Colorado-based Xanterra Travel Collection poised to take over Feb. 1 if Game, Fish and Parks Commission approves the deal this week.
The South Dakota Game, Fish and Parks Commission meets Thursday and plans to finalize a contract between Custer State Park and Xanterra Travel Collection, a move that commissioners said will help the park keep up with growing visitor expectations.
Concessionaires are private companies that contract with the state to offer services that parks don't provide, such as food, lodging and retail.
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Xanterra is a national concessionaire, based in Colorado. It has contracts with some of the nation's largest national parks including Yellowstone National Park, Glacier National Park and nearby Mount Rushmore National Memorial.
In the commission's Sept. 10 and 11 meeting, commission Chair Stephanie Rissler said the needs and expectations of Custer State Park visitors are growing.
"This concessionaire needs to be able to take us to the next level and meet those needs," she said at the time. "We're not talking about what the park looks like today. We're talking about where Custer State Park needs to be in the next 10, 15 and 20 years."
Annual visitation at Custer State Park grew steadily from fewer than 1.9 million visitors in 2015 to more than 2.3 million in 2025.
Outside Magazine listed the park as the No. 1 in its list of the 18 best state parks in the U.S. Paste Magazine ranked it as one of the top five off-the-grid state parks that deserve national attention.
News Watch made a request to South Dakota Game, Fish and Parks for comment but did not hear back before time of publication. Rissler said she could not comment because of Thursday's pending meeting.
U.S. Hotel and Resort Management, a wholly owned subsidiary of Ramkota Companies Inc., has been the Custer State Park concessionaire for 20 years. Ramkota is a Sioux Falls-based company that operates 11 properties around South Dakota, including in Rapid City, Aberdeen and Pierre.
U.S. Hotel and Resort first signed a 10-year contract with Custer State Park in 2007, which was then renewed for two more five-year contracts.
Josh Schmaltz, the CEO of Ramkota whose office is at the State Game Lodge in Custer State Park, said the decision to go with Xanterra caught him off guard and he’s “obviously very disappointed.”
"I have been here since day one when we took over as the concessionaire 20 years ago," he said. "I could have been in Sioux Falls. We have three hotels in Rapid City that I could have officed out of, but this is where I wanted to be."
"Evidently my proposal – I was not able to articulate well enough what we've accomplished and what our vision is for the future. You know, I feel that we did share a very good vision," Schmaltz said.
Rissler said in the September commission meeting that she believes the department and evaluation team fairly looked at all proposals before deciding which company to go with.
"They (U.S. Hotel and Resort) have built a strong foundation, but as a commission, we have to look to the future, and I hope that we can come out of this feeling content," Rissler said.
Commissioner Julie Bartling said in the September meeting that the decision is not a criticism of the past but a thank you for what's been done.
"I'm just generally appreciative of all that they've (U.S. Hotel and Resort) done, and I look forward to what's out there for Custer State Park," Bartling said.
State law requires in-state preference 'if all things are equal'
Four concessionaires competed for the contract: Xanterra, U.S. Hotel and Resort, LIV Hospitality and ExplorUS. In the end, Xanterra, the largest of the four companies, won the bid.
South Dakota has a law on the books that says preference should be given to South Dakota businesses or qualified agencies when awarding a contract "if all things are equal, including the price and quality of the supplies or services."
Because the request for proposals are not public, it's not clear what Xanterra's offer includes.
Schmaltz said his team stays local as much as it can, working with Custer and surrounding businesses regularly.
“Any time that we can go local, we are 100% local. We're a homegrown South Dakota company. We are 100% ESOP (Employee Stock Ownership Plan) with South Dakota employees,” Schmaltz said. “I mean, it all stays here.”
"This is something that was always very personal to us. I'm a West River, South Dakota, raised, from Harding County. All of the other three people on my team. There was Aberdeen, Parkston, Yankton. I mean, these are all South Dakota people. It wasn't just a business. It wasn't just a business opportunity. It was something that we have just been a part of for so long, and I'm very proud of what we've been able to do. Unfortunately, it didn't go our way."
The selection process
Sean Blanchette, business administrator for the GFP division of parks and recreation, outlined the selection process in the Sept. 10 GFP commission meeting.
The current contract ends Jan. 31. The commission started preparing for the request for proposal a year ago, Blanchette said.
The draft contract was written over the winter months in preparation to issue a prospectus. The prospectus was issued on March 10, and it expired on June 5.
Here were the requirements of the prospectus, as outlined by Blanchette:
- Maintain and provide all the current required amenities and services at the four resort complexes in Custer State Park: State Game Lodge, Legion Lake Lodge, Bluebell Lodge and Sylvan Lake Lodge
- Minimum franchise fee of 19.6%, which is the minimum annual fee that the concessionaire must pay to Custer State Park to operate on the premises
- A 5.5% component renewal reserve, which is money the concessionaire will reserve to help maintain facilities over the term
- Finally, a minimum 3.4% personal property reserve to improve and upgrade the personal property that the concessionaire will use
Also within the prospectus, companies were asked to respond to five different selection factors. These were questions on how each company would approach facility maintenance, visitor experience, operational experience, financial capabilities and each company's proposed franchise fee.
Blanchette said all four companies’ proposals met the criteria and requirements as outlined in the prospectus.
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Written proposals and interviews were reviewed by 12 staff from GFP. It involved three commissioners on the selection committee, as well as representation from the Department of Tourism.
"The team was deliberately selected to provide subject matter expertise, as well as oversight and objectivity, transparency and sure integrity into the process," Blanchette said.
On Aug. 10 and 11, a smaller team oversaw the interview process held in Sioux Falls. All four companies received four hours to present and interview. CHM Government Services, which guided the selection team and process, attended as non-voting members during the interviews.
Blanchette announced that the selection committee selected the proposal submitted by Xanterra Parks and Resorts to be the next concessionaire at Custer State Park at the September meeting.
Molly Wetsch
The selection was then approved by the commission. Contractual negotiations have been held with Xanterra, and a final contractual document is expected during Thursday's commission meeting.
Schmaltz acknowledged that there is always risk in the business as everything is on a contractual basis. He said some decisions made at Custer State Park didn't "make sense" financially for the business, but they made them anyway.
"If it made the park better, there really wasn't any discussion. We just did it. As I look back, I can can be very proud of the things that we did."
"It's a little hard right now to know that the things that we've done, we don't get to enjoy them from a business standpoint. But again, nonetheless, we can be very proud of what we did," Schmaltz said.
South Dakota News Watch is an independent nonprofit. Read, subscribe for free and donate at sdnewswatch.org. Contact reporter Emily DeCock: 605-736-4396/ emily.decock@sdnewswatch.org.
