Multi-year welfare distribution of inbound tourism in Indonesia

This study investigates the distribution of benefits from inbound tourism across sectors, factors, and institution in Indonesia from 1995 to 2016 using a social accounting matrix framework. The financial contribution of inbound tourism to the Indonesian economy grew significantly between 1995 and 2016, yet remained vulnerable to monetary and sociopolitical crises. The closed-loop, or feedback, effect is the largest decomposed multiplier of inbound tourism (between 48 and 57%), indicating a significant contribution to labor and households. Clerical, sales, and service workers benefited the most (42–52%), particularly paid workers in the urban segment (20–24%). A higher proportion of tourism benefits is distributed to urban households (47–70%), with a significant gap between low-income households (23–27%) and high-income households (22–46%). Rural households receive 20–31% of the benefit, with a relatively small disparity between low-income households (8–17%) and high-income households (9–15%). Agricultural households receive 11–27% of the benefit, with agri-entrepreneur families receiving 9–22%, whereas the farm worker group receives the least among labor segments (2–6%). Overall, inbound tourism distributional welfare favors service-related workers and households in urban areas, though it widens the disparity between low- and high-income groups. Future work can be pursued in other developing economies, thereby enabling a wider comparative analysis.