The economic side of agrotourism: business performance and competitive factors

Agrotourism is often numbered among the promising diversification strategies in agriculture. At the same time, the competitive situation and performance drivers are quite unknown. Research often concentrates on the reasons for the decision for this form of diversification or the drivers of agrotourism development in general. Surveys on the impact of different (potential) driving factors on the business performance of agrotourism firms are lacking to a large extent. Based upon a case study in North Rhine-Westphalia (ger) the present study focuses this gap and aims at measuring the competitive situation at firm level and at explaining the business performance via different internal and external factors (n = 48). So, it could be shown that agrotourism is quite a competitive market segment. Significant and most important drivers of performance are investments in the past 20 years, presence and implementation of strategic management such as regular target monitoring and the adaptation of supply to specific target groups, furthermore marketing expressed in the annual marketing budget and in the use of quality marks. In addition, the quality of operations, the relative location to core resources and the active participation in networks foster business performance. Interestingly (and in contrast to hypotheses in literature), motivations of business owners have no bearing with performance issues. Moreover, typical governmental acts such as subsidies or building law restrictions neither foster nor hamper the competitive situation at a significant level. Thus, policy implications of this study in particular relate to a promotion of individual resources, especially management skills, of business owners. Research desiderata mainly refer to a larger sample size.