Analysis of Factors Affecting the Number of Foreign Tourists to Indonesia

Abstract

Indonesia's tourism potential can be used as the main driver of the Indonesian economy. This study aims to analyze the performance of the Indonesian tourism sector and analyze the factors that influence the number of foreign tourist visits to Indonesia. The method used in this research is a descriptive qualitative analysis method and static panel model analysis. The type of data used in this study is secondary data, including annual time series data for five years, from 2010 to 2014. It also includes cross-section data from nine countries that are the main visitors to the Indonesian tourism sector, namely Singapore, Malaysia, Australia, China, Japan, South Korea, Philippines, UK, and the USA. The development and growth of the performance of the Indonesian tourism sector increased in the period 2010 to 2014. The number of foreign tourist arrivals to Indonesia is influenced by the variables of Gross Domestic Product (GDP) per capita of the country of origin, economic distance, relative prices, and security dummy which have a significant effect on the number of foreign tourist visits to Indonesia, while the exchange rate and dummy travel warning variables have no significant effect. Therefore, the government needs to maintain the stability of the exchange rate and inflation rate as well as the coordination of related parties and institutions in maintaining political, economic, social stability and increasing the promotion of Indonesian tourism to foreign countries.