Explaining determinants of Agri-tourism income: evidence from Italy

Purpose - The purpose of this paper is to analyze the income sources of Italian farm tourism businesses, considering some economic, social and environmental variables that represent internal business factors and highlighting their contribution to the development of this income. Design/methodology/approach - The empirical analysis is based on the Italian section of the Farm Accountancy Data Network (FADN) that includes 365 Italian farm tourism businesses. FADN is an instrument to assess the income of European agricultural holdings and the impacts of the Common Agricultural Policy. The analysis has been carried out through a Multivariate Regression Model. Findings - The results of this paper have showed that some economic variables (food service, direct selling and public subsidies) determine an increase in farm income, whereas an increased number of family employees may have a negative impact on this income. Research limitations/implications - External factors, such as proximity to urban or cultural centres, may impact on agri-tourism income, but these are not considered in the statistical analyses. Another limit of this paper is the exclusion of tourists' motivational variables and others mostly referring to the market (pricing policies, promotional strategies, etc.). Furthermore, this paper focuses on a specific country and this could reduce the generalization of its results. Practical implications - Thanks to the selected regression drivers, farmers who offer tourism services could recognize a priori their entrepreneurial opportunities and understand the variables on which to focus to increase their income, which could be in turn strengthened by policies seeking to develop the endogenous potential. Social implications - Agri-tourism can fulfill various functions in the regional economy, with positive implications for the quality of life of rural societies. Originality/value - On the European level, there is currently a lack of research studying the variables affecting agri-tourism revenue and entrepreneurial choice that mostly define profitability. This may be the first time that FADN data set has been utilized for researching farm tourism businesses in Europe.