(A.W)—Armenia gained its independence from the Soviet Union 19 years ago this year. Since then, the country has made great strides in attracting tourists to the country, but the tourism industry still has room for growth. The World Travel and Tourism Council reports that the tourism industry represents 9.2 percent of the world’s gross domestic product and employs 235 million people. Given more investment and entrepreneurial insight, agritourism is one untapped opportunity within the industry in Armenia.
About half a million Diasporan Armenians visit Armenia each year, but the tourism products and services offered are largely limited to religious sites and destinations like Lake Sevan. Even native Armenians are leaving the country for their holidays. Armenia’s Ministry of Economy 2009 Report stated that 516,000 people traveled to other countries in 2008 for tourism, which is more than a 10 percent increase from a year earlier.
Most tourists to Armenia are basing their stays in Yerevan. An Armenian international visitor survey from September 2006-August 2007 found that Yerevan had the highest percentage of tourist nights at nearly 65 percent, followed by the Shirak region at 9.5 percent (repeat visits to the 1988 earthquake zone may account for that number). All other tourist locations had less than five percent each of the tourist night distribution, with Syunik region at the bottom of the list with just over one percent.
The agricultural industry around the world has changed markedly in the past few decades, challenged by constant restructuring, and Armenia is no exception to this trend. Global trade agreements and low priced imports make it difficult for small farmers to compete with specialty wholesale fruit, vegetables, maple syrup, and honey, as well as commodity crops, no matter the quality of the operation.
Consumer concerns about the safety of industrial food production disrupt other aspects of the global marketplace, while rising input costs threaten the sustainability of many farms. Livestock and avian diseases have caused a reduction in demand for meat and poultry exports. Meanwhile, rural people often have limited options for change and eroding small farm incomes.
Agritourism has been key to augmenting agricultural economies around the world. It has been an important part of rural development in Europe. Within the European Union’s 1992 and 1996 Common Agricultural Policy, agritourism was identified as a key strategy to diversify agricultural economies impacted by cost-price squeezes and was supported by structural adjustment funding.
The practice of agritourism was developed step by step in Taiwan. The first step was recognizing the de facto agritourism that existed at produce stands along main roads where invitations for farm visits were extended on an informal basis. The first pick-your-own policies were created in 1982 with the Pick-Your-Own (PYO) Farm Project, which included accreditation of PYO farms, along with subsidies from the government to invest in construction and maintenance of tourist facilities.
According to the Agricultural Marketing Resource Center in Iowa, the benefits of agritourism are varied and numerous. It helps to sustain a rural way of life, provides a way toward economic growth, offers additional income for farmers and local people, keeps family farmers on the farm, contributes to the tax base for local and national levels of government, and gives farmers an opportunity to sell their products directly to customers and make more profit. All of these have helped small European farms deal with falling prices for commodities for years.
Agritourism plays a role in the diversification of tourism activities, while contributing to the nation’s bottom line. A 2008 study from the Journal of Sustainable Tourism about food tourism in Cornwall, England, indicated “that 42% of tourists look for local specialties with ‘local identity’” and that nearly 70 percent of vacationers are prepared to spend more on products that have a local identity.
Neighbors and consumers of agritourism operations benefit from high-value local/regional foods, guest rooms and farm stays, job creation, and branded regions for wine, cheese, and fruit, and cuisine. Nearby tourism-related firms and amenities benefit from increased revenues, communities gain more income-based taxes, and the development of the agritourism sector slows urban sprawl by keeping families on the farm.
On the ground
After viewing a slideshow of photos from agritourism operations across the U.S., farmers in three Armenian villages were receptive to the notion of developing agritourism services, and saw potential for serving both internal and external tourists. Two farmers, both women, said with conviction, “We can do this. And we can do it better.”
There remain concerns about implementation. “We would need help with advertising,” one farmer said. “We can take care of our fields and manage our garden, but we don’t have the time or expertise to establish and manage links with the people who can bring tourist groups.” Farmers in Mayakovski were concerned about insufficient land and water, as well as their proximity to the main roads. But they saw opportunity to get better prices for their milk and cheese. At present, they sell their milk for three and a half times less than what it is sold for in stores.
Financing new ventures for most Armenians is more than a little challenging. Even if you qualify to borrow money, traditional bank loans hover around 20 percent for home mortgages. Business finance is more expensive, even through microfinance programs such as Kiva and FINCA. A large farm might have the leverage to take out lower-interest loans, but not those who farm on a subsistence or semi-subsistence level.
Armenian farmers do not carry insurance to protect their investments against hail damage or early frosts. There was scarcely an apricot harvest this year because of late spring frosts. The government has at times provided property tax exemption or crop inputs in the event of a disaster, but these cases are rare and not consistent across the country.
Several families recognized that little if any investment would be necessary for a modest start to agritourism operations. The families in Khor Virap were quick to note that their village’s location on a main road—one that leads to major tourist destinations such as the Khor Virap monastery and Noravank—could work to their advantage. Yerevan-ites and tourists alike could stop at their farm to pick their own tomatoes from the family’s garden to make a fresh glass of juice en route to or from their southern destination. Even in the winter, they said, “we could offer homemade vodka tastings, cheese- and madzoun-making demonstrations, and dolma-cooking classes.” Another family said, “We can host people who would like to spend some time working in the village.”
What does it take?
The Agricultural Marketing Resource Center reports factors that contribute to the success of agritourism businesses, including the authenticity of the experience, diversified on-site products and activities, high-quality customer service, provision of certain amenities, a safe and accessible environment, affordable liability insurance, core marketing and financial management competencies, and cooperative approaches to tourism corridors.
The obstacles that agritourism providers face in becoming successful include lack of business acumen, particularly in the area of customer service and marketing, high costs of good liability insurance, distance from a main road and major city, provision of amenities like parking, restrooms, and proper signage, compliance with the range of zoning, health and environmental regulations, and development of a diverse offering of products and services. Some of these obstacles will be more relevant in the Armenian context than others.
Both Nune Sarukhanyan, PhD, president of Green Lane NGO, and Anahit Ghazanchyan, MPH, PhD, country director of the Heifer Project International Armenian Branch office, emphasized that the number one problem in developing successful agritourism activities is the lack of proper toilets and consistent water supply. Ana Cristina Schirinian, the executive director of Fruitful Armenia, argues that the main hurdle to developing tourism is the high cost of airline flights. European tourists must pay at least $200 USD more in airfare than if they were to visit Greece, especially via the Russian-owned Armavia Airline.
Customer service is a common challenge for agritourism providers. “You can make me want to use an outhouse, if your customer service is great,” said Pam Karg, an instructor at the Agribusiness Teaching Center, a department of the Armenian Agrarian University set up by Texas A&M University and funded through the United States Department of Agriculture, operated under the International Center for Agribusiness, Research, and Education.
Sarukhanyan agrees that training of service providers and hosts would be necessary to provide customer service more in line with the expectations of Western tourists. Other training needs regard the lack of understanding of agritourism in general.
Schirinian notes that limited choices in lodging is also a problem. Lodging with families is an option, if you’re open to that and need to watch your budget. On the other end of the pricing range is the network of Tufenkian Heritage Hotels. Both ends of the spectrum are necessary to support healthy regional tourism, but there are limited choices for those who fall in the middle of the spectrum.
While telecommunications systems have improved dramatically over the past 10 years, there is still some doubt that telephone and internet connectivity is at the quality necessary to rapidly expand tourism outside of Yerevan. Similarly, the public transportation system is too limited and of insufficient quality to support major growth in internal tourism.
Naira Mkrtchyan at the Center for Agribusiness and Rural Development says it really boils down to having the right people. “If you don’t have the people, you don’t have the project. It doesn’t matter how clever the idea is,” speaking of prospective partners. “You can’t go into a poor, demoralized village and work miracles. The people need to own the project,” she emphasized.
Sarukhanyan and Ghazanchyan agreed that it is more effective to build on other successes. Current and previous clients of organizations like Green Lane, Heifer Project, and the Fuller Center for Housing have already overcome some difficulties and are better positioned to take a step like this than those who have not. Similarly, families that have been connected with foreign volunteers or visitors have the advantage of understanding better their expectations. In other words, success begets success.
What would it take to make this kind of agritourism a success in Armenia? Well, the good news is that there is already some movement in the sector. Armenia’s Ministry of Economy included a section on new, competitive tourism destinations in its Armenia Economic Report 2009. Though focused primarily on the city of Jermuk and the Tatev area, the report’s stated assumptions regarding proper infrastructure development suggest an integrated policy initiative. Relatedly, the National Competitiveness Foundation of Armenia, a public-private partnership, is spearheading the Tatev Revival Project, which includes developing tourism products in the adjacent river gorge and villages, and a Cuisine Revival Project.
The 777 Van Winery near Khor Virap currently offers some agritourism services by providing tours of their traditional winemaking facility and lunches in their wine tasting parlor. One obstacle for them is that it is a secondary source of income, and thus difficult to expand with limited resources for staffing and capital improvements. The construction of their tasting facility and bathrooms that would meet most any Westerner’s expectations was funded by the Center for Agribusiness and Rural Development (CARD), which is largely supported by the United States Department of Agriculture. The winery faces Mount Ararat, provides lavash-making demonstrations, and shows how traditional winemaking was done in large clay containers.
CARD has also supported the development of HAM herbal tea company’s tasting facility in the village of Odzun in the Lori region, where tourists can visit the flora of the high mountains and taste the 15 locally-produced herbal teas sold under the Ancient Herbals brand.
Shake Derderian, general manager of SIMA Tours, said that although the agritourism efforts to date have not been sophisticated, there have been simple attempts to incorporate the grape harvest and winemaking festival with tours, along with apricot picking. “They are baby steps to get the farmer and tourist on the same page,” she noted. Essentially, there is a chicken and egg effect right now. When there’s no demand, there are no services. When there are no services, there’s no demand. And travel agencies will only offer agritourism products if they have complete confidence in quality service delivery.
Understanding agritourism can be difficult simply because of different cultural expectations about what constitutes a vacation. Many Armenians’ concept of a holiday is to spend a week or two on the shore of the Black Sea, eating and drinking, without any particular activity. The development of a professional exchange program for aspiring agritourism operators would be ideal, agreed both Karg and Sarukhanyan.
Karg assisted one young woman from the south of Armenia to travel to the Midwest of the United States with the support of a scholarship to study agribusiness operations. While there, she visited pick-your-own farms, a dairy month breakfast, a winery and an Amish community. She returned to Armenia with a much greater understanding of how agritourism activities can and should be operated.
For those who are already established, the Cochran Fellowship offers U.S.-based agricultural training opportunities for senior and mid-level specialists and administrators from public and private sectors who are concerned with agricultural trade, agribusiness development, management, policy, and marketing. Priority training areas shift over time, and may not be relevant to agritourism operators. The priorities for 2011 were food safety and animal health.
Making it happen
Monetizing a culture of hospitality seems obscene to some Armenians. Farmers express doubt about charging people for hospitality they would normally provide for guests. For those who can get past that concern, there may be a good market for people who wish to invest some time, expertise, and financial resources in the development of agritourism.
Philanthropists and entrepreneurs alike could nurture entrepreneurial creativity by launching competitions for start-up financing of the most viable venture ideas. Critical to success is finding prospective operations near well-maintained main roads, developing diverse packages of services that can be offered year-round, and marketing. A good place to start is along the roads between Yerevan and any of the major destinations, like Noravank, Lake Sevan, Garni, Etchmiadzin, and Haghpat. Other entrepreneurs have built demand for activities along those routes through the construction of boutique hotels and bed and breakfasts. What remains is for people to build on those successes to creatively meet that demand.