New York State’s 1999 New York State’s 1999 Agritourism Business Agritourism Business StudyStudy

Diane KuehnDiane KuehnSUNY ESFSUNY ESF

A farm-based business that is open to A farm-based business that is open to visitors for recreational purposes.visitors for recreational purposes.

What is an agritourism What is an agritourism business?business?

ToursTours Specialty products Specialty products Production demonstrationsProduction demonstrations Hayrides & sleighridesHayrides & sleighrides Petting zoosPetting zoos Product tastingsProduct tastings Historic buildingsHistoric buildings ExhibitsExhibits

Some examples of Some examples of recreational activities…recreational activities…

To identify the profitability of To identify the profitability of agritourism for farm businesses in New agritourism for farm businesses in New York State.York State.

To estimate the economic impact of To estimate the economic impact of agritourism on New York State.agritourism on New York State.

To identify cost-effective business To identify cost-effective business management and marketing strategies.management and marketing strategies.

Purposes of this Purposes of this studystudy

Customer survey Customer survey – 299 customers of 6 299 customers of 6

agritourism businesses across agritourism businesses across New York StateNew York State

Methods - Part IMethods - Part I

Comprehensive mailing list Comprehensive mailing list – 2,416 farm-based businesses2,416 farm-based businesses

Business owner survey Business owner survey – Random sample of 2,000Random sample of 2,000– Response rate of 38.8% (n=645) from Response rate of 38.8% (n=645) from

qualified samplequalified sample– Estimated 2,087 agritourism businessesEstimated 2,087 agritourism businesses

Methods - Part IIMethods - Part II

Type of business & componentsType of business & components Income and expensesIncome and expenses Promotional strategies Promotional strategies Customer marketsCustomer markets Management strategiesManagement strategies ConcernsConcerns Future plans for businessFuture plans for business

Business owner Business owner questionnairequestionnaire

n=645

Percent of respondents Percent of respondents by business typeby business typeFarm standsFarm stands 37%37%Christmas tree farmsChristmas tree farms 1212U-pick operationsU-pick operations 1010Maple productsMaple products 99Greenhouses & nurseriesGreenhouses & nurseries 99WineriesWineries 66Livestock breeding/salesLivestock breeding/sales 55Farm-based B&BsFarm-based B&Bs 33OthersOthers 9%9%

9.8%

6.5%

27.0%

5.6%

7.3%11.3%

7.9%

9.9%

9.6%

5.0%<0.1%n=645

Percent of respondents Percent of respondents by by NYS tourism regionNYS tourism region

Total estimated gross income Total estimated gross income $210.87 million$210.87 million

Total estimated net profit Total estimated net profit $25.77 million$25.77 million

Average estimated net profit Average estimated net profit per businessper business$12,347$12,347

n=399

Estimated income & Estimated income & profit of agritourism profit of agritourism businessesbusinesses

Business profitabilityBusiness profitability

n=399

Greenhouses & nurseriesGreenhouses & nurseries $25,669$25,669Farm standsFarm stands 15,22115,221U-pick operationsU-pick operations 12,00612,006OtherOther 11,47911,479Christmas tree farmsChristmas tree farms 8,3088,308Maple productsMaple products 7,0747,074Farm-based B&BsFarm-based B&Bs 4,1104,110WineriesWineries 3,6043,604Livestock breeding/salesLivestock breeding/sales $860$860

Cost-effective AdvertisingCost-effective AdvertisingTypeType EffectivenessEffectiveness CostCostWord of mouthWord of mouth High High NoneNoneDirect mailDirect mail HighHigh ModerateModerateSignSign HighHigh ModerateModerateBrochureBrochure HighHigh ModerateModerateNewsletterNewsletter HighHigh HighHighTV adTV ad ModerateModerate HighHighNewspaper adNewspaper ad ModerateModerate HighHighRadio adRadio ad Moderate Moderate HighHigh

n=569

Where do customers Where do customers come from?come from?County business is located inCounty business is located in 58%58%Other NYS countiesOther NYS counties 3030Other statesOther states 99CanadaCanada 22Other countriesOther countries 1%1%

ChildrenChildren 11%11%TeensTeens 7720-39 years20-39 years 282840-54 years40-54 years 313155+55+ 23%23%

Age of visitorsAge of visitors

n=569

Group sizeGroup size 2-4 people2-4 people

Length of stayLength of stay Day trips (79%)Day trips (79%)

GenderGender Females (57%)Females (57%)Males (43%)Males (43%)

Other visitor demographicsOther visitor demographics

n=267

What do customers What do customers look for?look for?Friendliness of staffFriendliness of staff 71%71%Activities at farmActivities at farm 5858Farm animalsFarm animals 3333Barns/Historic buildingsBarns/Historic buildings 3232Restaurant/Snack barRestaurant/Snack bar 2424Gift shopGift shop 16%16%

n=267

What do customers look for?What do customers look for?

n=267

Top 5 activities Top 5 activities customers would like to customers would like to participate inparticipate inSampling local foods and produceSampling local foods and produce

47%47%Wine tastingsWine tastings 4444Picking fruits and vegetablesPicking fruits and vegetables 4343Horseback ridingHorseback riding 3636Going on a hayrideGoing on a hayride 34%34%

1.1. Visiting parksVisiting parks2.2. Attending festivalsAttending festivals3.3. CampingCamping4.4. Visiting historic sitesVisiting historic sites5.5. FishingFishing

Top 5 other activities Top 5 other activities customers participate customers participate inin

1.1. Liability & liability insuranceLiability & liability insurance2.2. Marketing, promotions, & Marketing, promotions, &

advertisingadvertising3.3. Labor costs & other labor issuesLabor costs & other labor issues4.4. Government regulationsGovernment regulations5.5. TaxesTaxes

n=492

Top 5 Concerns of Top 5 Concerns of Responding Business Responding Business OwnersOwners

84% indicated 84% indicated that liability is a that liability is a concernconcern

n=614

LiabilityLiability

Have liability insurance (90%)Have liability insurance (90%) Regularly make repairs (71%)Regularly make repairs (71%) Add safety precautions (41%)Add safety precautions (41%) Risk analysisRisk analysis IncorporateIncorporate Have visitors sign a disclaimerHave visitors sign a disclaimer Manage visitor behaviorsManage visitor behaviors

How respondents protect How respondents protect themselves from liabilitythemselves from liability

Expand their businessExpand their business 64%64%Invest more funding in business Invest more funding in business 3434Hire more employees Hire more employees 2121Incorporate their business Incorporate their business 88Go out of business Go out of business 7%7%

During the next five During the next five years, owners plan to...years, owners plan to...

Agritourism is useful for increasing Agritourism is useful for increasing the profitability of farm businesses.the profitability of farm businesses.

Successful businesses...Successful businesses...– utilize strategies to reduce costsutilize strategies to reduce costs– develop partnerships develop partnerships – have friendly staffhave friendly staff– create unique recreational experiencescreate unique recreational experiences

ConclusionsConclusions

Questions?

www.nysgtourism.org