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Marketing Quality Rural Tourism

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Rural Tourism : the need for a product strategy

document type: article
keywords: tourism \ marketing \ development methods
source: LEADER technical dossier
last update:3/95

Despite the fact that tourism is a growth sector, mass tourism has run into a number of difficulties: tour operators are unable to satisfy demand among customers weary of over-crowded holiday resorts and keen to discover new regions and their inhabitants.
This is a high potential market slot for rural tourism provided that the products which it offers respond to the aspirations of this group of tourists.

1. The current situation: a shortage of rural tourism products

Despite the potential offered by the continuous growth in tourism in Europe (3% annual increase in tourist numbers in recent years), the range of rural tourism products on offer is still relatively limited.

* There is a lack of sophisticated tourism products, particularly in the South of Europe:

Apart from certain reservation networks for rural accommodation and hotels and holidays for low income families, no structured rural tourism is visible on the market (no rural tourism tour operators, no real catalogue of tourism products, apart from accommodation). In the majority of cases, the owners of tourist accommodation "wait for the customer", hoping that government promotion policies will bear fruit.

Structured supply of the leisure and cultural activities available is in its infancy. Tourism products on a specific theme, combining the stay with some kind of activity - the main market growth area - are only just beginning to be assembled.

* Rural tourism is of a markedly seasonal nature, reducing investment profitability. In France, the "Fédération Nationale des Gîtes Ruraux" registers an occupancy average of 15 weeks per year, with an average of 70% of capacity taken up during this period, giving an annual occupancy rate in the order of 20%.

As a consequence, rural tourism tends to be a low value added product.
Green tourism statistics in France are eloquent in this respect: rural tourism revenue represents 10% of domestic tourism consumption but 25% of the number of tourists. In other words, the product is invoiced at a price 2.5 times lower than holidays to other tourist destinations.
It is hardly surprising, then, that investors and company heads are not lining up for a stake in rural tourism.

This remark is probably valid for the majority of LEADER areas and efforts should be concentrated first and foremost on the creation of a structured range of tourism products, for there is no purpose in launching promotion policies in the absence of such products; this is rather like advertising a supermarket which has not stocked its shelves.

2. Market trends

Although mass tourism is genuinely in crisis, with the big tour operators experiencing a drop in the number of tourists going to the traditional centres of the tourist industry and especially the Mediterranean coast, specialists are not predicting a massive shift of tourists towards rural tourism. The tourist industry will maintain its market share and even increase this, by thinking up new products or revamping its old ones.

The crisis in mass tourism is more indicative of the inability of major package producers to reach sections of the market looking for a more customized holiday, away from the mass tourist resorts, where there is an opportunity to get to know the area and its inhabitants. This unstructured pool of customers makes up a large slice of the market, particularly in the South of Europe. But the range of products on offer does not yet match the volume level required, for products must meet a number of criteria making them impossible to standardise:

* desire for independence (small groups, driving around in your own car);

* search for a certain "style", authenticity, and not for the archetype welcome received in the hotel industry;

* attraction to holidays offering a "content", intellectual discovery and contact with local people;

* demand strongly orientated towards off-season tourism with short stays (Friday, Saturday, Sunday or maximum one week), preferably not too far away.

This is the customer and style slant, aiming at a highly personalised and traditional product, that rural areas must pursue. Some of them have already grasped this fact, as attested by the creation of the first chains of rural tourism products, either by public promotion bodies, associations or small and medium-sized tour operators whose numbers are growing in this sector. But these few successes cannot turn around the situation overnight; a great deal of effort is still required to make the most of this trend.

3. A rural tourism strategy

a. First of all, find the right niche. Do not repeat the mistakes of the traditional tourism industry, and aim at the "top of range".

Why "top of range"?

The current downward trend in sales of conventional package holidays does not provide a firm basis for a healthy tourism economy. With an average price of 400 ECU per week, full board (excluding travel) in the various catalogues for a typical countryside discovery holiday, the added value injected into the local economy is very low; in general, only accommodation and meals are provided, often negotiated at very low prices. These products are only profitable if sold in large quantities, achieving economies of scale, usually not the case in LEADER areas.

Rural tourism must firstly profile itself on the "top of the range" if it wants to generate additional income for the area and create jobs, and secondly target off-season activities, because this is the way in which optimal use can be made of the infrastructure and staff available.

What is meant by "top of range"?

In price terms, top of range is defined in relation to a standard price of 100 ECU/day full board (excluding travel). This price, to be feasible, must correspond to a specific service level differentiating it from a luxury product (whose high price level - minimum of 250 ECU/day - is justified primarily by the very high standards of hotel service offered and by high prestige destinations).

* "Top of range" must firstly consist of a product image more indicative of emotive experience than consumption;

* it is a customised tourism service which cannot be run in groups of more than 15 people;

* it is a product offering tourists a typical welcome and accommodation, where the decor, environment and culinary traditions are of primordial importance;

* it is a product where there is a high element of human input: the quality of this is the determinant feature of the product.

b. Structuring a varied product range

* Wide and flexible choice - The range of tourism products on offer must be broad and must span the very comprehensive package, sharply focused on a given theme, to more flexible products leaving the tourist more freedom of choice ("kit" products with choice of accommodation, reservation service, tailor-made activities and customised route design, etc.), not forgetting technical products such as company seminars or school trips. Top-range package products must be showcases for the promotion of the area, having a ratchet effect on individual quality tourism.

* A line within the product range offered must respond to customer diversity - Care must be taken to avoid too narrow a product focus: there is not just one type of customer or one growth market but segments of the market which each require an individual technical approach.

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