Impact of Tourism Leakage on the Growth of Economic Sectors, Employment and Income Distribution in Bali, Indonesia

Abstract: Not all of the revenue generated from tourist expenditure in a tourism destination such as Bali reaches the tourism actors and community in the area, because part of it goes outside the region or abroad; this is commonly referred to as “leakage”. The purpose of this research was to simulate the impact of this tourism leakage on the growth of economic sectors, employment and income distribution. The simulation, based on the Social Accounting Matrix (SAM) for Bali 2012 (109x109), required primary data obtained directly from primary sources such as households and hotels, and secondary data obtained from government agencies such as BPS Statistics Indonesia – Bali Province, etc. Data analysis methods comprised: (1) descriptive analysis, and (2) analysis of the simulation. The results of the research show that the highest percentage of tourism leakage was found in 4 and 5 star chain hotels (55.31%). Lower levels were found in 1, 2 and 3 star hotels (15.66%), followed by 4 and 5 star non-chain hotels (7.14%), with the lowest leakage being in non-star hotels (2.0%). The average leakage across all types of accommodation was 19.48%. The result of the simulation shows that as tourism leakage increases, economic growth is reduced, employment in the production sectors declines, and income distribution becomes increasingly unequal. Conversely, when tourism leakage is reduced, economic growth increases, employment expands, and income distribution becomes more equal. Keywords: tourism leakage, accommodation, economic sectors, employment, income distribution.