Developing Rural Tourism Businesses

Alan Barefield

Southern Rural Development Center

alanb@srdc.msstate.edu

(662) 325-3207

Kathy Tweeten

North Dakota State University

ktweeten@ndsuext.nodak.edu

(701) 328-9718

What is tourism?

The practice of traveling for recreation. The guidance or management of tourists as a

business or governmental function. The economic activities associated

with and dependent on tourists.

Webster’s Dictionary

What isRural Tourism?

Rural Tourism Opportunities

• Hunting Services (Leasing & Guiding)

Rural Tourism Opportunities

• Hunting Services (Leasing & Guiding)

• Fee Fishing & Guide Services

Rural Tourism Opportunities

• Hunting Services (Leasing & Guiding)

• Fee Fishing & Guide Services

• Cabin Rentals

Rural Tourism Opportunities

• Hunting Services (Leasing & Guiding)

• Fee Fishing & Guide Services

• Cabin Rentals

• Bed & Breakfasts

Rural Tourism Opportunities

• Hunting Services (Leasing & Guiding)

• Fee Fishing & Guide Services

• Cabin Rentals

• Bed & Breakfasts

• Horseback Riding

Rural Tourism Opportunities

• Hunting Services (Leasing & Guiding)

• Fee Fishing & Guide Services

• Cabin Rentals

• Bed & Breakfasts

• Horseback Riding

• Kayaking, Rafting, & Tubing

Rural Tourism Opportunities

• Hunting Services (Leasing & Guiding)

• Fee Fishing & Guide Services

• Cabin Rentals

• Bed & Breakfasts

• Horseback Riding

• Kayaking, Rafting, & Tubing

• Off-road Biking

Rural Tourism Opportunities

• Hunting Services (Leasing & Guiding)• Fee Fishing & Guide Services• Cabin Rentals• Bed & Breakfasts• Horseback Riding• Kayaking, Rafting, & Tubing• Off-road Biking• Festivals

Rural Tourism Opportunities

• Hunting Services (Leasing & Guiding)• Fee Fishing & Guide Services• Cabin Rentals• Bed & Breakfasts• Horseback Riding• Kayaking, Rafting, & Tubing• Off-road Biking• Festivals• Museums

Rural Tourism Opportunities

• Hunting Services (Leasing & Guiding)• Fee Fishing & Guide Services• Cabin Rentals• Bed & Breakfasts• Horseback Riding• Kayaking, Rafting, & Tubing• Off-road Biking• Festivals• Museums• Corn Mazes

Problem AreasTo Address

• Lack of destination attraction in rural areas– Why would people come to your area to

visit?– Is there anything to keep them there?

– This could be a perfect opportunity to

COOPERATE!

Problem AreasTo Address

• Lack of marketing expertise– There are many agencies, organizations,

and associations devoted to tourism– Many of these services are free– Contact the state department of tourism

Problem AreasTo Address

• Undercapitalization– Tourism businesses typically have a long

startup period– Profit margins are usually thin (especially

in the startup period)– Occupancy or attendance rates are the key

Problem AreasTo Address

• Lack of customer identification– Your market is probably not the world– What is the target group?

• Families• Singles• Seniors• Youth• Men• Women

Marketing Considerations

• Determine the set of attractions that will make tourists stop or preferably stay in your area

Marketing Considerations

• Determine your niche in this set– What product or service would you like to

produce that other people would want to buy?– Who will buy this product or service?– Develop a business plan to determine the

feasibility of this enterprise– The first step in the business plan is the

marketing study

Marketing Considerations

• What is the targeted market?– How big is it?– What factors influence this market?– Is the market growing or declining?– What market share do you want to capture?– How does your business relate to the market?

• Will your business grow as the market grows?• Will your business decline as the market declines?

Marketing Considerations

• Describe the competition– Who are your five closest competitors?

• The competitors for a bed & breakfast are not other bed & breakfasts

– What are the SWOTs of these competitors?• Strengths Weaknesses• Opportunities Threats

– How is your business different from the competitors?– How is it better?

SweetwaterValley Farm

Smoky Mountain Ham

Fee Fishing& Guide Services

Bird Watching

Retention and Expansion of Agri-tourism Businesses

opportunityisnowhere• Attitude

• Assess resources– Human– Financial– Natural

• Visit a like business

• Study the market

• Determine the feasibility

Big Business!!!• North Dakota - $63.2 million increase in

visitor spending in 2003

• Second largest industry

• $4.0 million in sales tax revenue (03)

• Growth continues!!!!

Customer Profile

• Millenial 8%

• Generation X 22%

• Baby Boom 39%

• Swing & WWII (Matures)

• Boomers -independentspend more moneytravel further

Trends• Novelty and change

• Simplify life

• Group tours decreasing

• Family vacations

• Educational travel

• Remote areas

• Home state travel

Trends Con’t.• Exercise and outdoor activity

• Back to nature

• Wildlife-related

• Create memories

Fastest Growing Land-Based

• Bird watching

• Hiking

• Backpacking

• Primitive Camping

• Walking • Snowmobiling (fastest growing)

Salary or wages29.6

Farm or ranch26.5

Outdoor recreation-related business14.8

Other Business10.6

Retirement/Invst. Income6.9

North Dakota Outdoor Recreation-relatedBusinesses, Income Characteristics, 2003

Do You Know What This Is?

Nesson Valley Gardens to ……

….Thunderbird Ranch Gourmet Foods

Key to Success

Plan with the end in mind.

Community College Connection

• Technical assistance – Planning– Taxes– Legal structure– Feasibility analysis– Marketing – plan and tools– Best practices– Web page development

• Local advocate and supporter• Conducting a BR&E Visitation Survey