Tourism Leakage of The Accommodation Sector in Bali

Tourism has been a driving force of economic development and has become the leading economic sector in Bali Province. However, the economic impacts of tourism development have not been convinced to be fully beneficial for Balinese community. There is a phenomenon that tourists’ expenditure has not been totally remaining in Bali’s economy. It was because some of the expenditures by tourists leak out the destination, called tourism leakage, in the form of payment for imported products and services, payment of wages for foreign employees, and profits transfer to foreign owners. So far, the amount of tourism leakage in Bali has not been calculated yet. Therefore, there is a need to ascertain the current amount of leakage in Bali tourism. The objectives of the study are: (i) to calculate the amount of tourism leakage from accommodation sector in Bali at micro (industrial) level; (ii) to calculate the amount of tourism leakage from accommodation sector in Bali at macro (regional) level; (iii) to evaluate the impacts of government subsidies and import reduction by accommodation sector on tourism leakage, job opportunity and income distribution; (iv) to evaluate the perception and preference of foreign tourists on imported and local products as well as the willingness of foreign tourists to spend their money to benefit of Balinese people; (v) to evaluate the points of view of hotel managers related to imported and local products as well as their willingness in reducing the use of imported products and giving the priority on local products; and (vi) to develop a strategy in minimizing tourism leakage in accommodation sector in Bali. Research was designed through quantitative and qualitative approaches. Data on primary research was collected by using survey method at four main tourist destinations in Bali, namely: Kuta, Nusa Dua, Sanur and Ubud. There were 79 hotels selected as sampling hotels based upon a probability proportional to size sampling method, and 600 of foreign tourists were selected as respondents. Calculation of tourism leakage on micro analysis was undertaken by using a method developed by Unluonen, et. al. (2011), meanwhile, on macro analysis was carried out by using a method proposed by Thorbecke (1988) which was based on the Social Accounting Matrix (SAM) of Bali 2010. Perception and preference of foreign tourists on imported and local products as well as assessment of the willingness of foreign tourists to spend their money for the benefit of Balinese people were analyzed by using JMP program (SAS Company). The results show that based on the micro analysis, the highest tourism leakage of accommodation sector in Bali is at 4&5 Star-rated chain hotels (51.0 %), followed by 4&5 Star-rated non-chain hotels (22.7 %), 1,2&3 Star-rated hotels (12.0 %), Non-star rated hotels (8.8 %), and with the average leakage of 18.8 %. Based on macro analysis, tourism leakage of accommodation sector in Bali are as follow: (i) Leakage of Non Star-rated hotels is 2.0 %; (ii) Leakage of 1,2&3 Star-rated hotels is 15.7 %; (iii) Leakage of 4&5 Star-rated non-chain hotels is 7.1 %, (iv) Leakage of 4&5 Star-rated chain hotels is 55.3%; and (v) Average leakage of all types of accommodation is 19.5%. Government and tourism industries play an important role in minimizing tourism leakage, increasing job opportunity and increasing income distribution. Foreign tourists significantly look for local products and are willing to spend their money for Balinese people. Hotel managers are willing to use local product as long as it can fulfill the quality standard. Strategy for minimization of tourism leakage can be in terms of optimizing the potential of local products; to develop agriculture, livestock, fisheries and handicraft industry; empower community; reduce the use of imported products for tourists; urge government to develop and implement supporting policies in order to minimize tourism leakage. Key words: tourism income, tourism leakage, accommodation sector, Bali.