park agency. It is desirable for the park management plan to
provide a policy structure for the permits, licenses, concessions, and leases.
4) There are many choices for providing visitor services in parks, including: park
agency staff members, non-governmental organizations, for-profit companies,
local governments, and local communities.
5) Parastatals have been established by some governments to give park agencies
the full legal ability to function like a tourism company, thus reducing the need
to use third party service providers. SANParks in South Africa is a successful
example of a parastatal.
6) There are many approaches for the use of third parties, including: permit,
licence, lease, and concession. There are many combinations of these that can
be used.
7) There are many ways to set public use fees, therefore pricing policies must be
considered upfront. Key issues include free market pricing or regulated
pricing.
8) There are alternatives for assigning charges to the contractor. A park agency
should have an overall policy in this regard, but be open to flexibility in
negotiation.
9) In areas of low visitor demand, flexibility and innovation is required, possibly
including subsidy to the contractor.
10) Some parks encourage the development of associated non-government
organizations, Friends Groups, to provide some tourism services.
11) It is possible for park agencies to take equity positions in the private companies
that provide the tourism services, as occurs in China.
12) It may be useful to require the contractors to be certificated in tourism. In the
SANParks, for example, this is a strict requirement (Fearnhead, 2007).
13) Capital expenditures by contractors will require longer term contracts. The
agency must have a policy in regards the value of capital improvements at the
end of the contract.
87

14) The park agency and the park must have the institutional capacity to effectively
manage the program. This includes sufficient staffing numbers with the
requisite business training.
15) There must be an overall accounting of the costs of the program. The costs of
the bidding procedures and the contract monitoring must be included.
16) It is useful to anticipate the issue of the movement of workers from one contract
to the next.
17) Monitoring of the contractors compliance with the contracts is essential.
18) Penalties for non-compliance must be built into any contract.
19) It is desirable from the public point of view to have high levels of transparency,
thereby assisting with accountability. This also reduces the potential for
corruption and self-serving actions within the concession-park relationship.

Figure 30. Algonquin Provincial Park works with local municipalities to share the contracting of the
collection of garbage and recyclables from park campgrounds.

88

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94

Glossary

Agreement: Agreements which do not include the essential aspects of a contract are not
enforceable by law; agreements should be limited to minor and simple transactions
(Memmel, 1963).

Asymmetric Information: A situation in the bidding and contract negotiation process in
which one party has more information about the transaction than another party (Lin,
2000).

Concession: A commercial operation governed by a private enterprise, non-government
organization (NGO), local government, or park agency employees; providing public
services such as accommodation, food and beverage, recreation, education, retail, and
interpretive services.

Concession contract: Legal agreement between a protected area agency and private
corporation, group, or individual; contains regulatory and contractual provisions to be
respected by both parties.

Concession manager: An employee or team of employees of the protected area agency
which possess the authority to administer and supervise concession contracts.

Contract: All valid, written documents designed for the purpose of entering two parties
into an agreement; can include agreements, leases, licenses, or permits (Memmel, 1963).

Contractual Incompleteness: A contract which does not fully account for all possibilities
within the contractual relationship between internal and external agency; most often
leads to renegotiation of the original contract (Guasch et al., 2006).

Concessionaire: An individual, organization, or a corporation that operates commercial
services for visitors in a protected area.

Franchise fee: Fee paid by the concessionaire to a protected area agency for the privilege
of conducting business in a park.
95

Gross receipts: Total amount of money collected by a concessionaire from a business
operation conducted in a protected area is known as the gross receipts.

Guiding: Provision of services or assistance for pecuniary remuneration or other gains;
may include services such as supervision, protection, education, training, packing,
touring, subsistence, or interpretation in pursuit of a natural resource-based outdoor
activity.

Incidental Business Permit (IBP): A simple written form of authorization that allows the
operation of a concession business near a protected area.

Insourcing: Requires that the park agency accept the responsibility and cost of directly
managing visitor and tourism services.

Interpretation: An educational activity aimed at educating visitors about the places they
visit and the things they see.

Law of concession: A statute giving permission for concession activities within protected
areas of public interest; can be grated to domestic and/or foreign persons,
organizations, and corporations, upon compliance with the country's law.

Lease: A contract whereby, for a consideration called rent, one party agrees to given
possession of premises to another; it must have five essential elements of contract,
exclusive possession, subordinate holding, revision in the landlord, and reservations of
rent (Memmel, 1963).

Major concession: A commercial operation where a concessionaire is authorized to
operate a business in a protected natural setting for a long period of time (e.g. 5 to 20
years).

Minor concession: A commercial operation authorized to provide services in a protected
area for a limited period of time (e.g. 1 to 5 years).

Outfitting and guide concession contract: Contract authorizing the provision of specialized
backcountry outdoor recreation guide services which require the employment of
specially trained and experienced guides.
96

Outsourcing: Brings the private sector (i.e. concessionaires) into the park, with the
assumption that it will operate more efficiently and provide high-quality, responsive
visitor services.

Parastatal: A corporation owned or wholly controlled by the government. SANParks is a
successful example of an operating parastatal (Fearnhead, 2007).

Percentage payment: Fee paid to the protected area agency by the concessionaire based
on gross revenues earned.

Performance bond: A fee submitted by the concessionaire to the park agency to cover any
costs incurred when they (the concessionaire) fail to carry out their expected duties;
covers both facility and operational costs (Wyman et al., 2011).

Prospectus: A written document created by a protected area agency to solicit and select
concession candidates for the operation of concession services in a protected area.

Reserve for replacement: Represents the cash paid by the operator into an account that can
only be used for ongoing capital maintenance costs within the park (Wyman et al.,
2011).

Right of First Refusal: Legal maneuver which allows incumbent concessioners the option
of matching the best bid by a potential entrant, thus eliminating the potential for an
improvement in the service provision (Chouinard, 2005).

Tendering: Mechanism for providing permits to applicants interested in facilitating the
required services for a park (Thompson, 2009).

97

Arowhon Lodge in Algonquin Park (Canada) operates according to the terms of
a land use lease.

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