Analysis of the Relationships of Indonesian Tourism Demand and Three Favorite International Destinations in South East Asia

Abstract

This paper aim to determine the relationship of tourism growth in Malaysia, Singapore and Thailand to Indonesia. Firstly, the paper performed bivariate and multivariate analysis on each country measured. Secondly, the paper performed a non-parametrical approach to evaluate which combination of tourists movement gave the highest contribution to Indonesia’s tourist arrival. The estimated multivariate model explain the relationship between variables more clearly compared than the other estimated model (R-square > 90%). Malaysia’s and Singapore’s growth in tourists arrival gave effect to the growth in Indonesia, in the long run and short run. However, Thailand’s growth of tourists arrival has only given significant effect to Indonesia’s growth of tourist arrival in the short run. The reverse analysis conducted later on this paper, suggest that Indonesia’s growth in tourists arrival itself gave significant effect to the growth of tourists arrival in Malaysia and Thailand, in the long run and short run as well. However, Indonesia’s growth of tourists arrival only gave an effect toward Singapore in the short run. There’s no evidence of Indonesia’s growth affected Singapore in the long run. Lastly findings of this paper confirmed that compared to the other observed tourists movements, the highest odds percentage of people come to Indonesia obtained from international tourists who visited Malaysia and Singapore, and as for the international tourists who travel from their home country to visited Malaysia, the odds of them to come to Indonesia appear to be the lowest.