Insights from Colorado’s Agritourism Producers

1. Insights from Colorado’s Agritourism Producers

2. Place-Based Innovation: An Integrated Approach to Agritourism Development in the Western US Sarah Low (USDA-ERS) Diane Gaede (University of Northern Colorado) Penny Leff, Shermain Hardesty & Marcella Valentine (University of California at Davis) Dawn Thilmany, Rebecca Hill, Martha Sullins & Anders Van Sandt(Colorado State University) Funding of this research project by USDA/AFRI Project #2014-68006-21842 is gratefully acknowledged.

3. Project Overview: Research, Instruction, Outreach • Multi-faceted research approach • Spatial analysis • Traveler survey-travel cost, traveler behavior, choice set for attribute valuation • Producer survey-operator characteristics, personal, business and community-level opportunities and constraints • Instruction • Two undergraduate courses (UNC) • Three, 2-credit graduate courses-hosted at CSU • Outreach and engagement • Community-based case studies • Website and fact sheets (http://agritourism.localfoodeconomics.com/) • Workshops

4. Agritourism business development in the US • Agritourism revenues continue to grow (US Census of Ag 2002, 2007, 2012) • More than doubled from 2002-2007 to nearly $628M • Increased by 12% from 2007-2012 to $704M • Number of farms with agritourism have increased overall • Increased by 18% from 2002-2012 to 33,161 • In 2012 ave. revenues per farm = $21,230, decreased by nearly $27,000 in 2007 • Our 2015 operator survey looks at profitability and entrepreneurship in agritourism in CO (and CA)

5. Leveraging your strength as a business Leveraging Your Strengths How can you take advantage of your community’s location & resources? Community What personal & family business attributes, crops, livestock, and market channels can you take advantage of? What is the demand, by travelers, for agritourism activities in your region? Successful Agritourism Ag Operation Agritourism Demand

6. Who is involved in agritourism in CO?

7. Quick facts about CO agritourism businesses • Responses from 141 listed AT owners in 2015 • Nearly 71% who responded were still in business • Average age of AT business: 18 years (median=12 ½) • Oldest AT business: 90 years (c. 1925) • Open 171 days/yr on average (median=150) • 8 open more than 360 days/yr • Welcomed average of 4,600 visitors per year, or 33 visitors/day of operation: • Wide range from 10-40,000 total • 60% of visitors were local; 21% out of state & only 3% international

8. Income from ag & agritourism Percent of operations • 50% had more than $100,000 in sales from ag (7%>$1M) • 40% had revenue from AT exceeding $100,000 • More than 1/3 made less than $1,000 in annual profit from AT

9. Whatdid we learn about agritourism operators and their businesses? • Three levels of business profitability: • <$1,000 per year (35%) • $1,000-$9,999 per year (33%) • >=$10,000 per year (32%) • Age of operator and education level were not important indicators of profitability • CO operators’ average age was 55; • Most had 2- or 4-year college degrees

10. What about: motivations choice of enterprise level of investment in agritourism operation community assets

11. Motivations for developing and operating an agritourism business Mid-range to low profitability 2 Most profitable 1 2 Highest responses of most profitable businesses

12. Most AT businesses relied on direct sales (Percent of businesses reporting sales)

13. Most profitable businesses have more diverse visitor base Percent of visitors Profitability category

14. Expenses vary widely by type of agritourism business Average annual expenses per visitor = $153

15. Of $153 invested per visitor, agritourism operators spent more than 1/3 on labor • Per visitor, highest profit businesses are spending: • $105 on labor • $34 on supplies • $34 on capital investments • $13 on marketing

16. Challenges to CO agritourism businesses(=group ranked highest)

17. Defining success in agritourism Success 

18. Community resources contributing to success • Other useful resources agritourism operators reported: • Schools • Forest Service • Partnering with local businesses • Recreation District • Farmers market

19. Looking to the future… • Expand or diversify agritourism operation: 70% of higher profit businesses compared to 52% of lowest profit category • Invest in buildings or equipment for agritourism: 70% of higher profit businesses compared to 32% of lowest profit category • Hire more employees: 52% of higher profit businesses compared to 24% of lowest profit category • Make no changes: 24% of lowest profit businesses, compared to 17% of higher profit category

20. What do our findings mean? • Diversification within an agritourism business is important (think resiliency)! • Develop local resources, turn challenges into assets • Recognize stages of agritourism business development; not all businesses need the same type of support

22. Matching producer perceptions to visitor behavior - the case of trip planning What producers thought was effective: • 96% word of mouth • 85% web site • 73% referrals from other businesses • 70% feature story • 67% social media • 63% sign outside business • 58% direct mail/email • 42% Trip Advisor, boosted posts What consumers did: • 44% used word of mouth • 42% used web site • 8% used referrals • 12% read feature story • 23% social media • 11% used sign outside business • 10% direct mail/email • 18% Trip Advisor