Rural tourism has long been considered a means of achieving economic and social development and regeneration. More specifically, it has been widely promoted as an effective source of income and employment, particularly in peripheral rural areas where traditional agrarian industries have declined. More recently, however, a number of established tourism destinations have also turned to rural tourism in order to diversify their tourism products and markets and to spread the benefits of tourism away from the coastal resorts into the hinterland. The purpose of this paper is to explore the extent to which this latter role for rural tourism represents a realistic tourism development policy. Based upon research into the development of ‘agrotourism’ in Cyprus, it highlights the challenges and problems encountered by rural tourism entrepreneurs, identifying a number of issues which militate against the success of rural tourism development. In particular, it identifies high development costs but low returns, low demand, a lack of essential skills and the dominance of mass tourism operators as major challenges. It concludes, therefore, long-term financial and technical support is essential if tourism is to play an effective rural development role
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