Economic analysis of the organisation of a riding centre; application of the linear programming approach

Abstract

In this contribution, the economics of an equestrian centre, which in addition to a variety of riding school activities also includes breeding and livery, are analysed. We consider the conditions for a hypothetical holding operating in central Slovenia. Methods of mathematical programming are applied in order to attempt to optimise the holding’s activities. Their use may in the given situation facilitate the evaluation of development prospects from different perspectives and indicate the opportunities of increasing value-added. On the basis of maximizing the gross margin, we try to address the various questions and challenges that arise in managing and planning for such an equestrian centre. The obtained results indicate that breeding is unfavourable in the given price-cost ratio, both for the renewal of the working horses herd and for sale. This reflects the current adverse situation in the field of horse breeding. Livery is an important activity on such holdings and through opportunity perspective provides an optimal set of activities. Activities of the riding school for children are interesting in terms of income diversification, as well as an additional source of revenue. A riding school with one riding instructor and an indoor arena needs 4.6 horses in order to cover the costs of full-time employment.