Economic Impact of Tourism Development in Coastal Area: A Multiplier Effect Analysis Approach

Abstract

Coastal areas in Kupang is one of the places where economic activities between tourists and business units managed by local communities have taken place since the 1990s. However, research on the economic impact using multiplier effect approach has never been done in coastal areas of Kupang. Objective of this study is understanding the economic impact by measuring the implications of tourist expenditure on the local economy. This research uses a mixed qualitative-quantitative method. Respondents in this study were 170 tourists and 80 managers of tourism business units spread over 3 most visited beaches in Kupang. Data collection techniques are distributing questionnaires to tourists and interviews with business unit managers. The data obtained were processed with Ms. Excel 2016 and Keynesian Multiplier Effect analysis. The results showed the tourism multiplier effect of Keynesian Income Multiplier 1.50, Income Ratio Type (1) 1.48, and Ratio Income Type (2) 2.00. These results indicate that tourism activities in the coastal area of Kupang are able to bring an economic impact on tourism business units, with the results of multiplier effect ( 1). Implication of this study is to develop coastal areas more integrated to increase economic impact for local business owners.