Scale and locational effects on tourism multipliers: tourism and regional development in Indonesia.

Abstract

The purpose of this research is to examine the influence of scale and location on the multiplier values associated with tourism expenditure in each of the regions of Indonesia. Furthermore, various factors are examined that determine the economic impacts of tourism to better understand how scale of accommodation and location can be used as a conceptual framework to help comprehend the patterns and interactions across regions. These concepts may be used to reveal the complexities underlying the fundamental structures in developing countries to show to what extent development facilitates tourism, and to what extent tourism encourages development. The specific objectives of the research are as follows: 1. To examine the effects of scale of accommodation on the multiplier values within the framework of similarities and differences in the levels of development, density and accessibility in the regions. The results can be used to identify the factors that influence the economic impact of tourism. This perspective examines tourism not only as a source of demand but also the simultaneous relationship between supply and demand within the intersectoral linkages of the national-regional Indonesian economic structure. 2. To examine the locational effects on the characteristics of multiplier values associated with tourism within the core-periphery relationship of the 27 regions of Indonesia. The study analyses the different locations of these regions as tourism destinations and compares how they act as a mediating absorption force for tourism's contribution to regional development. ii 3. To determine the characteristics of the economic impact of tourism in order to aid regional development planning with a better understanding of the concept of intersectoral and interspatial systems by treating tourism in a holistic manner and putting it in a broader context. Tourism, similar to other export industries, involves intersectoral activities, which is based on the recognition that the various sectors that make up the structure of the economy are interdependent. What makes tourism a unique phenomenon compared to other consumer-production relationships is that tourists must travel to the location of the destination in order to consume its product. It is this essential characteristic of tourism that ensures that it has a simultaneous effect not only on economic but also social, environmental and cultural structures in the region concerned. However, the impacts on environment and socio-cultural matters are outside the scope of the thesis. Due to these complex realities, tourism in developing countries can not be approached only in terms of master planning or marketing, rather it is fundamentally a problem of development. The main findings of this research indicate that each region has its own regional differentiation and unique characteristics. These differences involve location or accessibility, proximity to the centres of economic activities, regional economic structures, type and characteristics of tourist activities, and spending patterns. These findings seem to confirm the combined input/output and deductive gravity principles whereby the effects of interlinkages and interspatial factors are strongly intertwined in determining multiplier values of tourism across regions. iii In brief, the less developed the regions, and the farther the accessibility from the centre, the smaller the resulting multiplier values. There is a concept of 'absorption' involved in these relationships, in that multiplier values are gradually absorbed in proportion to flow per unit of economic distance. This evidence suggests that tourism in Indonesia is strongly related not only to development disparities but also to locational constraints. It is hoped that these findings, which offer an understanding of the contribution of scale and location in tourism and regional development, may help address national and regional tourism development policy-making and strategies in developing countries.