44 



retail service facilities at military bases around the world. They are 

 quite large. Concessioners include national chains such as McDon- 

 ald's, Popeye's, Pizza Hut, as well as numerous regional and local 

 operators. 



Under the standard terms of an AAFES contract, the conces- 

 sioner finances and develops the facility to include all construction, 

 equipment, and supplies. On completion of construction, the build- 

 ing and all fixed equipment then reverts to the government and be- 

 comes government property to be maintained over the course of the 

 lease term by the concessioner. 



The concessioner typically pays for all utilities, maintenance, and 

 repair. In addition, they will pay AAFES anywhere from 5 to 13 

 percent of sales based on market location and potential sales vol- 

 ume. Upon contract expiration, the facility becomes a property of 

 AAFES, the Federal Government in this case, at no cost. 



The terms for these leases range from 5 to 20 years depending 

 on the level of required capital investment. At the end of the con- 

 tract period, AAFES has been directed by Congress to readvertise 

 to all potential bidders with no credit given to the incumbent oper- 

 ators. AAFES has found this approach to be very successful and, 

 to the best of my knowledge, has never experienced a lack of inter- 

 est from private sector developers and operators. 



Our firm has encountered numerous other similar examples of 

 this tjrpe of contract arrangement. Providing a competitive conces- 

 sioner selection process, as well as reasonable returns for both the 

 government and the operator, are critical factors in the success of 

 these ventures. 



As I hope we have illustrated, we strongly believe that the pro- 

 posed legislation will significantly improve the operation and up- 

 keep of our parks by providing for increased competition and con- 

 cession contracts which are fair and equitable to private sector op- 

 erators, while ensuring the best possible return for the U.S. tax- 

 payers. Once again, we thank you for this opportunity, and we 

 would be pleased to answer any questions that you may have for 

 us. 



Mr. Hansen. Thank you very much, Mr. King. 



STATEMENT OF AUBREY KING, EXECUTIVE DIRECTOR, 

 TRAVEL AND TOURISM GOVERNMENT AFFAIRS COUNCIL 



Mr. King. Mr. Chairman, on behalf of the nation's travel and 

 tourism industry, I very much appreciate the opportunity to testify 

 before you today on the subject of reforming and improving the con- 

 cession system for the public lands. 



I am Aubrey King, Executive Director of the Travel and Tourism 

 Government Affairs Council and Senior Vice President of the Trav- 

 el Industry Association. The council is a coalition of 35 national or- 

 ganizations representing every segment of America's $416 billion 

 travel and tourism industry and its 6.2 million workers. I am here 

 today to testify in support of the bill that you have introduced, Mr. 

 Chairman, H.R. 2028, the Federal Land Management Agency Con- 

 cession Reform Act of 1995. 



Increasingly, States and local communities are turning to travel 

 and tourism to nourish their economies. Many of these States con- 

 tain national parks and other public lands which are major tourist 



