Income sources in Agritourism – is it worth the effort?
I would recommend that this business is treated as a separate SBU, to be able to access in the long term the investment, cost and income generated.
In most cases, an admission fee would be charged to allow access to an event, festival, tasting or interacting with animals. An admission fee depends though on the product offering.
A portion of these fees can go towards the farm crèche or visitors can make donations if the entity is registered as an NGO or NPO. Admission fees can also be scaled, for example, students, adults or children below the age of 12. There could also be a family fee or a group discount. Often the admission fee is used to offer a discount on a product that is available for sale, for example, the wine tasting fee might be waivered if the visitor bought bottles of wine.
Tour operators (inbound) prefer to have their tourists pay a fee that provides exclusive information or access to areas that are not generally open to the public. This fee is calculated differently depending on the audience and group size.
The sale of fresh, local farm produce offers the opportunity to pay retail prices for their purchase. It also provides the opportunity to sell excess produce that has been processed, for example, jams, as an add-on product that is not available anywhere else. More value-added products are often bought generally than fresh produce, because of the ease of transport. Remember to visit the government regulations regarding health and labelling standards for processed food.
Merchandising is another way to add income from allowing visits to the farm, for example, t-shirts or gifts/souvenirs.
If you have farm animals, another way of generating income could be charging for a certain activity, for example, R25 for supply a cupful of feed for the goats.
Educational tourism is on the increase because consumers want to know where there food comes from and international tourists want to learn about local farming practises. Frequently farmers from other countries organise tours to swop knowledge and network with South African farmers. A horse farm can offer training for first time horse purchasers or a dairy farm can teach visitors how to make cheese.
Farmers that grow unusual varieties, for example, heritage apples, may allow the public to taste this fruit. Tru-Cape and Oak Valley offer regular Heritage apple orchard tours and tastings.
Another way for farmers to earn tourism income, is to rent out cottages on the farm for accommodation purposes or historic buildings for weddings. It is advisable that for any conference/event type of activity to prepare a basic plan to access costs (including time) and income to be generated. Using an event co-ordinator or outsourcing the responsibility is sometimes the best option here, as these types of events tend to be capital (human and cost) intensive.
Organising farm markets on farmers where other local farmers participate as stand holders can be another way of earning income. Many farms charge fees for hosting equine events or cattle auctions.
Recently there has been a significant increase in the number of farm restaurants that have been opening, particularly in the wine regions, where selling wine together with a meal has become popular. However, a food offering does not need to be elaborate or require expensive investment. A Deli option that caters for picnics or a cheese platter with a wine tasting can also attract visitors.
Whatever your decision, my advice is to start slowly and with what your know.
The Farm Life