Tourist Arrivals to Indonesia:

Does Religion Matter?

Dyah Titis Kusuma Wardani1, Romi Bhakti Hartarto2, Wahyu Tri Wibowo3
1,2,3 Department of Economics, Faculty of Economics and Business, Universitas

Muhammadiyah Yogyakarta, Yogyakarta, Indonesia, 55183

Introduction Research Objective

OUTLINE

Findings
Data & Methods
 INTRODUCTION
Indonesia has many Islamic
A growing interest in tourist destinations, such as
Muslim-friendly destination. mosques, palaces, museums,
tombs, and associated
culinary delights (Jaelani et
al., 2016).

It has been projected that

Muslim travellers would Tourism market in
spend around USD 300 Indonesia reached 18%
billion annually by 2026 in 2018.
(Global Muslim Travel Index, 2017)

…with the number of foreign Indonesia needs to

tourists from Muslim prepare and gain more
countries reached 2.8 million, advantages from this
contributing around IDR 40 opportunity
trillion in the foreign
exchange.
 Halal tourism is also targeted
to non-Muslim tourists. This is
because halal tourism only Arranging integrated halal tour
adds products and services
needed by practicing Muslims, 1 packages in each featured province.
therefore, it is still deemed
acceptable by non-Muslims
(El-Gohary, 2016).

Halal Tourism
Branding halal tourism through exhibition
Development Strategy Plan 2 and social media.
in 2019-2024

Currently, the Indonesian

government is still
attempting to design halal Formulating the law on halal tourism
tourism programs that are 3
acceptable both for Muslim
and non-Muslim markets.
RESEARCH OBJECTIVE

This study aims to examine the effect of

religion (Muslim country as a proxy) on the
number of tourist arrivals in Indonesia.

Through understanding whether religion

affects inbound tourists in Indonesia.
 Novelty & Contribution
This study contributes to the body
of literature regarding the role of
religion on tourist arrivals by This study included panel data
looking at the issue from a of 196 countries from 2017
macroeconomic perspective with to 2019.
panel data approach using Gravity
Model.

This study includes data

At the aggregated level, from Muslim countries
panel data approach uses (OIC) and Non-Muslim
country-time variables. countries.
 DATA & METHODS
International tourist arrivals were retrieved
DATA
1 from the United Nations World Tourism
Organization (UN-WTO).

GDP per capita, population and bilateral

2 exchange rate are obtained from the World
Bank.
1) Voice and accountability
2) Political stability and absence
Political risk as a control variable, which is of violence/terrorism
3 from Worldwide Governance Indicators
(WGI) database of the World Bank.
3)
4)
Government effectiveness
Regulatory quality
5) Rule of law
Several studies mentioned that institutional variable 6) Control of corruption
such as political risk is a pivotal factor for tourism
(Vietze, 2012; Bramwell, 2013; Xu et al., 2019). The
higher the political risk, the lower will be the tourist flows.
 METHODS
01 This study employs the gravity model.

02 This study identify the importance of religion in

explaining tourist arrivals to Indonesia using panel data.

The empirical model in equation was estimated

03
using three basic methods in panel data, namely:
a Ordinary least squares (OLS)

b Fixed Effect Model (FEM)

c Random Effect Model (REM)

 RESULTS AND DISCUSSION
Table 1. Descriptive Statistics
Variables Obs. Mean Std. Dev Minimum Maximum
Tourist arrivals 588 75,383 304,080 0 2,980,753

OIC 164 54,312 343,869 0 2,139,161

Non-OIC 424 83,533 287,244 44 2,980,753

OIC membership 588 0.279 0.449 0 1

GDP per capita of origin country 588 15,393 24,011 34 209,225

Population of origin country 588 36,970,000 142,200,000 10,577 1,398,000,000

Distance 588 10,536 4,681 893 19,814

Visa-free country 588 0.821 0.383 0 1

Political stance of origin country 584 -0.0378 0.977 -3.010 1.640

Bilateral exchange rate 588 5,380 7,476 0.337 47,456

Temperature difference 588 6.601 8.091 -2.690 32.50

The minimum and maximum values of tourist arrivals are 0 and 2,980,753 respectively, with the
standard deviation of 304,080.
The mean of tourist arrivals from non-Muslim countries (83,533) is higher than that from Muslim
countries (54,312) by a large number
 RESULTS AND DISCUSSION
Table 2. Estimated Coefficients for OLS, FEM, and REM
Dependent variable: log(tourist arrivals) OLS Fixed Effect Random Effect
OIC membership 0.213 -0.291 0.022
(0.144) (0.617) (0.220)
log(GDP per capita in origin country) 0.430*** 0.893 0.500***
(0.053) (0.697) (0.085)
log(population in origin country) 0.981*** 2.113 0.931***
(0.034) (1.534) (0.053)
log(distance) -1.837*** -11.02*** -1.861***
(0.101) (3.846) (0.169)
log(bilateral exchange rate) 0.182*** 0.052 0.170***
(0.026) (0.170) (0.042)
Political risk in origin country 0.624*** -0.047 0.344***
(0.101) (0.199) (0.130)
Temperature difference 0.043*** 0.590** 0.045***
(0.008) (0.285) (0.0134)
Visa-free country 0.687*** -1.819 0.906***
(0.170) (1.505) (0.276)
Constant 3.324*** 64.03** 3.641*
(1.145) (31.75) (1.909)
Observations 588 588 588
R-squared 0.796 0.980 0.793
Hausman test (chi2) 8.87
Prob>chi2 0.114

Standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1

CONCLUSION
The finding shows that religion has no
significant effect in enhancing
international tourist arrivals in
Indonesia.

However, tourists from non-Muslim

countries still outnumbered those from
Muslim countries and this calls into
question about the effectiveness of halal
tourism initiatives in Indonesia.

Add Contents
Tourists prefer to Title
visit Indonesia because of
You free
visa can simply impressrather
facilities your audience
than and
religious
add a unique zing and appeal to your
reasons
Presentations.
 RECOMMENDATION
The Indonesian government has
01
implemented halal tourism initiatives to
attract more tourists from Muslim and Non-
Muslim countries.
Although, free visa policy in Indonesia is
02 effective to increase tourist arrivals in
Indonesia, the Indonesian government
need to evaluate its visa-free policy. Note
that, in 2022, Indonesia add 43 countries in
its list and give them free entry to Indonesia
ACKNOWLEDGMENTS

Majelis Diktilitbang Muhammadiyah for

providing financial support through
Risetmu scheme under grant No.
0784/I.3/D/2021

Muhammad Azizurrohman for helping

us collect and compile the data
 THANK YOU FOR YOUR PRECIOUS TIME
MAY ALLAH BLESS US WITH KNOWLEDGE AND WISDOM

WASSALAMU’ALAIKUM