April 8, 2024

The Appeal Investing In Rural Retreats And Luxury Farm Stays

In 2023, the global agri-tourism market reached AUD 51.38 billion. It is projected to grow at a CAGR of 12.5%, reaching AUD 168.88 billion by 2032.

Agri-tourism is on the rise as more travellers seek authentic experiences. Astute investors, especially in Australia with its strong agricultural background and diverse landscapes, are capitalising on this trend. They offer activities like vineyard tours and farm stays to cater to the growing demand. Some of the most notable luxury retreats include Gumleaf Cottage Farm Stay near the Margaret River region, Treenbrook Cottages in Pemberton, and Casa Nera in Yallingup.

The Draw of Rural Perth for Agri-tourism

According to a study on agritourism market segmentation in Western Australia, 41% of people are keen on visiting the Perth region. It’s clear that Rural Perth, with its rolling landscapes, clean lakes, and expansive farmland, is becoming a sought-after destination. Tourists are drawn to its peaceful retreats, as well as the vineyards, olive groves, and small farms that dot the region.

High Net Worth Investors & Agri-tourism

With projections indicating a potential local market value of AUD 29.01 billion by 2030, and an annual growth rate of approximately 5%, agri-tourism in Australia represents a significant opportunity for discerning high-net-worth investors. Regions like Perth are emerging as prime locations, offering compelling ROI potential given the rising demand for unique and local travel experiences, a trend that has been accentuated by the pandemic. 

Success in the Agri-tourism Sector

Australia boasts numerous success stories in the luxury agri-tourism sector. Estates in regions like Margaret River, not far from Perth, have redefined luxury with their high-end farm stays. Guests are treated to premium wine-tasting sessions, gourmet meals, and farm activities, all while being ensconced in luxury.

Luxury Farm Stays: The New Goldmine

  • Steady Income from Elite Clientele
    According to an article from SCMP, luxury travellers visiting Australia tend to spend substantially more than average travellers, with expenditures reaching up to AUD 17,000 per trip, nearly quadrupling the average spend.
  • Diversification with Luxury Farm Stays. 
    Luxury farm stays offer investors a unique asset class that is distinct from traditional real estate or stock market investments. 

    Since 1991, farmland investments in Australia have consistently outperformed traditional asset classes like equities and real estate, yielding an average annual return of 10.74%. This sector has proven to be an effective hedge against inflation, historically exceeding inflation rates by 6.1% annually over the past 50 years, with values rising approximately 14% in the first half of 2022 alone. 

What Investors Can Do?

To achieve success in agri-tourism, it is crucial to diversify activities, ensuring a variety of options that aren’t dependent on seasons. 

  • Implementing stringent maintenance protocols is essential;
  • Engaging professional agencies for regular property upkeep can help maintain high standards and guest satisfaction;
  • Lastly, establishing a robust digital presence is paramount. Combining strong online visibility with strategic partnerships can ensure steady bookings, optimising the reach to potential customers and establishing a foothold in the competitive market.