The Effect of Regional Economic Activities on Domestic Tourism during the Covid-19 Pandemic in Indonesia

Abstract

This study aims to investigate the how the regional economic activity measured as the agglomeration of companies affects domestic tourism during the Covid-19 pandemic, taking into account the spatial relationship between provinces in Indonesia. Spatial analysis was carried out using Moran’s I test and Spatial Durbin Model. The value of Moran’s I significantly positive, indicating that there is a link of tourists visits between provinces. The main variables of companies and density have a significant negative, while the labor variable has a significant positive on the number of domestic tourist visiting in a province. The results confirm that areas with high regional economic activity were less attractive to domestic tourist during the Covid-19 pandemic in Indonesia. In addition, other factors that affect domestic tourism are labor and population density. As the positive spillover findings on Indonesian domestic tourism shown in this study, the government needs to be utilized as one of the considerations in regional tourism improvement programs. This suggests that provinces especially the less developed should take full advantage of the spillover effect between provinces on tourism flows from neighboring provinces to support local tourism development.