Medan, Indonesia — Hotel occupancy rates have emerged as the most influential tourism indicator contributing to economic growth in North Sumatra Province during the 2015–2024 period. In contrast, the number of international tourist arrivals and the average length of stay did not show a statistically significant individual impact on regional economic growth. These findings were revealed in a study conducted by Petra Elisabeth Sirait and Syamsul Huda from UPN "Veteran" Jawa Timur. The research suggests that the quality of tourism-related economic activities is more important than simply increasing the number of visitors.
Tourism has become one of Indonesia's strategic sectors for promoting regional economic development. Beyond attracting visitors, tourism generates employment, increases local income, and stimulates the growth of supporting industries such as transportation, accommodation, trade, culinary businesses, and other services. North Sumatra possesses significant tourism potential due to its rich natural landscapes and cultural diversity, particularly Lake Toba, which has been designated as one of Indonesia's super-priority tourism destinations. As tourism continues to develop, the provincial government expects the sector to make a greater contribution to regional economic growth.
To measure tourism performance, researchers commonly use several key indicators, including international tourist arrivals, hotel occupancy rates, and the average length of tourists' stays. These indicators are widely considered reflections of tourism-related economic activities. However, previous studies have produced inconsistent findings regarding their actual contribution to economic growth, making further empirical investigation necessary, particularly for North Sumatra Province.
The study employed a quantitative approach using time-series secondary data covering the 2015–2024 period obtained from Indonesia's Central Statistics Agency (BPS). The researchers analyzed four variables: international tourist arrivals, hotel occupancy rates, average length of stay, and regional economic growth measured through Gross Regional Domestic Product (GRDP) growth. Multiple linear regression analysis was conducted using EViews software to evaluate the individual and combined effects of tourism indicators on economic growth. Before hypothesis testing, the regression model successfully passed all classical assumption tests, confirming the reliability of the statistical analysis.
The findings reveal that hotel occupancy rates are the only tourism indicator with a positive and statistically significant effect on economic growth. Higher hotel occupancy reflects stronger demand for accommodation services, which subsequently stimulates broader economic activities across multiple sectors, including restaurants, transportation, retail businesses, and local micro and small enterprises. The regression model explains approximately 75.49 percent of the variation in North Sumatra's economic growth, while the remaining 24.51 percent is influenced by factors beyond the study's scope. Simultaneously, all three tourism indicators collectively have a significant impact on regional economic growth.
In contrast, the study found that international tourist arrivals do not significantly influence economic growth. Although the number of foreign visitors has increased over time, the additional tourist arrivals have not been effectively converted into greater regional economic value. According to the researchers, this situation may result from weak linkages between tourism and other sectors of the local economy, relatively low tourist spending, and the limited development of high-value tourism products. In other words, attracting more international visitors alone does not automatically generate stronger economic growth unless the economic benefits are distributed more broadly throughout the region.
A similar pattern was observed regarding the average length of stay. The research indicates that longer visits do not necessarily translate into higher economic growth. The economic contribution of tourists depends not only on how long they stay but also on how much they spend during their visit. Tourists may remain at a destination for several days without making substantial expenditures if tourism products, attractions, and local business opportunities are limited. Therefore, extending visitors' length of stay should be accompanied by the development of more diverse tourism attractions, creative industries, and value-added tourism products to maximize local economic benefits.
According to Petra Elisabeth Sirait and Syamsul Huda from UPN "Veteran" Jawa Timur, tourism development strategies should prioritize strengthening the accommodation industry, improving service quality, and creating tourism products that encourage visitors to spend more during their trips. The researchers also emphasize the importance of strengthening connections between tourism and other economic sectors so that tourism activities can generate broader and more sustainable benefits for local communities.
The findings offer valuable insights for policymakers and tourism stakeholders. Increasing the number of visitors alone is not sufficient to maximize tourism's contribution to economic development. Greater attention should be given to improving destination quality, enhancing hotel and accommodation services, expanding tourism attractions, and supporting local culinary businesses, creative industries, and micro, small, and medium-sized enterprises (MSMEs). By increasing tourist spending and strengthening the tourism value chain, North Sumatra can generate greater economic benefits while promoting sustainable regional development.
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DOI: https://doi.org/10.55927/ijsmr.v4i7.91
Journal Link: https://journalijsmr.my.id/index.php/ijsmr/article/view/91
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