Domestic Tourists Boost Bali's Revenue, Yet High Hotel Occupancy Has a Negative Impact, UPN Research Reveals

Illustration by AI

FORMOSA NEWS

Recent research by Putri Dhuhaninda Mahendra and Riko Setya Wijaya from Universitas Pembangunan Nasional (UPN) "Veteran" Jawa Timur uncovers the dynamics of the tourism sector on the economy of Bali Province. By analyzing data over a 15-year period from 2010 to 2024, this study—published in 2026—finds an anomaly regarding regional revenue. While an increase in the number of domestic tourists successfully boosts Bali's Local Original Income (Pendapatan Asli Daerah/PAD), high hotel room occupancy rates surprisingly have the potential to decrease regional revenue. These findings are crucial for bureaucratic governance and regional governments in designing fiscal and tourism policies that are more economically advantageous.

As a primary tourism center in Indonesia, Bali Province relies heavily on PAD revenue to manage tourism infrastructure and ensure community welfare. The Covid-19 pandemic previously hit this sector hard, causing a drastic decline in visitor numbers that directly drained regional revenue. Current economic recovery efforts require the local government to re-optimize its main revenue sources, particularly from hotel activities and tourist mobility.

To measure the actual impact of these tourism activities, the research team utilized official data from the Central Statistics Agency (BPS) website. The methodology employed multiple linear regression analysis using SPSS software to examine the statistical cause-and-effect relationship between fluctuations in domestic tourist numbers, the percentage of occupied hotel rooms, and Bali Province's total PAD receipts.

The data analysis reveals facts that challenge general assumptions regarding hotel accommodation levels:

• Domestic Tourists Boost Revenue: The surge in domestic tourist visits has a positive and significant impact on increasing Bali Province's PAD. These local tourists contribute directly to regional coffers through spending on restaurant consumption, transportation costs, entertainment retributions, and other tourism activities.
• Hotel Occupancy Has a Negative Impact: Contrary to the number of tourists, the hotel occupancy rate has a negative and significant correlation with Bali's PAD. This means that the higher the rate of filled hotel rooms, the lower the regional original income. The researchers suspect this phenomenon is triggered by practices of excessively low room rates or price wars, resulting in suboptimal hotel tax collections. Other influencing factors include potential tax leakage and tourist spending patterns that flow mostly into the informal sector, which is unrecorded by the local government.

The impact of this research demands more strategic public policy and business interventions. Putri Dhuhaninda Mahendra and Riko Setya Wijaya from Universitas Pembangunan Nasional (UPN) "Veteran" Jawa Timur recommend that the Bali Provincial Government immediately implement policies to control hotel tariff price wars to prevent rooms from being sold too cheaply. Furthermore, the local government is advised to actively collaborate with travel agents to offer premium tour packages, such as ecotourism, cultural tour packages, and health tourism (spa or yoga retreats), which provenly possess higher economic value.

AUTHOR PROFILE

• Research Team: Putri Dhuhaninda Mahendra (Corresponding Author) and Riko Setya Wijaya.
• University Affiliation: Universitas Pembangunan Nasional (UPN) “Veteran” Jawa Timur.
• Field of Expertise: Development Economics, Regional Financial Management, and Tourism.

RESEARCH SOURCE

• Article Title: Analisis Pengaruh Jumlah Wisatawan Domestik Dan Tingkat Hunian Hotel Terhadap Pendapatan Asli Daerah Provinsi Bali.
• Publication Year: 2026.
• Journal Name/Publisher: Not specified (Features a Creative Commons Attribution 4.0 International license notice).
• DOI/URL: https://doi.org/10.55927/ijbae.v5i4.53
• Author Contact: putridhuhaninda@gmail.com.