The Influence of Tourism Performance on Economic Growth in Indonesia

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FORMOSA NEWS - Medan - Foreign Tourist Visits and Hotel Occupancy Drive Indonesia’s Economic Growth: New Study. The tourism sector serves as a vital catalyst for national economic expansion, yet its underlying mechanisms require continuous empirical evaluation. Released in September 2026, a comprehensive study conducted by researchers from Universitas Senior Medan led by Nurul Febriani Br. Regar alongside Ayu Angelina Pasaribu, Siti Maisyarah, and Yosie Gabriela Panjaitan investigated how tourism performance directly influences economic growth across Indonesia. Published in the Formosa Journal of Applied Sciences, this research provides crucial insights for policymakers and industry stakeholders striving to optimize tourism’s economic footprint in the post-pandemic era.

Navigating Economic Recovery and Tourism Dynamics

Economic growth remains a primary benchmark for national development, traditionally measured through per capita income and Gross Regional Domestic Product (GRDP) increases. Indonesia has long leveraged tourism as a strategic pillar to generate employment, boost community incomes, attract foreign investment, and contribute to the Gross Domestic Product (GDP). However, the unprecedented disruptions caused by the COVID-19 pandemic triggered drastic fluctuations in visitor arrivals and industry performance. Recognizing the need for rigorous empirical clarity, the research team from Universitas Senior Medan examined three core indicators: foreign tourist visits, star-rated hotel room occupancy rates, and tourism's contribution to the national GDP.

Robust Quantitative Methodology
To uncover the empirical reality behind national tourism statistics, the researchers deployed a quantitative approach combining time-lapse and cross-regional data spanning from 2019 to 2025. The study analyzed secondary data encompassing 34 provinces across Indonesia, yielding a robust dataset of 238 observations. Data analysis was performed using EViews 10 software through static panel data regression models, which included the Common Effect Model (CEM), Fixed Effect Model (FEM), and Random Effect Model (REM). Through rigorous model specification procedures—specifically the Chow test, Hausman test, and Lagrange Multiplier test—the Fixed Effect Model (FEM) was selected as the optimal framework for hypothesis testing.

Key Research Findings
The statistical analysis revealed compelling insights into how distinct tourism indicators affect Indonesia’s broader economic landscape:

• Significant Boost from Foreign Visitors: The volume of foreign tourist visits demonstrates a positive and highly significant impact on economic growth, boasting a regression coefficient of 5.1726 ($p < 0.01$). Increased international arrivals directly amplify economic activity through travel spending, lodging, and consumption.
  
• The Power of Hotel Occupancy: Star-rated hotel room occupancy rates also exert a positive and significant effect on economic expansion, with a coefficient of 0.1189 ($p < 0.01$). Higher occupancy reflects thriving business and leisure travel that boosts revenues across hospitality, transport, and culinary sectors.
  
• GDP Contribution Dynamics: Conversely, the statistical model indicated a negative and non-significant relationship between tourism's direct GDP contribution percentage and economic growth during the observation window. This divergence suggests that conventional macroeconomic GDP measurements for tourism require broader integration to capture indirect multiplier effects fully.
  

Simultaneously, the three tourism components account for 66.54% ($R^2 = 0.6654$) of the variation in Indonesia’s economic growth, confirming their collective potency as economic drivers.

Real-World Implications and Strategic Policy Impact
The findings carry substantial implications for government bodies, business leaders, and regional planners. According to Nurul Febriani Br. Regar and her colleagues at Universitas Senior Medan, sustaining economic momentum requires aggressive international tourism promotion, destination development, and enhanced infrastructure quality. Furthermore, government authorities must foster strategic investments to elevate hotel service standards and maximize room occupancy.

Author Profile
Nurul Febriani Br. Regar, S.E., M.Si. – Lead researcher and lecturer in Economics at Universitas Senior Medan, specializing in regional economic development and tourism economics.
Ayu Angelina Pasaribu, S.E., M.Sc. – Researcher in Macroeconomics and Public Policy at Universitas Senior Medan.
Siti Maisyarah, S.Stat., M.E. – Expert in Economic Statistics and Quantitative Data Analysis at Universitas Senior Medan.
Yosie Gabriela Panjaitan, S.Tr.Par., M.Par. – Specialist in Tourism Industry Management and Hospitality Systems at Universitas Senior Medan.

Source
Nurul Febriani Br. Regar, Ayu Angelina Pasaribu, Siti Maisyarah, Yosie Gabriela Panjaitan. The Influence of Tourism Performance on Economic Growth in Indonesia (Pengaruh Kinerja Pariwisata terhadap Pertumbuhan Ekonomi di Indonesia). Formosa Journal of Applied Sciences (FJAS), Vol. 5, No. 9, 2026, halaman 2031–2042
DOI: https://doi.org/10.55927/fjas.v5i9.112
Tautan: https://journalfjas.my.id/index.php/fjas