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New York State’s 1999 Agritourism Business Study

New York State’s 1999 Agritourism Business Study. Diane Kuehn SUNY ESF. What is an agritourism business?. A farm-based business that is open to visitors for recreational purposes. Some examples of recreational activities…. Tours Specialty products Production demonstrations

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New York State’s 1999 Agritourism Business Study

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  1. New York State’s 1999 Agritourism Business Study Diane Kuehn SUNY ESF

  2. What is an agritourism business? • A farm-based business that is open to visitors for recreational purposes.

  3. Some examples of recreational activities… • Tours • Specialty products • Production demonstrations • Hayrides & sleighrides • Petting zoos • Product tastings • Historic buildings • Exhibits

  4. Purposes of this study • To identify the profitability of agritourism for farm businesses in New York State. • To estimate the economic impact of agritourism on New York State. • To identify cost-effective business management and marketing strategies.

  5. Methods - Part I • Customer survey • 299 customers of 6 agritourism businesses across New York State

  6. Methods - Part II • Comprehensive mailing list • 2,416 farm-based businesses • Business owner survey • Random sample of 2,000 • Response rate of 38.8% (n=645) from qualified sample • Estimated 2,087 agritourism businesses

  7. Business owner questionnaire • Type of business & components • Income and expenses • Promotional strategies • Customer markets • Management strategies • Concerns • Future plans for business

  8. Percent of respondents by business type Farm stands 37% Christmas tree farms 12 U-pick operations 10 Maple products 9 Greenhouses & nurseries 9 Wineries 6 Livestock breeding/sales 5 Farm-based B&Bs 3 Others 9% n=645

  9. Percent of respondents by NYS tourism region 5.6% 7.9% 9.8% 27.0% 9.9% 9.6% 6.5% 7.3% 11.3% 5.0% <0.1% n=645

  10. Estimated income & profit of agritourism businesses • Total estimated gross income $210.87 million • Total estimated net profit $25.77 million • Average estimated net profit per business $12,347 n=399

  11. Business profitability Greenhouses & nurseries $25,669 Farm stands 15,221 U-pick operations 12,006 Other 11,479 Christmas tree farms 8,308 Maple products 7,074 Farm-based B&Bs 4,110 Wineries 3,604 Livestock breeding/sales $860 n=399

  12. Cost-effective Advertising Type Effectiveness Cost Word of mouth High None Direct mail High Moderate Sign High Moderate Brochure High Moderate Newsletter High High TV ad Moderate High Newspaper ad Moderate High Radio ad Moderate High

  13. Where do customers come from? County business is located in 58% Other NYS counties 30 Other states 9 Canada 2 Other countries 1% n=569

  14. Age of visitors Children 11% Teens 7 20-39 years 28 40-54 years 31 55+ 23% n=569

  15. Other visitor demographics • Group size 2-4 people • Length of stay Day trips (79%) • Gender Females (57%) Males (43%) n=267

  16. What do customers look for? What do customers look for? Friendliness of staff 71% Activities at farm 58 Farm animals 33 Barns/Historic buildings 32 Restaurant/Snack bar 24 Gift shop 16% n=267

  17. Top 5 activities customers would like to participate in Sampling local foods and produce 47% Wine tastings 44 Picking fruits and vegetables 43 Horseback riding 36 Going on a hayride 34% n=267

  18. Top 5 other activities customers participate in • Visiting parks • Attending festivals • Camping • Visiting historic sites • Fishing

  19. Top 5 Concerns of Responding Business Owners • Liability & liability insurance • Marketing, promotions, & advertising • Labor costs & other labor issues • Government regulations • Taxes n=492

  20. Liability • 84% indicated that liability is a concern n=614

  21. How respondents protect themselves from liability • Have liability insurance (90%) • Regularly make repairs (71%) • Add safety precautions (41%) • Risk analysis • Incorporate • Have visitors sign a disclaimer • Manage visitor behaviors

  22. During the next five years, owners plan to... Expand their business 64% Invest more funding in business 34 Hire more employees 21 Incorporate their business 8 Go out of business 7%

  23. Conclusions • Agritourism is useful for increasing the profitability of farm businesses. • Successful businesses... • utilize strategies to reduce costs • develop partnerships • have friendly staff • create unique recreational experiences

  24. Questions? www.nysgtourism.org

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