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Section 3 - North Dakota Marketing

Agri-Tourism, presented by Sara Otte-Coleman, Director of Tourism; Fred Walker, International Marketing, North Dakota Department of Commerce (2007) – ND Tourism Website: http://www.ndtourism.com/industry/agritourism

What is Tourism?  

Tourism: Travel to enjoy recreational and leisure activities, partake in business, visiting friends and relatives and activities outside of one's normal working or living area.  Leisure Travel: A trip composed primarily for fun and recreation, including: visiting friends/relatives, touring, outdoor trips, special events, seasonal vacations, resorts and more. Business Travel: A trip composed of work related duties. Business/Pleasure Travel: A trip taken for business where the visitor also enjoyed the leisure activities.

What makes up the tourism industry? 480 + Hotels and lodging; 393 Campgrounds;  602 Attractions; 500 Events in 65 Communities; 3 National Park Areas; 63 National Wildlife Refuges; 14 State Parks; 56 State Historic Sites; 3 Scenic Byways; 115 Golf Courses.

Impact: How do we measure tourism?    
Economic Base – NDSU-
- $3.8 billion non-resident spending and ND’s second largest industry. TSA - Non-subjective tax data - Each visitor ads $81 to the gross state product; $368 million in taxes and $733 million in wages & salaries

Impact: How do we measure tourism?
US Travel Association - Domestic Travel Expenditures
- Comparative tax revenue data from all states; ND grew 23.3% since 2000 vs. national growth of 17%. Return on Investment - Advertising Campaign - $1 = $123 visitor dollars; - $1 = $7.65 taxes paid to state. Visitor Studies - Survey recent visitors on habits and spending; 14.9 million trips = $1.9 billion spent. Canadian Travel -Stats on Canadian visitor spending in ND; 1.1 million trips = $163 million

North Dakota Visitor Snapshot--The reason for traveling: Touring, outdoor activities and special events.
ND Domestic Travel Expenditures - Total = $1.9 Billion. Day trips 0.8 Million (44%); Overnight Trips; 1.1 billion (56%) - Visitor Spending per Over-Night Trip to ND-Transportation - $338; Food $250; Accommodations $241; Retail $137 = Total $1,048

North Dakota Visitors --Who are they? 64% are married; 54% Female; 41.4% years (average age); 52% income over $50,000.  Where do they come from? 37% come from a city over 250,000; MN, MT, CA, CO and WI; 33% travel 100-299 miles; 21% travel over 1,000 miles.  Marketing North Dakota to Visitors - Paid Advertising; Publications; Media Relations; Website; Social Networking and Personal Sales.

Trends in Tourism (USTA) - Deal not Destination; Close to home; urban dwellers want out; Shop travel on-line; Want to learn; Want bragging rights; Family travel.  Agri-Tourism - Merging North Dakota's top 2 industries which are: Agriculture + Tourism = Agri-Tourism and Edu-tainment = Perception –Reality.

Some activities around North Dakota – 1)You Pick - Patries Raspberries; 2) Working Cattle - Knife River Ranch; 3) Stomping Grapes - Red Trail Vineyards; 4) Combining Wheat - Neilson Farm; 5) Corn Maze; 6) Hike or bike Pastures - Black Butte Adventures; 7) Mike a cow - Moo Acres; 8) Putting up the Harvest - Schill Farm

How to get started? - --Think about partners (think package); --Build onto an event; --Reach out for marketing help.     Growing more than crops and cows --Minnesota has 200+Agri-tourism providers;  --Vermont Agri-tourism added $10.3 million farmers pockets; --Wyoming has 150+ guest ranches

North Dakota Leads the Nation in Ag Production - spring wheat, durum wheat, sunflowers, barley, dry edible beans, pinto beans, canola, flaxseed, dry edible peas, honey lentils, navy beans.....

LET’S SHOW THE WORLD HOW WE DO IT!

Demand for Ag Products --The demand for agriculture based products is worldwide.
--Even though "City Slickers" was a fictional movie, many of our guests are looking for that type of vacation.  
--North Dakota is in the Top 5 Destinations for Norwegian travelers and they are looking for outdoor, adventure, Wild West type products. 

Marketing 101: The Do's and Don'ts ---- The Do's - Take the FIRST Step: 1) Define your objectives; 2) Analyze your tourism product; 3) Identify your main selling points; 4) Analyze your economic environment; 5) Establish your rates; 6) Establish personal relationships; 7) Chambers & CVB's; 8) Potential Partners 9) Other ag related activities, motels, hotels, events; 10) Target your markets and learn about the ones you want to enter and 10, make it easy to create a package.     Don'ts:   1) Go unprepared into markets; 2) Enter markets without a long-term commitment; 3) Panic if nothing happens immediately; 4) Underestimate what you have to offer.

Pricing and Commissions: It is very expensive for a tour operator to put your product in a color brochure and to print and distribute sometimes hundreds of thousands of copies of that brochure. Commissions are how they make some money for marketing, distributing, and selling your product. The standard commissionable product in the market worldwide includes at least 20% for a tour operator. If the product is sold, the tour operator gets at least 10% of that, and the selling agent the remainder. The tour operator pays the agent.

Here is a formula for determining your net rate and pricing it for a tour operator. It is essential that the rack rate be the same rate being quoted domestically to consumers.   The $100.00 per night net rate is only an example figure.  Determine your Net Rate - this should include overhead, print, promotion and profit, and should be the lowest rate you can live with $100.00 per night. To add in a 25% commission, divide $100 by .75 $133.33 is your rack rate. Add local and state taxes for the total rate. Commissions should not be paid in tax.

Commission breakdowns vs. pricing methods:
Top Down Pricing
US Traveler Supplier - $100.00
US Receptive Operator - $70.00
International Tour Operator - &80.00
Travel Agent – $90.00
Customer - $100.00

Bottom Up Pricing
US Traveler Supplier ($55 break-even) - $60.00
US Receptive Operator - $70.00
International Tour Operator - $80.00
Travel Agent - $90.00
Customer - $XXX

Rack rate based on booking time, etc. Resources: North Dakota Tourism Grants
- http://www.ndtourism.com; North Dakota Tourism Marketing Programs; Travel Guide and Website listings 
- including partner access; Brochure Rack Programs; One fulfillment program; Travel & Trade show participation and lead share participation;
APUC    http://www.business.nd.gov/businessInformation/apuc/; Agriculture Marketing Resource Center  -http://www.agmrc.org


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