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Archives of Business Research – Vol. 11, No. 6
Publication Date: June 25, 2023
DOI:10.14738/abr.116.14869.
Putri, A. R. A., Fadhila, P. G., & Furqan, A. (2023). Tourism Impact on Economic Growth in Bali. Archives of Business Research, 11(6).
94-101.
Services for Science and Education – United Kingdom
Tourism Impact on Economic Growth in Bali
Aulia Restu Ariyanto Putri
School of Architecture, Planning and Policy Development,
Institut Teknologi Bandung
Putri Ghina Fadhila
School of Architecture, Planning and Policy Development,
Institut Teknologi Bandung
Alhilal Furqan
School of Architecture, Planning and Policy Development,
Institut Teknologi Bandung
ABSTRACT
Tourism have made a significant contribution to the balance of trade and the
development of the country’s overall economic policy which can be seen from the
increasing number of international tourist visits to a particular destination country
with various economic impacts occurred. This has led tourism being used as one of
the strategies to reduce poverty and increased economic growth. Increased
economic growth in the surrounding community can be seen from increased
income, creating new jobs, diversifies the economy, adding new product, and
contributing to the overall economic sector that is integrated to achieve an
improved quality of life. This research focuses on economic growth that occurs due
to tourism activities in Bali Province by considering the 5 (five) indicators of
economic growth consisting of increasing revenues, diversifies economy, creates
new job, generate additional income, and adds new products by conducting a
documentation study in the span of the past 10 years.
Keywords: Tourism, Tourism Impact, Economic Impact, Economic Growth
INTRODUCTION
Tourism has developed significantly especially in developing country. This could happen
because tourism is consideres important in economic development and povertu reduction [1].
When tourism is planned and implemented in an integrated manner, it could have an economic
impact at all levels of the economy, both regional and national. Tourism is considered as one of
the services indutries that plays a role in economic growth in the world and is able to become
a driver of national, regional development, increase the exchange rate value, create jobs and
contribute to social development that will provide benefits to society [2]. The tourism industry
is a complex and high-income sector that has a significant impact on the development of key
sectors of the world economy. Nowadays, tourism is a catalyst for socio-economic development,
both directly and indirectly contributing to the cultural growth of living standards, the
development of countries and regions in the world [3]. Being considered as a growth structure
with effective economic benefits, tourism gives chances to expand employment, development
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Putri, A. R. A., Fadhila, P. G., & Furqan, A. (2023). Tourism Impact on Economic Growth in Bali. Archives of Business Research, 11(6). 94-101.
URL: http://dx.doi.org/10.14738/abr.116.14869
distribution to the underdeveloped areas which eventually leads to the regional disparities
adaptation [4].
Preservation of environment and culture could be done through tourism which gives an image
regarding the sustainable development by economic growth, environmental sustainability, dan
social benefits. Tourism activites and revenue could support the society to increase
employment, adding new products, and generates additional income so that it is contributed to
economic integration, added with public and private partnerships can improve the
community’s quality of life [5]. The main benefit of tourism is relatively trackable, in terms of
tourist expenditure that could be utilized to cover the operational fee. There are multiplier
effects from the economic cycle by the locals [6].
Besides that, tourism development could also help the economic growth with the ability to;
a) Stimulating the infrastructure growth like airport, roadways, port, electricity, etc;
b) Contributing to local industry which supplies tourism industry such as transportation,
agriculture, food processing, commercial fishing, logging, and construction;
c) Attract foreign investation (esp. hospitality); and
d) Facilitating the transfer technology and technical knowledge.
Until now, tourism has become the government prioritize sector since it considered able to
drive the nation’s economy. In 2020-2024 RPJMN (Rencana Pembangunan Jangka Menengah
Nasional) or the National Medium-Term Development Plan, explains that according to the
tourism foreign exchange earnings of US$3.46 billion, tourism in one of Indonesia’s strategies
for Real Sector Value Added, Industrialization, and Employment Opportunities (RPJMN, 2020).
In 2019, there were 16.106.954 foreign tourist who visited Indonesia, 4.052.923 in 2020, and
1.557.530 in 2021. The decreasing number of foreign tourists is due to the Covid-19 pandemic
which certainly has a big impact on human’s life [7].
The enacment of Law No. 32 Year 2004 about local governance, gives authority to local
government to manage their region so that the local government has the power to develop
tourist destination in their respective region. Bali Provincial Government is one of the
governances who develops tourism in Bali Island as the main economic sector. Bali island is one
of the main destinations for international tourist that got titled as “The Best Destination in The
World” and “The Best Spa Destination of The World” from international magazines were one of
the proofs of how fascinated and amazed foreigners are by the beauty and uniqueness of Bali
as a world tourist destination [8].
Based on the number of visits to Bali Island, it could understand that most foreign tourist who
visit Indonesia, go to Bali
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Archives of Business Research (ABR) Vol. 11, Issue 6, June-2023
Services for Science and Education – United Kingdom
Table 1. Number of Foreign Tourist Visits of Indonesia and Bali
Year Indonesia Growth (%) Bali Growth (%)
2010 7.002.944 10.74 2.576.142 8.01
2011 7.649.731 9.24 2.826.709 9.73
2012 8.044.462 5.16 2.949.332 4.34
2013 8.802.129 9.42 3.278.598 11.16
2014 9.435.411 7.19 3.766.638 14.89
2015 10.406.291 10.29 4.001.835 6.24
2016 11.519.275 10.70 4.927.937 23.14
2017 14.039.799 21.88 5.697.739 15.62
2018 15.806.191 12.58 6.070.473 6.54
2019 16.106.954 1.88 6.275.210 3.37
2020 4.052.923 -74.84 1.069.473 -82.96
2021 1.557.530 -61.57 51 -100.00
Source: BPS Provinsi Bali, 2022 [7]
With an increase in the number of tourists, it will directly have an impact on tourism destination
retribution revenue and affect the increase in local revenue. Tourism destination levy revenue
and affect the increase in Regional Original Revenue [9]. The following is the amount of local
revenue of Bali Province from year to year. With the escalation of the tourist number, it will
directly affect the tourist destination retribution revenue which also affect the enhancement of
Original Local Government Revenue [9]. The following table is the amount of local revenue of
Bali Province in period of time.
Table 2. Local Revenue
Year Local Revenue (Rp)
2010 1.393.730.257
2011 1.723.807.096
2012 2.042.091.096
2013 2.529.976.147
2014 2.920.416.697
2015 3.041.266.607
2016 3.041.195.258
2017 3.398.472.278
2018 3.718.499.635
2019 4.023.156.316
2020 3.069.474.218
2021 3.117.070.009
Source: BPS Provinsi Bali, 2022 [10]
Based on the data above, it can be seen that there is foreign tourist number growth and the local
revenue in the period of time. There is a close connection between tourism, economic growth,
and community welfare because of the multiplier effect which is a tourist expenditure cycle that
could impacted the local’s income [11]. By making tourism a strategy to improve the economy,
a study of the impact of tourism on economic development in Bali Province was conducted. The
study of the impact of tourism on economic growth is studied within the framework proposed