A System Dynamics Approach to Decision-making Tools in Farm Tourism Development

Abstract Background: Besides visiting the main tourist attractions in Slovenia, many tourists want to spend their free time in the countryside as well, but the number of farming establishments in Slovenia diminished distinctly in the last years. Objectives: This paper aims to develop a system dynamics model, with the goal to analyse dynamics of the diversification of agricultural holdings into farm tourism activities in Slovenia. Methods/Approach: A system dynamics methodology was chosen to model the diversification in farm tourism. First, we present a basic concept of a system dynamics model with a causal loop diagram. Further, a system dynamics model with different scenarios is presented. Results: The main feedback loops were identified, and the simulation model was used to analyse different simulation scenarios of the transition of farming establishments into farm tourism facilities. Conclusions: The model provides the answers to the strategic questions about the dynamics of transfer into tourist farms, using several simulation scenarios. The transition mainly relies on subsidies, promotion of diversification and the growth of rural tourism, which provides a relevant direction for the development of future incentives.