Quantifying tourist contributions: Assessing the impact of domestic and foreign visitors on Bandung’s hotel tax income growth

Abstract

The city of Bandung, situated in West Java, Indonesia, is a prominent tourist destination. Its combination of physical and cultural attributes makes it an appealing choice for both local and international travelers. The influx of tourists, whether domestic or foreign, holds the potential to enhance the city’s financial prospects, particularly through hotel taxes. This study delves into the correlation between domestic and foreign tourist visits and the escalation of hotel tax revenue in Bandung. The goal is to derive a formula that can effectively optimize hotel tax earnings in the city. Employing descriptive and causal methodologies alongside a quantitative approach, the research relies on secondary data spanning 2004 to 2021 and employs multiple linear regression for data analysis. The findings demonstrate a positive correlation between foreign tourist visits and the growth of hotel tax revenue, underscoring how an increase in foreign tourists corresponds to heightened tax earnings. Conversely, the research reveals a negative impact of domestic tourist visits on the expansion of hotel tax revenues.