Developing Effective Marketing Strategies for Agritourism: Targeting Visitor Segments

Journal of Agribusiness 28,2 (Fall 2010): 111ԟ130 © 2010 Agricultural Economics Association of Georgia Developing Effective Marketing Strategies for Agritourism: Targeting Visitor Segments Martha Sullins, Drew Moxon, and Dawn Thilmany McFadden In Colorado, agritourism shows the potential to benefit agricultural producers and rural communities by generating additional income from consumers who are willing to pay for rural and agriculturally related experiences. This study uses a survey of Colorado agritourists to identify five distinct groups of visitors using demographics, attitudes, expenditures, and activity types. The visitor clusters are significantly different when considering types of travel planning and transportation, agritourism participation, and importance of agritourism to the travel party’s visit, among other behaviors. We conclude with a discussion of the marketing and joint planning implications for agritourism providers, the tourism industry, and Colorado communities. Key Words: agritourism, cluster analysis, consumer segmentation, marketing, regional economic development Agritourism is a recreational sector that appears to be gaining ground in terms of traveler awareness, media exposure, and adoption by agriculturalists looking for diversified income streams. Agritourism is defined as “a commercial enterprise at a working farm, ranch, or agricultural plant conducted for the enjoyment of visitors that generates supplemental income for the owner” (UC-Davis Small Farm Center, 1999, p. 3). Colorado’s agricultural communities, with their rich natural amenities, are particularly well-suited to growing this sector to the benefit of the greater state economy. Recent data prove these opportunities are, in fact, being recognized in Colorado. According to the 2007 Census of Agriculture, of those Colorado farms that offer agritourism products and services, the average farm went from earning less than $14,000 per year from agritourism and recreation in 2002 to over $48,000 per year from such activities in 2007 [U.S. Department of Agriculture (USDA), 2007]. The role of agritourism in generating income is recognized, but it is less clear how the sector is viewed by local tourism organizations or community leaders. —————————————— Martha Sullins is research associate, Drew Moxon is graduate research assistant, and Dawn Thilmany McFadden is professor, all with Colorado State University Extension and the Department of Agricultural and Resource Economics. The authors wish to acknowledge support for this study from the Colorado Department of Agriculture and the Colorado Agricultural Experiment Station. State funds for this project were matched with Federal funds under the Federal-State Marketing Improvement Program of the Agricultural Marketing Service, U.S. Department of Agriculture. Additional funding was provided under a Western Region Sustainable Agriculture Research and Education Professional Development Program grant. 112 Fall 2010 Journal of Agribusiness County-level officials, particularly in rural, farm-based counties, have begun to look at the economic impacts of agritourism. Veeck, Che, and Veeck (2006) suggest that beyond the obvious wage and employment benefits provided by agritourism, an expansion of the local tax base is also likely. Similar to the smoothing of revenue flows for farmers, the increased tax base could provide benefits for local governments during recessionary periods where tourists tend to favor lower- cost tourism activities such as agritourism over more costly travel. Although there is little research documenting agritourism’s exact role in tourism during economic downturns, Colorado Tourism Office (2010) data show that the numbers of overnight touring trips, country resort trips, special event trips, and day trips to and within Colorado all increased from 2008 to 2009 (a documented recessionary period), but total expenditures on such travel decreased over this same period, suggesting travelers chose lower-cost travel options. In fact, there are already recognized spillover effects in agricultural economies proximate to urban areas. In the northeast and Atlantic states, early recognition of the community economic benefits of agritourism has resulted in state-level support and promotion in the form of information networks and conferences on agritourism. For example, the state of New York’s Department of Agriculture and Markets published a guide in collaboration with AMTRAK to promote agritourism trips throughout the state. The New Jersey Department of Agriculture has developed a web site that consumers can use to search for agritourism products and events by location and activity. “HandgrownHomemade” is a collaboration among four North Carolina organizations, including the North Carolina Arts Council, North Carolina Cooperative Extension, HandMade in America, and Golden Leaf, to promote rural farm destinations across the state by creating trails and driving tours. Finally, Pennsylvania’s Center for Rural Pennsylvania published a 2006 study and guide on agritourism (online at http://www.rural.palegislature. us/agritourism2006.pdf ). In addition, tourism commissions are beginning to focus on agritourism as a relatively untapped sector of the market. McGehee (2007) examines the relationship between agritourism providers, tourism agencies (destination marketing organizations, or DMOs), and the agritourists themselves. She finds that DMOs can educate agritourism providers who are not accustomed to the tourism industry. She also reports that less than 10% of small farm families offering agritourism are using any type of regional DMO. As the relative impacts of agritourism continue to grow, the sector is likely to garner more attention from the broader tourism community. However, new resources will be invested and used effectively only if the sector can be defined and understood as well as other potentially competing sectors (e.g., skiing, camping, golf ). Perhaps some of the disconnect relates to the lack of understanding of the “who, why, and how” of agritourism. As a starting point to bridge this informational gap, we use a statistical cluster analysis applied to a 2006 survey of Colorado agritourists to identify five distinct groups of visitors who are then defined using demographics, attitudes, expenditures, and their reported types of agritourism activity. Sullins, Moxon, and McFadden Developing Marketing Strategies for Agritourism 113 The goals and intended outcomes of this cluster analysis are to provide more specific information on likely visitors to agritourism enterprises in Colorado as a means to help operators plan for and target appropriate visitors. If agritourism operators identify their intended customer base and use their business development resources in a more efficient manner, their operations and surrounding communities will benefit (e.g., marketing through channels already used by target customers or improving access to community activities that are appealing to those customers might encourage them to stay longer or increase their expenditures on agritourism activities). The remainder of the paper proceeds as follows. First, we discuss the background research that informed this study, followed by a summary of the data and methodology used. An overview of our findings is then provided, including the cluster analysis and tests for significance across groupings of travelers. The last two sections discuss the possible implications for agritourism businesses and rural communities in Colorado and other regions with similar characteristics, as well as future research directions. Background Research Colorado’s tourism industry as a whole grew over 20% from the early 1980s to the late 1990s (Wilson, Thilmany, and Sullins, 2006). More specifically, the authors note that recreational activities contributed 13% to farm income for producers in 2002, which had increased to nearly 18% as of the 2007 Census of Agriculture. Some of the growth may be driven by the amenities available on Western ranches and farms. In the broader Western region, Wilson, Thilmany, and Watson (2006) found that Conservation and Wetland Reserve Conservation programs have a positive relationship with recreational income in rural Western counties, but only when investments are made in sufficiently large tracts within those counties. As public lands open to hunting and fishing become more scarce and crowded, demand for these types of services on private land should continue to increase, especially since some private lands are managed specifically to improve habitat for small or large game hunting species. This dynamic is common to the Western United States. However, the Midwest and Eastern areas of the country have more limited public land resources for recreation; thus, there is already significant demand for private land access. Tchetchik, Fleischer, and Finkelshtain (2008) evaluated trends in the Israeli rural tourism market with regard to producers and the role government policy could play in encouraging synergy between agritourism and farming. They proceed to show that there are technological synergies on the supply side to support the argument for adding “rural tourism” services to the portfolio of traditional farm products and services. This type of additional income and productivity gain has represented a new opportunity for farmers to smooth revenue volatility caused by changes in market prices for their product. By offering a farm tour or providing 114 Fall 2010 Journal of Agribusiness lodging in

Load more