How Does Privatization Help Keep Parks Open?

Generally, private operators are more efficient than the government in the park operations.  In part, this is because these companies have focused their whole business model on park operations, so they have developed proven processes for park management.  In part, this is because a private work force tends to be less expensive and more flexible than civil servants.  Just as one would not hire a Fortune 500 CEO to do one’s web design, park employees with masters in environmental science are not ideal for manning gate houses and cleaning bathrooms.  Perhaps more importantly, civil servants typically are paid all year long, even when the park is not very busy or is closed.  In contrast, concessionaires have identified a large pool of workers who are flexible and actually are looking for seasonal work.

Using these efficiencies, private operators take on public parks that are typically losing money for the government (ie require a subsidy to operate from the general revenue fund) and convert them to a financial asset, generating cash for the government in the form of rent payments will still serving the public.  For example, our company proposed taking over six Arizona state parks that were losing over $700,000 a year.

Perhaps most important, privatizing the operation of parks takes them off the government budget, and makes them immune from being pawns in government budget battles.  Typically, threatened park closures are used as leverage by government officials to increase taxes in tough times, since the public nearly always reacts very negatively to such threats.  Under private management, the parks are no longer dependent on money from general revenues, and so no longer fall victim to such budget battles.  In the 1990’s, when a disagreement between President Clinton and the Republican Congress shut down the government, the only federal parks open were those operated by private concessionaires.

To learn more, see this article on a better model for making state parks financially sustainable.