The enigmatic travel

It might come as a surprise to you that the same company that owns Windstar Cruises also manages Old Faithful Lodge in Yellowstone National Park.

And that both are in a portfolio that’s the direct descendant of the Fred Harvey Co., which created the first national restaurant chain.

And that its owner, Philip Anschutz, a media-shy billionaire, also owns the Coachella Valley Music and Arts Festival.

Even the name — Xanterra — requires a bit of explanation.

Perhaps that’s the best place to start. “Xanterra” is a mashup of Xanadu, the paradisiacal setting for Samuel Taylor Coleridge’s poem “Kubla Khan,” and terra, which means “earth” in Latin. “We bring people to the beautiful places on Earth,” explained CEO Andy Todd.

That’s the connective tissue, Todd said, in an otherwise diverse travel portfolio that includes walking tours, bike-and-barge excursions and a railroad.

The bulk of Xanterra’s revenue, however, comes from national park concessions. In addition to Yellowstone, Xanterra holds the primary lodging and other concessions in Grand Canyon, Rocky Mountain, Mount Rushmore, Zion, Glacier and Crater Lake national parks. (It has similar arrangements in four Ohio state parks.)

While Xanterra’s holdings play host to 2.5 million overnight guests per year, the brand collects revenue from 20 million park visitors annually: the thirsty hiker ordering a Lone Walker Ale at Glacier’s Lake McDonald Lodge, a soccer mom shopping for Black Hills gold jewelry at the Dakota Marketplace, a pierced-and-tattooed millennial ordering an elk-and-pork-jalapeno-cheddar bratwurst at the Desert Dog Food Truck on the South Rim of the Grand Canyon.

Park concessionaires are required to provide overnight options for every budget — Xanterra runs campgrounds as well as iconic park lodges — but chief marketing officer Betsy O’Rourke said that, parks aside, Xanterra offerings are “definitely upscale.”

Earlier this year, the company changed its name from Xanterra Parks and Resorts to Xanterra Travel Collection to add focus to its nonpark assets, which don’t have the competitive advantages that exclusive, 20-year park concessions offer.

In addition to Windstar Cruises, the Collection includes:

• VBT Bicycling and Walking Vacations, with itineraries on six continents as well as products that combine cycling with riverboats, barges and three-mast schooners.

• Country Walkers, offering guided and self-guided hikes throughout the world.

• Holiday Vacations, a somewhat traditional tour operator focusing on air-inclusive departures around the globe.

• Grand Canyon Railway & Hotel, in Williams, Ariz., which offers accommodations and daytrips to the canyon in refurbished, 1923 Pullman cars, 1950s-era coaches or modern, first-class carriages. In winter, it also offers evening “Polar Express” trips, Santa inclusive.

• Oasis at Death Valley, comprising the recently refurbished, 91-year-old Inn at Death Valley, the family- and group-friendly Ranch at Death Valley and Furnace Creek Golf Course (at 241 feet below sea level, the world’s lowest).

Fred Harvey was a 19th century entrepreneur whose place in tourism — particularly the development of tourism in the West — was so well known into the mid-20th century that a song from the 1946 film musical “The Harvey Girls,” based on the women who worked at his restaurants, won an Academy Award.

The film had an A-list cast, with Judy Garland, Cyd Charisse and Angela Lansbury. It also featured the Oscar-winning song, “On the Atchison, Topeka and the Santa Fe,” which offers a clue to his commercial genius: He built restaurants — Harvey Houses — along railroad lines that were expanding westward.

He subsequently built hotels, offered tours and generally made it more comfortable for a wealthier class of tourist to explore the Wild West.

His empire, though diminished as automobiles reduced the importance of rail, remained with his family through the mid-1960s and was acquired in 1968 by Hawaii-based Amfac, which rose on sugar plantation money early in the 20th century and later diversified into tourism with the King Kamehameha Hotel on Hawaii Island.

It, in turn, was acquired by JMB Realty in 1988, where current Xanterra CEO Todd worked as senior vice president of portfolio management. He was appointed CEO of Amfac tourism interests in 1994, the same year it acquired what is now the Oasis at Death Valley. In 2002, the name was changed from Amfac Parks and Resorts to Xanterra Parks and Resorts.

Current owner Anschutz became interested in hospitality in 1972, when he was involved in building the Park Hyatt Hotel in Denver. By the time he bought Xanterra in 2008, he was also deeply involved in the development of L.A. Live, including its Ritz-Carlton and JW Marriott. Subsequent to purchasing Xanterra, he acquired two classic hotels, the Broadmoor in Colorado Springs, Colo., and the Sea Island Hotel just off the Georgia coast, though they have not been added to the Xanterra collection.

But other properties he acquired, among them VBT, Country Walkers (from Tui) and Holiday Vacations, have become part of the group, as have the Cedar Creek Lodge outside Glacier National Park and the Grand Hotel in Tusayan, outside Grand Canyon National Park. A concession for Glacier was added to the park portfolio under Anschutz, and the Grand Canyon and Yellowstone concessions were renewed.

Xanterra bought Windstar from bankrupt Ambassadors International in 2011 and has seen significant investment since, with the purchase of three Star-class ships from Seabourn in 2013. A month ago, it was announced that those ships — the Star Breeze, Star Legend and Star Pride — will, one by one, be lengthened over the 13 months from October 2019 to November 2020. Stretching will increase the capacity of each ship from 212 to 312 passengers at a cost of $267,000 per passenger berth.

To better compete for luxury guests, each ship will combine existing suites to create two Owner’s Suites with three bedrooms and two balconies each. Retail space and two dining locations will be added, and the fitness centers and spa will be enlarged. A barbecue area will sprout adjacent to the top-deck Star Bar, and the Veranda restaurant will be expanded. Swimming pools, too, will be reconfigured and enlarged as well as being elevated to offer better views.

Although the ships will be lengthened by 84 feet, the line said they’ll still be small enough to access ports that larger ships cannot, an important differentiator for the brand.

Beyond the benefits of its profitability, Windstar is strategically important as Xanterra moves aggressively to cross-sell within its customer base.

“We currently see around 25% of our guests going to two or more brands within the portfolio,” O’Rourke said. “We hope to grow that.”

Xanterra is not done with acquisitions, and Todd hinted it still has a significant war chest.

“We didn’t know we were going to own a cruise line, but we bought one,” he said. “The new business guys will say to me, ‘What’re we looking for?’ and I say, ‘It can be anything.’ We could buy more ships. We could buy more adventure travel companies. We could buy more hotels. We could do more national park concessions. We’re always looking for new deals, but they have to make sense, have the right people, the right values and be something we’re interested in operating,”

Or, he said, “we could just grow organically.”

Asked if Xanterra would start a brand from scratch, Todd sounded less enthusiastic.

“I mean, we could,” he said. “Quite frankly, I don’t know what that would be. We’re mainly scouting additional assets and businesses similar to what we have all the time. But there are really no barriers. I remember one time we were looking at an airline company that had a lot of helicopter and aircraft tours. We look at anything that is tourism and travel related that we think we can be successful at.”

O’Rourke said she believes the rebrand to Xanterra Travel Collection will particularly help with travel advisers.

“There are synergies across the brands, and [advisers may have clients] who might take a bike trip one year, a Windstar Cruise the next and Yellowstone the following year because they are active travelers.”

Currently, marketing efforts are focused primarily in the U.S., but certain brands attract international guests.

“More than 50% of our guests at the Oasis [at Death Valley] are international,” O’Rourke said. “But it varies park by park. Windstar is growing its international guests, primarily in English-speaking countries, but we definitely see an opportunity for more international growth.”

Twelve days ago, Anschutz presided over the official grand reopening of the Oasis at Death Valley, following a $100 million overhaul of the AAA Four Diamond, 66-room Inn at Death Valley and the 244-room Ranch at Death Valley. (Along with the renovations, “Death Valley” replaced “Furnace Creek” in the names of both properties.)

The complex, which is within the park boundaries, is an anomaly in the sense that Xanterra owns, rather than manages, the assets, having acquired them in 1994, before Death Valley was elevated from national monument to national park.

The inn had been gutted except for a few walls that had been built with local rock. The resulting redesign could be described with an oxymoron: re-created authenticity. It now appears both as a property that opened in 1927 and a property with all new fixtures, carpeting and hardware.

Additionally, 22 casitas were added to the grounds to provide additional rooms adjacent to the main building and, across the road, an outdoor event space, Mission Gardens, was created.

The outbuildings within the footprint of the nearby ranch complex were replaced with a restaurant, a saloon and a shop. Guestrooms at the ranch will be renovated over the coming 12 months.

Present for the reopening was a guest who may be the Oasis’ (and Xanterra’s) biggest fan, figuratively and possibly literally: three-time collegiate basketball player of the year, 1974’s No. 1 NBA draft pick, 1978’s MVP and multiple-year all-star center, 6-foot-11 Bill Walton, who was active with the Portland Trail Blazers, San Diego/Los Angeles Clippers and the Boston Celtics until 1987. He has been a guest at the inn every year for the past 17 years.

“The first time, my wife, Lori, and I stayed for four days,” Walton said. “Before we left, we booked our next stay for two weeks. And before we left that, we booked our next stay for a month, and every year after that we’ve stayed for a month.”

A typical day, he said, might involve a 55-mile bike ride, a swim in the aquifer-fed pool and then a “five-star meal” at the Inn’s restaurant.

Speaking from the Inn the day after the reopening, he could only describe the renovation in superlatives.

“It has always been an incredible place, but now it’s spectacular — spectacular everything,” Walton said. “A phenomenal upgrade. Over the top. Paradise has become beyond perfect.”

He continued, “Wait until you see what they’ve done. This is really, really cool, and the quality of the workmanship, the attention to detail, the creativity that went into the new structures, the casitas, the redoing of the spa. The will to fight to keep all the historical touches. They’ve kept what attaches to our memories but stimulates dreams for tomorrow. It makes me so very, very happy.”

Walton said he has stayed at other Xanterra lodges and sees consistency across the brand.

“When I go to a Xanterra property, I know I’m going to get quality, authenticity, historic integrity, innovative use of natural surroundings, commitment to renewable energy, commitment to sustainable lifestyle, all the things that I believe in, that I try to stand for and live every single day. And they’re right here.”

In many ways, the Oasis at Death Valley reflects not only the broadening ambitions of Xanterra but also provides a bit of insight into owner Anschutz, who carefully guards his privacy.
The first clue to the man behind Xanterra is the art in the Inn. He personally selected each piece from his collection, thought to be one of the largest assemblages of Western and cowboy paintings and statuary in the world.

Anschutz’s interest in the West runs deep. Currently a Denver resident, he developed his fortune in the oil fields of Wyoming and was attracted to Xanterra in part because he enjoys outdoor recreation. Corporate meetings sometime include hikes or biking in the parks.

At the Oasis festivities two weeks ago, he signed copies of the second in a series of “Out Where the West Begins” (Cloud Camp Press, 2015 and 2017), books he authored to combine his passions for the American West, business and history. The first two volumes are subtitled “Profiles, Visions and Strategies of Early Western Business Leaders” and “Creating and Civilizing the American West.”

Anschutz’s interest in history also manifests itself in a desire to protect the historical structures of which Xanterra is custodian, Todd said. “He loves to preserve old buildings, old assets. And he’s willing to invest the capital to do it. Obviously, we want fair economic returns on our investment, but we look for ways that make economic sense and also allow us to preserve and expand an asset.”

Anschutz was attracted to Xanterra because of its sustainability and environmental efforts, Todd said.

“He admired them and has adopted a lot of our best practices into [his other] businesses,” he said. “One of our big core values is legendary hospitality but a softer footprint. We realize we’re operating in the most unique environments, so sustainability and environmental protection is truly a big deal for us.”

Commitment and expertise in sustainable practices has also become table stakes to win park concessions. Todd said that recent Xanterra bids for concessions in Rocky Mountain National Park and Mount Rushmore included commitments to build solar panels to cover part of the energy needs.

“Many of our employees, especially in the national parks, are very much environmentalists,” Todd said. “When they see that we actually walk the talk, it’s an attractive tool in recruiting.”

The Oasis, O’Rourke said, is “a water-neutral project, and we supply over 50% of the energy there through a solar panel field. We try to use local materials to minimize transportation and have strict rules on packaging for retail products. It goes all the way through our supply chain.”

O’Rourke, who previously worked for Wyndham, added, “When you’re operating in a national park, it’s different than a hotel. We already have 100% brand awareness, globally. So, it’s really about stewardship.”

The stewardship extends to providing park staff, many of them seasonal, with a sense of community.

“We have 2,500 employees at Yellowstone,” Todd said, “and we not only have to provide living quarters and meals but also a way of life. Social activities. It’s definitely different than in our freestanding hotels.”

He added that another human resources challenge that varies from typical hospitality companies involves hiring and training a workforce that varies from 8,000 in high season to 4,000 off-season.

“In Yellowstone, you can go from 500 to 2,500 in a matter of weeks. Some staff come in on visas from other countries to work for the summer. You’re opening and closing facilities nonstop.”

Invested in more ways than one

Anschutz Corp. is highly diversified, with holdings in energy, real estate, sports teams, media, movies, theaters, arenas and music. Xanterra is not one of its largest holdings, but Todd said it’s nonetheless one of the assets in which Anschutz takes a hands-on approach.
“He’s very involved and cares very much about the travel and leisure business,” Todd said. “We meet on a regular basis. He provides capital for us to grow, but he also provides vision. And that vision, I think, comes from a deep passion for the parks themselves and a strong desire to improve the guest experience. He can relate to it.”