Developing an Agri-Tourism Operation in Ontario

Agdex#:	842
Publication Date:	May 2016
Order#:	16-029
Last Reviewed:	May 2016
History:	Replaces Factsheet 10-027
Written by:	J. Kelly, Direct Farm Marketing Program Lead, OMAFRA and reviewed by E. Pate, Acting Direct Farm Marketing Program Lead, OMAFRA

Table of Contents

1. Introduction
2. The Market
3. Do You Have What It Takes?
4. Strengths, Weaknesses, Opportunitites, and Threats - The SWOT Analysis
5. The Next Step - Marketing
6. Risky Business
7. Helpful Contacts/Resources

Introduction

Opening your farm gates to visitors involves shifting some of the focus of your operation from production to people. This shift involves innovation, business planning and, most of all, patience. Farm owners who have successfully integrated agri-tourism into their operations report that the transition has enhanced their lifestyle as well as their business.

Agri-tourism supports a growing desire by consumers to head outdoors and to the country for more leisure opportunities. The University of California's Small Farm Center defines agricultural tourism as "the act of visiting a working farm or any agricultural, horticultural or agribusiness operation for the purpose of enjoyment, education or personal involvement in the activities of the farm or operation." Agri-tourism is a subset of a larger recreational industry called rural tourism that includes visits to rural settings or rural environments to participate in or experience activities, events or attractions not readily available in urbanized areas.

The Market

Ranked by survey results, the major reasons to go on vacation include:

• To build and strengthen relationships - The number one reason for going on vacation is to be together as a family. Agri-tourism destinations are traditionally family-focused.
• To improve health and well-being - Travellers want to refresh and renew themselves by actively participating in outdoor activities. Agri-tourism venues promote authentic outdoor activities and events.
• To rest and relax - Agri-tourism operations, particularly farm vacations, offer an excellent non-urban, peaceful environment for rest and relaxation.
• To have an adventure - Many look to vacations for exciting experiences that stir emotions. Agri-tourism operations pride themselves on adventure and fun. This may include activities as challenging as running through intricate corn mazes to hiking through an on-farm enchanted forest.
• To escape - Many people travel to take a break from routines, worry and stress. They are looking for something different: a better climate, natural scenery, a slower pace of life, cleaner air, quieter surroundings and more.
• To learn - Learning and discovery are strong motivators for many of today's travellers. People travel to learn or practise a language, study a culture, explore gourmet foods or wines, investigate spirituality, discover something about themselves. They want to touch, feel or taste something unfamiliar and authentic. Agri-tourism is a key segment of the tourism market that can offer the majority of our urban population a glimpse into the unfamiliar.
• To reminisce - Many people travel to relive fond memories. In the case of agri-tourism, some vacationers, especially older travellers, will visit a farm to rekindle memories of the simple, rural lifestyle they remember from childhood. These vacationers pay money for food, lodging, transportation and souvenirs, but they are really buying a sentimental journey.

Do You Have What It Takes?

Developing a successful agri-tourism operation does not necessarily involve a huge investment in infrastructure or capital expenditures. In fact, many farm operators do not realize the agri-tourism potential their farm property holds. The first step is to assess your assets.

Physical Resources

Land: List what you have, including pasturelands, wood lots, cropland, wetlands, elevation, topography, etc. Check with your local municipality on what uses are permitted on the farm, based on the official plan and zoning by-law.

Climate: Consider weather patterns (rain, snow, humidity, wind) and temperature and how they may affect the types of activities you might provide.

Infrastructure: List what structures you could use - buildings, equipment, roads/trails, fences, commercial kitchen space, etc.

Other attractions: List those things already on your farm that might appeal to a visitor, such as wildlife, streams, ponds, fishing, livestock, proximity to natural or manmade points of interest, etc.

Operations and Management

Owner/manager strengths and goals: Owner/manager strengths and goals: List the intangible assets you have that can help you with a farm recreation operation, such as people skills, marketing ability, knowledge or skills such as maze building, livestock management, cooking, historical knowledge of the area, etc.

Family and staff strengths and resources: List any skills and strengths that family members or staff could add.

Activities

List activities you already do in your operation that might appeal to the public. Remember, what seems routine to you may be considered interesting to the non-farm public. Some examples might include on-site food production, machinery operations (including harvesting and planting), calving and/or lambing, trail rides and crop picking.

An advantage of agri-tourism is that there are so many potential customers. It is wise, however, to target the segments of the market that best suit your business goals:

• What kind of visitors do you want to attract?
• What kind of guests can you attract to your farm with the operation you have today?
• What kind of visitors will you be able to attract in the future

Identify your target market(s) by creating a profile of the customer you want to attract to your farm for both cultural and financial benefit:

• Who would you consider to be the ideal customer (families with young children, schoolchildren, etc.)?
• What characteristics do you want in your guests - independent types, action-oriented people, people looking for entertainment and activities, people seeking relaxation?
• Where do your preferred customers come from? (Ontario, out of province, out of Canada, urban, rural)?
• What are your customers' age groups - young, retired, variety?
• Are they single? Married?
• What is their income level?
• What is their party made up of?
• Do your customers include children?
• What are the hobbies/interests of your preferred customers?

The types of activities you can offer at your farm are many - you just have to use your imagination. Here are some suggestions:

• roadside stands and markets
• food activities - pick/cut/gather/grow/process your own
• farm activities - haying, threshing, plowing, fencing, sheep shearing, lambing, egg hatching
• bed and breakfast/farm vacations
• specialties - wine, cider, maple syrup, flowers, herbs
• animal feeding and petting areas
• seasonal festivals - fall harvest, Halloween, Christmas, spring, strawberry, sweet corn
• hay and/or sleigh rides
• hiking/scavenger hunts, Easter egg hunts
• birthday and corporate parties
• family reunions
• horseback riding
• photography/painting
• school tours and summer day camps
• cross-country skiing/snow shoeing/snowmobiling
• historical interpretation and re-enactments
• mazes, rock climbing
• wildlife viewing - birds, deer, etc.
• scarecrow-making, pumpkin carving/painting
• theatrical or puppet shows and musical events
• community charity events
• movie shoots
• farm dinners or culinary events
• classes - cooking, flower arranging, canning, etc.

Strengths, Weaknesses, Opportunities and Threats - The SWOT Analysis

Like any new business venture, the development of a comprehensive business plan is crucial. Conduct a "SWOT" analysis examining the Strengths, Weaknesses, Opportunities and Threats such a venture might present at your location. However, another priority is to ask yourself: Do I want to have the public on my farm? Do I like dealing directly with the consumer? Am I prepared to spend every weekend during peak season tied to the farm? Am I prepared to accept the liability of having traffic and people on my farm? In other words, with an agri-tourism business, your farm will no longer be your private sanctuary.

Here are some helpful tips if you are considering such a venture:

• Explore land use planning requirements in your municipality that may affect what you can do on your farm.
• Explore potential tax implications. Contact the Municipal Property Assessment Corporation (MPAC) for information about the impact that value-added or diversified uses can have on property assessment. Work with your farm business accountant to understand other potential tax implications with the Canada Revenue Agency. Find out the type and scope of liability insurance required for hosting the public on your property.
• Inform your neighbours of potential changes to your farm operation, discussing both impact and opportunities.
• Examine existing buildings and structures on your property to see if they are suitably located and conducive to the types of products and activities you will be offering to the public. Check with the local building department to see whether there might be Building Code implications with a change in use of a building.
• Check to see what limitations there may be on posting signage attracting customers to your property. Consult your municipality.
• Ensure safe and easy access to your property along with sufficient off-road parking. Consult your municipality.
• If you plan on people staying for long periods of time, provide sufficient and sanitary washroom facilities, including hand washing stations - particularly when people, food and animals are involved.
• If you plan to prepare and serve food on your premises, contact your local public health unit to ensure regulations are met.
• Provide safe and efficient on-farm transportation, if required.
• Have friendly, outgoing, well-trained and customer-focused employees.
• Adhere to labour laws and regulations to meet employment standards for staff.
• Visit existing agri-tourism destinations and reach out to operators and staff to get advice and learn from their experience.

The Next Step - Marketing

Now that you've done an assessment of your property, identified your target market and potential activities, and conducted a SWOT analysis, the next step is to ensure you properly market your agri-tourism enterprise. It is not always a case of "if you build it, they will come" - you have to have an effective marketing plan to attract customers and keep them coming back. Marketing can be as simple as word-of-mouth referral, or involve a regional, national or international media campaign. Direct your marketing style and message to your identified audience. Anything you print or place online must reflect these selling points in a neat, high-quality, tasteful presentation.

The Three Basics of Advertising

The message: Focus on two or three strong selling points and additional information about your products and services. You want to tell the customer about the type of activity or enterprise you offer, additional goods and services, directions to your location and costs of the activities. Try to be original in your marketing. Keep your message simple. You can refer people to a website or invite them to email or call for more details. Make certain the goods and services advertised represent what you can deliver.

The message that you convey through advertising and the day-to-day operations of your business should be reflective of your brand. Here are some (of many) definitions of brand to consider:

• Branding is the art of aligning what you want people to think about your company with what people actually do think about your company¹
• A brand is essentially a container for a customer's complete experience with the product or company²
• Branding is the representation of your organization as a personality³

The medium: Marketing includes a wide range of activities, from public relations and advertising, to promotions and trade shows. Paid advertising is the most expensive approach. Carefully consider all forms of media and focus on those that fit your budget, brand and reach your target audience. They may include billboards/road signs, brochures, co-operative ads, newsletters, magazines, newspapers, radio, website, television, trade journals, visitor's bureau, social media or word-of-mouth referrals.

The target audience: Which market segment(s) you wish to target will determine the type of advertising and the best media placement (medium that capture the attention of your target market segment).

How much you decide to spend on marketing will largely depend on the size and type of your operation, the medium you select and the number of times you repeat any advertisements. New operations typically spend 10%-25% of total operational costs on specific marketing efforts. Take the opportunity to question and survey customers about how they found out about your operation. Collecting this type of information enables you to measure success and fine-tune your advertising approach moving forward. With time and an established reputation, costs for marketing are usually reduced to below 5% of gross income from an agri-tourism enterprise.

The Importance of Public Relations

Public relations are defined as the creation and maintenance of a favourable image. It is part of marketing and advertising, but it goes further. As a landowner, you should always be concerned with your business image. Your public relations goals can range from clients' satisfaction with their experience, to acceptance of your operation by neighbours, local community leaders and the general public. It is also worth the effort to foster the support of neighbours, provincial and federal agencies, local police and law enforcement personnel, citizen groups and your local Chamber of Commerce or Visitors Bureau. Your online presence (website, social media, etc.) also contributes to your public image.

1. Jay Baer, Convince & Convert. Author, with Amber Naslund, of The Now Revolution
2. Sergio Zyman, Author of The End of Advertising As We Know It
3. Dave Kerpenn, Likeable Media. Author of Likeable Social Media

Many agri-tourism operations are within a two-hour drive of large urban areas (Toronto and Ottawa), which together represent about 75% of the province's population. This increased urbanization of Ontario's domestic market has resulted in consumers wanting to "experience" authentic outdoor farm activities.

The Importance of Relationship Marketing

Happy customers become loyal customers and become the key to long-term success: They will return, and they will tell their friends about your operation. Learn their names. Remember what they like and have it ready for them. Always ask your customers what they liked about their stay and what could be improved. The little touches make all the difference.

Develop a method for regular communication: This could take many forms including an email newsletter or developing a social media following. You may offer incentives (draws, contests, etc.) for customers that provide their contact information or engage with you on social media. Be sure to have permission, and follow regulations, when collecting and using email addresses.

Take care of details: Make sure that your telephone is answered professionally, emails are responded to quickly, your website is updated regularly and customer concerns or complaints are dealt with efficiently and effectively. Addressing concerns or complaints promptly is especially important on social media or other online platforms where other existing or prospective customers may view the critique.

Tell the community about your business: Join the local Chamber of Commerce, local food and/or tourist association. Talk to neighbouring farms, service stations, retail outlets, etc. Give other retailers your brochure and make sure that people in your area know about you. Start close to home, at first, and move out gradually. Remember, it is more important to complement than to compete with other local businesses that are also looking to attract visitors. Explore opportunities to promote collectively, such as local food or tourism trails or maps.

Send information about your company to relevant media: Send them news releases and story ideas. Invite them for a free visit/tour or an open house. You may reach out to media through mailings, emails, phone calls or social media. Think of things that would interest them (e.g., if you operate a pick-your-own strawberry farm, send the editor a basket of strawberries to promote that you are open for business)

Risky Business

Agri-tourism involving farm visits implies risks and potential liability to the farm owner should accidents occur. It is necessary, therefore, to develop sensible risk management strategies to minimize your liability exposure. Safety is your first priority when opening your farm gates to visitors. Your visitors' safety is largely your responsibility. See the OMAFRA Factsheet Managing Risk on Farms Open to the Public, available on the OMAFRA website at ontario.ca/agbusiness.

Helpful Contacts/Resources

Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA)

The Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA) has created a number of Factsheets and related information dealing with business planning and marketing found by searching ontario.ca/agbusiness.

Agri-tourism adds value to your existing farm operation. For more information, see the Beyond Production Agriculture business information bundle and the Direct Farm Marketing business resources also found by searching ontario.ca/agbusiness.

Ontario Farm Fresh Marketing Association (OFFMA)

If you want to learn from other farmers who have successfully opened their gates to the public, the Ontario Farm Fresh Marketing Association (OFFMA) has over 300 members ranging from modest pick-your-own farms to elaborate entertainment farms attracting thousands of visitors annually. OFFMA offers its members training and resources to assist in their marketing efforts. Workshops focus on current issues and opportunities within the industry.

Tel: 905-841-9278
Email: info@ontariofarmfresh.com
Website: www.ontariofarmfresh.com

Farm Management Canada

See the publication Cultivating Agri-Tourism - Tools and Techniques for Building Success

Website: www.fmc-gac.com/publications/cultivating-agritourism-tools-techniques-building-success

North American Farmers' Direct Marketing Association (NAFDMA)

Conferences, international farm tours, workshops and related publications offered through NAFDMA provide members with the opportunity to network on the profitability of direct marketing.

Website: www.nafdma.com