Extensive Summary 

Rural tourism business is recognized as a dynamic and promising direction of the tourism industry, with ability to solve socio-economic problems of the individual, village, region and country. Rural tourism business, as a source of job creation, has gained great importance for today when the government has chosen the innovation strategy of economic policy- inclusive development, which means enabling more people to contribute to and benefit from economic activities. Rural tourism development is of particular importance for the development of an economically distressed region such as Racha.

For strategic planning of tourism development in Racha it is necessary to assess the current situation, which is the main purpose of this article and to this end the following tasks are set:

• Determination of possibilities of accommodation facilities of tourists in the Municipalities of Racha;
• Determination of working experience of persons engaged in rural tourism business;
• Determination of main types  of food services for tourists;
• Identification of main tourist interests and determination of promising directions for the development of  rural tourism business;
• Determination  of the average length of the tour and average daily cost;
• Determination  of  birthplace of tourists;
• Determination  of  progress of tourism business development;
• Determination  of  sanitary and  hygienic  conditions for residential and public places in municipalities;
• Determination  of  forms of state support necessary for the development of tourism business;
• Determination  of  share of local production in the provision of  food services for tourists;
• Assessment of road infrastructure.

In order to study the current state of rural tourism development, information was obtained from the interviews with real manufacturers of tourist products and municipal tourist centers  in the Municipalities of Racha.

Conclusions drawn from the studies have been identified as challenges in the Municipalities of Racha:

• The current sanitary and hygienic conditions of houses and yards in the villages of Racha do not meet the applicable requirements and require substantial improvement, for which financial investments are important;
• The benefits provided for the development of individual entrepreneurship, in particular family business, do not meet the basic requirement for capital investment necessary to improve  the existing housing fund;
• Most of persons employed in rural tourism business need to be able to improve professional knowledge and skills;
• Non-local agricultural products are mainly used to provide food services to tourists. To enhance economic benefits of tourism expenditure , it is necessary to invest in rural tourism to buy national products;
• Absence of roads and inaccessibility of villages for a long time create a critical problem for

the development of rural tourism. This hinders tourism activity throughout the year.

Overcoming these challenges will help the development of rural tourism business in Racha.

Keywords: rural tourism business, rural tourism product, real producer, guesthouse