Tourism Investment, Supply and Demand in Indonesia: Impact and Factor Analysis

Faurani Santi, Rina Oktaviani, Dedi Budiman Hakim, Reni Kustiari

Abstract


Tourism is one of the most significant contributors to the Indonesia growth of economy, based on data
from the Indonesia Central Bureau of Statistics in 2012, the share of national tourism to GDP is 13.9
percent and of course the contribution of the sector to be helpful for the growth of the national economy,
through foreign exchange earnings as revenue from tourist consumption. Besides that, it has provided a
multiplier effect to other sectors which related to the sectors. Therefore, an improving of the contribution
is a one of government’s effort to boost economic growth and increasing the welfare, thus the increasing
of tourism investment and trade will be focus in the tourism development program. Meanwhile, the
Indonesia Coordinating Board (BKPM) stated the average national investment for the tourism sector is
Rp. 2.73 billion or 6 percent from total investment during 2006-2012, in other words an investment in
tourism sector has not been able to provide optimal contribution to the national economy development
considering to its potential.
The purpose of this study was to analyze the determinants of investment, demand and supply of
Indonesian tourism sector. Regarding to answer the problems, this research used series data from 1990 –
2012 periods, by using simultaneous model (2SLS) the model analyzed impact of investment, and
international trade of Indonesia tourism sector to the national economic growth. Based on the Two Stages
Least Squares method on simultaneous model, the results of the analysis gives some conclusions including: (1)
tourism arrivals, tourism expenditure, investment, consumption price index, total consumption, government
spending, export and import tourism affected the national tourism demand, (2) Current investment and
investment on previous year, total consumption on previous year, and travel warning have positive impact to
national tourism supply, (3) GDP was the most influenced variable beside Indonesia tourism price and
neighbor countries’ tourism price as competitors of Indonesia tourism. Finally, the simulations showed the
fiscal and monetary policy impact to the national economic tourismsector.


Keywords


Impact, investment, international trade; supply and demand tourism; and economic growth

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References


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