Tourism, accommodation, and the regional economy in Indonesia’s West Papua

Abstract

This study deals with the contribution of visitor expenditure on West Papua’s regional economy. It accomplishes three objectives: (1) to estimate the economic contribution of domestic and inbound visitor expenditure; (2) to measure the economic contribution of tourist spending at various accommodation classes; and (3) to describe the use of local commodities and labor in the regional accommodation industry. To accomplish the first and second objectives, an input-output multiplier analysis was employed. As for the third objective, interviews were conducted with 35 representatives from regional accommodation establishments. Tourism is found to contribute greatly to the regional economy, as shown from the higher overall output multiplier for tourist expenditure as compared to the regional output multiplier. The output multiplier for inbound tourist expenditure is higher than the domestic tourist. Three-star accommodations are found to be the biggest contributor with outstanding inter-sectoral impact on fisheries; food, beverage, and tobacco manufacture; and agriculture. The qualitative analysis suggests the existence of a large leakage (±90%), mainly in produce and chemicals used in daily operations. Fisheries and wood furniture are the exception. Overall, the accommodation sector absorbs a considerable extent of local labor (73%), 23% of which are Indigenous Papuans.