EXAMINING THE IMPACT OF FOREIGN TOURIST ARRIVALS AND HOTEL OCCUPANCY ON BALI PROVINCE'S REGIONAL REVENUE

Copyright © ISRG Publishers. All rights Reserved. DOI: 10.5281/zenodo.17837850 221 ISRG PUBLISHERS Abbreviated Key Title: Isrg J Econ Bus Manag ISSN: 2584-0916 (Online) Journal homepage: https://isrgpublishers.com/isrgjebm/ Volume – III Issue - VI (November-December) 2025 Frequency: Bimonthly EXAMINING THE IMPACT OF FOREIGN TOURIST ARRIVALS AND HOTEL OCCUPANCY ON BALI PROVINCE’S REGIONAL REVENUE Ni Made Arsita Kusumadewi1*, I Made Suparta2 1, 2 Department of Development Economics, Universitas 17 Agustus 1945 Surabaya, Indonesia | Received: 29.11.2025 | Accepted: 03.12.2025 | Published: 06.12.2025 *Corresponding author: Ni Made Arsita Kusumadewi Department of Development Economics, Universitas 17 Agustus 1945 Surabaya, Indonesia INTRODUCTION Indonesia is acknowledged globally as the world’s most extensive archipelagic country, endowed with abundant natural resources and a skilled workforce, yet these assets have not been managed optimally. Actions are needed to achieve the well-being of the Indonesian people, which can be achieved through collaboration across sectors to ensure economic development progresses evenly. This effort involves promoting balanced, sustainable economic growth across all regions. The tourism sector is one of the leading sectors that plays a vital role in increasing regional revenue. Local governments strive to explore and manage existing tourism potential through various innovations to create new sources of income that can significantly Abstract Bali Province is internationally renowned in Indonesia. Its most attractive characteristic is its tourist attractions, which are highly sought after by foreign tourists. Tourists are typically consumerist and require goods and services directly during their visit. The large number of tourists makes the tourism sector valuable for increasing regional revenue. As a regional source of income, the tourism sector is strongly influenced by the number of tourist visitsThe growth of a region’s tourism industry is largely determined by the volume of tourist arrivals and the duration of their stay. This study aims to examine the impact of foreign tourist visits and hotel occupancy rates on Bali’s regional revenue. Using multiple linear regression and 15 years of time-series data from Bali Province, the analysis revealed that both foreign tourist arrivals and hotel occupancy rates exerted a positive, though statistically insignificant, influence on regional revenue. In partial terms, their effects were minimal. The findings suggest that Bali’s regional revenue is shaped not only by tourism but also by contributions from other economic sectors. Keywords: Foreign Tourist, Hotel Occupancy Rates, Regional Revenue, Tourism Copyright © ISRG Publishers. All rights Reserved. DOI: 10.5281/zenodo.17837850 222 stimulate economic growth. Therefore, the development of the tourism sector has become a top priority for many governments, particularly in developing countries. From a sociological perspective, the implementation of regional autonomy in Indonesia can be seen as a strategy with two main objectives [1]. First, granting regional autonomy aims to address local communities' desires regarding three key issues: the division of power, the distribution of income, and regional autonomy in management. Second, regional autonomy is designed to strengthen regional economies, in turn strengthening the national economy. Regional governments in Indonesia have implemented regional autonomy since 1999, as stipulated in Law No. 22 of 1999, which grants regional governments the right to create local policies in managing government affairs under their responsibility [2]. The implementation of these government affairs is carried out by the second-level regional government and the Regional People’s Representative Council (DPRD). Regional autonomy enables local governments to have the authority, responsibility, and rights necessary to manage and oversee governmental functions while also addressing the unique needs of their communities in accordance with existing laws and regulations. By implementing regional autonomy, the enhancement of public welfare can be achieved through improved service delivery, bolstered community empowerment, and increased public participation. One way to increase Regional Original Income (PAD) is to optimize the tourism sector’s potential. According to [3] the tourism sector is increasingly recognized as an economic driver, generating foreign exchange for development. Every tourism business strives to maximize profits by exploiting natural resources and presenting them as tourism products. Bali Province is an Indonesian province with international recognition. Its most attractive characteristic is its tourist attractions, which are highly sought after by foreign tourists. Tourists are typically consumptive and require goods and services directly during their visits. Furthermore, the community’s purchasing power also contributes to economic growth. The government has implemented various programs and development projects to boost Bali’s economy and private investment. Figure 1 Economic Growth Rate of Bali Province, 2018-2024 (Percent) Source: Central Statistics Agency of Bali Province, 2025 As shown in Figure 1, Bali Province’s economic growth rate fluctuated from 2018 to 2024. This increase in economic growth was due to rising visitor numbers to Bali, which in turn could boost several sectors. One of these is the potential for visitors to stay at hotels in Bali. The increase in tourist arrivals in Bali can increase Regional Revenue (PAD) from the tourism subsector [4]. PAD refers to the sources of income generated by local governments within their administrative areas. PAD plays a crucial role in financing local government activities. Data on Bali Province’s original regional income obtained from the Bali Provincial Statistics Agency can be seen in Table 1. Years Regional Revenue 2018 3.270,97 2019 2.497,84 2020 2.626,96 2021 2.472,94 2022 3.245,19 2023 3.914,55 2024 4.858,37 Table 1. Bali Province’s Original Regional Revenue (Billion Rupiah), 2018-2024 Source: Regional Revenue Agency of Bali Province, 2025 Table 1 shows data on Bali Province's original regional income over the past few years, which has fluctuated annually. Bali Province’s original regional income (PAD) in 2019 was 4 trillion rupiah, an increase from the previous year, supported by improved government consumption, investment, and foreign exports. Several leading indicators, such as increased passenger arrivals at Ngurah Rai Airport, also supported this condition. Subsequently, there was a 3-trillion-rupiah decrease in 2020 due to the spread of COVID19, which led to a decline in foreign tourist visits and in demand for consumption, investment, and exports. In 2021, PAD increased compared to the previous year. However, the value may not have returned to 2019 levels due to the government’s reopening of tourism, with most tourist visits domestic. As a key component of regional revenue, the tourism sector is strongly affected by the volume of tourist arrivals. The growth of a region’s tourism industry is largely determined by how many tourists visit, the duration of their stay, and the extent of their spending at various facilities. Tourism development serves as a vital driver of economic growth, creating a conducive and dynamic environment through effective management of business and tourism activities. In turn, it contributes positively to the regional economy and acts as a significant source of local revenue. The large number of tourists, coupled with the length of their stay at a tourist destination, naturally leads to an increase in hotel occupancy rates [5]. Hotel occupancy rates measure the number of rooms sold relative to the total number of rooms available for sale. The more hotel rooms sold, the greater the revenue the hotel management received. Conversely, if occupancy rates decline, tourism sector revenues will also decrease [6]. THE NEED AND IMPORTANCE OF THIS RESEARCH This research focuses exclusively on two determinants of regional original income: foreign tourist arrivals and hotel occupancy rates. This study focuses on regional original income because it is one of Copyright © ISRG Publishers. All rights Reserved. DOI: 10.5281/zenodo.17837850 223 the sectors with significant potential for regional economic growth through revenue generation. This research is a development of previous study conducted by [7] entitled ―Number of Tourists, Number of Hotels, and Number of Tourist Attractions on the Original Regional Income of Tuban Regency‖. The findings indicate that tourist arrivals had a positive and significant impact on Tuban Regency’s locally generated revenue during the 2006–2020 period. This study differs from earlier works in terms of its analytical focus and time frame. Specifically, the present research examines Bali Province over a 15-year period from 2010 to 2024. The study considers foreign tourist arrivals and hotel occupancy rates as independent variables, with regional original income serving as the dependent variable. The introductory discussion highlights that foreign tourist numbers and hotel occupancy rates are associated with regional income levels. LITERATURE REVIEW 1. Multiplier Effect Theory According to Ismayanti in [8], the multiplier effect of tourism on the economy is a characteristic of the tourism industry. In economics, the measurement of the multiplier effect is known as the incremental expenditure effect. The magnitude of the incremental expenditure effect is determined by the types of direct, indirect, and subsequent impacts that influence the consequences of an emergency. The incremental expenditure value indicates how much spending can increase economic activity at the local and national levels. This theory in the tourism sector explains how initial expenditure, including foreign tourist visits and hotel occupancy rates, will generate a multiplier effect in the local economy. When foreign tourists visit and stay at hotels, their spending not only directly benefits the tourism sector but also impacts other sectors such as transportation, services, and other local businesses. Money spent by foreign tourists circulates within the regional economy, providing additional income for local businesses and increasing local revenue through taxes, levies, and other related economic activities. 2. Tourism Spillane (1994) describes tourism as a short-term movement from one location to another, carried out by individuals or groups seeking balance, harmony, and satisfaction within social, cultural, natural, and scientific contexts. In contrast, Law No. 10 of 2009 on Tourism, Article 1, paragraph 3, defines tourism as a variety of travel-related activities facilitated by services and infrastructure provided by communities, businesses, the government, and local authorities. 3. Foreign Tourist Visits A visit is the act or event of visiting a place. [9] emphasize that the word ―tourist‖ refers to a person.) Therefore, foreign tourist visits are the total number of international tourists arriving in a region or country within a specific time period, whether for vacations, business, education, or other activities. Indicators of foreign tourist visits can be viewed from several perspectives, such as the number of foreign tourists visiting an area over a given period, the average length of stay of tourists during their visit, and the amount of their spending on products and services at tourist destinations. Tourism goals can be effectively achieved if development is carried out through a well-thought-out plan integrated with the region’s overall development. This is due to the strategic value and contribution of the tourism sector, encompassing economic, sociopolitical, cultural, regional, and environmental aspects. 4. Hotel Occupancy Rate A hotel is an establishment, trademark, or business entity that offers accommodation, food and beverage services, and various other amenities. These services are provided to the general public, whether they choose to stay overnight or merely use specific facilities. Accordingly, the hotel occupancy rate is calculated by dividing the number of room nights sold by the total number of room nights available[10]. If there are sufficient hotel rooms, visitors will be more willing to visit a place, especially if the hotel is comfortable. Therefore, because tourists stay longer, the tourism sector operating in the lodging industry, including hotels and other types of accommodation such as houses and guesthouses, will generate more revenue for the company[11]. 5. Regional Revenue According to Indonesia’s Ministry of Finance, Regional Original Revenue (PAD) refers to income obtained by regional governments in accordance with local and national regulations. This revenue encompasses all income sourced from local economic activities and collected based on regional regulations to support regional autonomy and enhance community welfare. Regional taxes and levies serve as vital revenue sources for financing local government functions, as regulated under Law No. 28 of 2009. This framework has been further updated through Law No. 1 of 2022 concerning financial relations between the central and regional governments, which outlines the types and objects of taxes and levies. RESEARCH METHODOLOGY AND RESEARCH APPROACH: This study uses a quantitative research approach, drawing on secondary data and literature analysis. Quantitative research is an approach grounded in a post-positivist paradigm that emphasises causal relationships and variable reduction. This method is applied to study specific populations or samples using standardized research instruments. Data collected are analysed statistically to test predetermined hypotheses, often utilizing descriptive and correlational research strategies requiring numerical data [12]. Conceptual Framework Figure 2 Research Conceptual Framework Source: Researchers, 2025 Description : Variables studied : Partially Influential : Simultaneous Influence Copyright © ISRG Publishers. All rights Reserved. DOI: 10.5281/zenodo.17837850 224 Drawing from the literature review and earlier studies, the conceptual framework for this research incorporates two independent variables—foreign tourist arrivals and hotel occupancy rates—and one dependent variable, namely the Regional Original Revenue of Bali Province for the period 2010– 2024. From this framework, the following research hypotheses are formulated: H1: Foreign tourist visits and hotel occupancy rates are suspected to influence Bali Province’s regional original revenue (PAD). H2: The number of foreign tourist visits is suspected not to affect Bali Province’s regional original revenue (PAD). H3: Hotel occupancy rates are suspected to influence Bali Province’s regional original revenue (PAD). Data Types, Sources, Research Sample and Population This method is particularly effective for receiving guidance from fellow researchers. In this process, authors regularly obtain or request feedback from their colleagues. Such input enhances the depth and quality of the paper by incorporating expert insights and updates. It also increases the researcher’s confidence and helps them take the next step toward writing and submitting their work to a journal. This study relies on secondary data. The data used were sourced from official records of the Bali Provincial Statistics Agency (BPS), the Bali Provincial Tourism Office, and the Bali Provincial Revenue Agency. These datasets consist of time-series information covering the years 2010–2024. The population of the study encompasses all information related to foreign tourist arrivals, hotel occupancy rates, and local revenue (PAD) in Bali Province. The sample consists of annual observations of these variables— foreign tourist visits, hotel occupancy rates, and regional original income—spanning 15 years from 2010 to 2024 Data Analysis and Hypothesis Testing Techniques This research employed multiple linear regression analysis using the Ordinary Least Squares (OLS) approach, processed with IBM SPSS (Statistical Package for the Social Sciences) version 27.0. Multiple linear regression was selected as the analytical method because it is designed to estimate how one or more independent variables affect a dependent variable. The form and Equation of the multiple linear regression for this analysis are as follows: Log Y = α + β1logX1 + β2logX2 + e Description: Y = Local Original Income α = Constant β1 β2 = Regression Coefficient X1 = Number of Foreign Tourist Visits X2 = Hotel Occupancy Rate e = Interfering Variable Hypothesis testing is a statistical technique used to determine whether a researcher’s hypothesis is accepted or rejected based on research data. The goal is to examine the relationship or influence between variables. Simultaneous Test (F-test) This test is conducted to determine whether the independent variables (X1, X2) have a simultaneous influence on the dependent variable (Y). The following test criteria are used: 1) If the significance value (Sig) is less than 0.05, the independent variables collectively exert a significant influence on the dependent variable. 2) If the significance value (Sig) is greater than 0.05, the independent variables do not have a significant influence on the dependent variable. Partial Test (t-test) This test evaluates the individual regression coefficients to determine whether each independent variable (X1 and X2) has a separate and significant influence on the dependent variable (Y). The basis for the decision is: 1) If the significance value (Sig) is less than 0.05, the null hypothesis (H0) is rejected, and the alternative hypothesis (H1) is accepted. This outcome indicates that each independent variable (X1 and X2) exerts a statistically significant partial effect on the dependent variable (Y). 2) Conversely, if the significance value (Sig) is greater than 0.05, the null hypothesis (H0) is accepted, and the alternative hypothesis (H1) is rejected, meaning that the independent variables (X1 and X2) do not have a statistically significant partial influence on the dependent variable (Y). Coefficient of Determination (R2) To evaluate how effectively the model accounts for variations in the dependent variable, the coefficient of determination (R²) test is employed (Suliyanto, 2011). The value of the coefficient of determination is obtained using the following equation: R2 = 1 - = Description: R2 = Coefficient of Determination ESS = Error Sum of Squares TSS = Total Sum of Squares RSS = Regression Sum of Squares The R-squared value in the coefficient of determination ranges from zero to one. An R-square value close to zero indicates that the independent variables have very limited or weak explanatory power over the dependent variable. Conversely, when the Rsquared value approaches one, it signifies that the independent variables provide a strong explanation of the variation in the dependent variable. RESULTS AND DISCUSSION One of the key drivers of economic development in Bali Province is the advancement of the tourism sector. As a dynamic industry, tourism has the capacity to accelerate economic growth by generating employment opportunities, raising household income, enhancing living standards, and stimulating activities in related sectors such as transportation, trade, accommodation, and creative industries [13]. Furthermore, tourism development contributes to increasing Regional Original Income through hotel and restaurant taxes, as well as various levies associated with tourism activities. As tourism’s role in the economic structure strengthens, its multiplier effect is felt by the wider community. The data below Copyright © ISRG Publishers. All rights Reserved. DOI: 10.5281/zenodo.17837850 225 shows the economic growth rate of Bali Province from 2010 to 2024, providing an overview of how the tourism sector shapes the region’s economic dynamics. Figure 3 Economic Growth Rate of Bali Province, 2010-2024 (Percent) Source: Central Statistics Agency of Bali Province, 2025 Figure 3 illustrates that Bali Province’s economic growth rate fluctuated between 2010 and 2024. In 2020, the province experienced negative growth, reflecting a sharp decline in economic activity caused primarily by the downturn in tourism, trade, and service sectors—industries heavily reliant on community mobility and tourist arrivals. Although growth began to recover, the rate remained negative in 2021. Regional economic performance is strongly influenced by overall economic stability, including inflation and deflation trends, household consumption patterns, and the contribution of each sector to Bali’s economy. Among the independent variables examined in this study is the number of foreign tourist arrivals, with time-series data spanning 15 years from 2010 to 2024. The following section presents the annual figures for foreign tourist visits to Bali: Years Number of Foreign Tourist Visit (%) 2010 2.576.142 - 2011 2.826.709 9,73 2012 2.949.332 4,34 2013 3.278.598 11,16 2014 3.766.638 14,89 2015 4.001.835 6,24 2016 4.927.937 23,14 2017 5.697.739 15,62 2018 6.070.473 6,54 2019 6.275.210 3,37 2020 1.069.473 -82,96 2021 51 - 2022 2.155.747 - 2023 5.273.258 144,61 2024 6.333.360 20,10 Table 2. The Number of Foreign Tourists in Bali Province (Persons), 2010-2024 Source: Central Statistics Agency of Bali Province, 2025 Between 2010 and 2024, international tourist arrivals to Bali Province fluctuated significantly, influenced by external factors such as the pandemic. At the beginning of the decade, visitor numbers were already in the millions, with approximately 6.27 million visits recorded in 2019, according to data cited in the annual report. However, when the COVID-19 pandemic hit the world, visitor numbers declined sharply in 2020 and 2021, reaching a very low 51 in 2021. A rebound began in 2022 and beyond. Entering 2023–2024, Bali’s tourism recovery is increasingly evident. Overall, the number of visitors in 2024 reached approximately 6,333,360, an increase from the previous year. Thus, Bali has successfully surpassed pre-pandemic visitor levels and is showing a strengthening trend as an important international tourist destination. Based on Table 4, the occupancy rate of star-rated hotels in Bali Province shows fluctuating trends from 2010 to 2024, in line with the dynamics of the tourism sector, changes in the number of tourist visits, and the performance of Regional Revenue derived from tourism. In 2010, the occupancy rate was 60.16%, and it increased to 63.23% in 2011, driven by stable foreign tourist arrivals and tourism promotion programs that boosted hotel revenue. From 2016 to 2018, the occupancy rate increased again, from 61.75% to 64.82%, driven by increased foreign tourist arrivals and various promotional activities and tourism events that successfully attracted tourists, contributing to increased PAD. The years 2020 and 2021 marked the most severe downturn for Bali’s tourism industry as the COVID-19 pandemic caused hotel occupancy rates to plunge from 28.71% in 2020 to just 12.53% in 2021. International border closures and strict travel restrictions led to an almost complete halt in foreign tourist arrivals, triggering a significant drop in tourism-generated regional revenue. By 2024, the occupancy rate had risen to 62.23%, nearing pre-pandemic conditions. This rebound indicates a full recovery of Bali’s tourism sector, a growing contribution to regional original revenue (PAD) from hotel and restaurant activities, and the normalization of foreign tourist flows. Years Occupancy Rate of Star-Rated Hotels by All Classes (%) 2010 60,16 - 2011 63,23 0,05 2012 63,21 0,00 2013 60,68 -0.04 2014 60,31 -0.01 2015 60,48 0,00 2016 61,75 0,02 2017 64,24 0,04 2018 64,82 0,01 2019 59,56 -0,08 2020 28,71 -0,52 2021 12,53 -0,56 2022 36,09 1,88 Copyright © ISRG Publishers. All rights Reserved. DOI: 10.5281/zenodo.17837850 226 2023 52,88 0,47 2024 62,23 0,18 Table 3. Occupancy Rate of Star-Rated Hotels by All Classes (%)in Bali Province, 2010-2024 Source: Central Statistics Agency of Bali Province, 2025 While the number of foreign tourists will also influence hotel occupancy rates, which will boost revenue from various tourism service fees managed by local governments, the magnitude of the additional PAD depends not only on the number of tourists but also on tax rates, collection effectiveness, length of stay, and the extent of tourist spending actually recorded in the formal sector, which forms the basis for taxes and fees [14] Based on the data in Table 4.7, the regional original revenue in 2024 was the highest among previous years, while 2010 was the lowest. Throughout 2010-2024, the realization that decreased compared to last year occurred in 2020. Years Realization of Bali Province's Original Regional Revenue (%) 2010 1.257,78 - 2011 1.518,92 0,21 2012 1.860,99 0,23 2013 2.234,47 0,20 2014 2.589,12 0,16 2015 2.642,17 0,02 2016 2.656,95 0,01 2017 2.918,79 0,10 2018 3.270,97 0,12 2019 3.497,84 0,07 2020 2.626,96 -0,25 2021 2.472.94 -0,06 2022 3.245,19 0,31 2023 3.914,55 0,21 2024 4.858,37 0,24 Table 4. Bali Province’s Original Regional Revenue (Billion Rupiah), 2010-2024 Source: Regional Revenue Agency of Bali Province, 2025 Realization of regional original revenue in Bali Province tends to increase annually, driven by tourism, which contributes to Bali’s regional original revenue through the consumption of transportation services and levies on business services at tourist attractions and lodgings. A large volume of foreign tourist arrivals serves as a key driver in increasing regional original revenue (PAD) through the tourism sector. Overall, tourism plays a crucial role in shaping the growth of PAD in Bali Province. The findings from the multiple linear regression analysis examining the independent variables—foreign tourist arrivals and hotel occupancy rates—and their relationship with the dependent variable, regional original revenue, are presented below. Figure 4 Results of Multiple Linear Regression Analysis Source: SPSS 27.00 Output (Processed Secondary Data, 2025) Based on Figure 4, the constant value (a) is 8.926, while the regression coefficients are 0.108 for b1 and –0.666 for b2. These values are then incorporated into the multiple linear regression equation as follows: logY = 8.926 + 0.108logX1 - 0.666logX2 + e Y = Local Revenue X1 = Number of Foreign Tourist Visits X2 = Hotel Occupancy Rate e = Confounding Variable The Equation resulting from the multiple linear regression analysis has the following meaning: 1. Constant = 8.926, indicating that if all independent variables, namely the Number of Foreign Tourist Visits and Hotel Occupancy Rate, are equal to 0, then the Local Revenue in Bali Province will be 8.926. 2. The coefficient for the number of foreign tourist visits is 0.108, indicating that if the number of foreign tourist visits increases by one percent, local revenue will increase by 0.108 percent, assuming other variables remain constant. 3. The regression coefficient for the hotel occupancy rate is –0.666, meaning that a one-percent increase in hotel occupancy is associated with a 0.666-percent decrease in local revenue, assuming all other variables are held constant. This indicates that hotel occupancy rates have a negative or inverse relationship with local revenue. Within the scope of this study, the F-test is employed to assess whether the variables—foreign tourist arrivals and hotel occupancy rates—jointly influence changes in Bali Province’s Regional Original Income (PAD) when analyzed in a single model. The outcome of this test indicates the extent to which these two variables, taken together, significantly contribute to explaining variations in PAD. Figure 5. Results of F-test Source: SPSS 27.00 Output (Secondary Data Processed, 2025) Model Unstandardized Coefficients Standardized Coefficients t Sig. B Std. Error Beta 1 (Constant) 8.926 1.062 8.404 .000 log_Jumlah_Kunjung an_Wisatawan_Asing .108 .077 .908 1.415 .183 log_Tingkat_Hunian_ Hotel -.666 .499 -.857 -1.336 .206 a. Dependent Variable: log_PAD Tabel 4. 9 ANOVA Model Sum of Squares Df Mean Square F Sig. 1 Regression .247 2 .123 1.008 .394b Residual 1.468 12 .122 Total 1.715 14 a. Dependent Variable: log_PAD b. Predictors: (Constant), log_Tingkat_Hunian_Hotel, log_Jumlah_Kunjungan_Wisatawan_Asing Copyright © ISRG Publishers. All rights Reserved. DOI: 10.5281/zenodo.17837850 227 Figure 5 presents the results of the F-test, which assesses the combined effect of foreign tourist arrivals (X1) and hotel occupancy rates (X2) on locally generated revenue (Y). The analysis yielded an F-value of 1.008 with a significance level of 0.394. Since this value is greater than the 0.05 threshold (0.394 > 0.05), the alternative hypothesis (H1) is rejected, and the null hypothesis (H0) is accepted. In addition, the calculated F-value is lower than the critical F-value (1.008 < 3.89), confirming that the independent variables (X1 and X2) do not jointly exert a significant influence on the dependent variable (Y). Table 4 shows the results of the partial t-tests, which examine whether each independent variable—foreign tourist arrivals (X1) and hotel occupancy rates (X2)—individually affects locally generated revenue (Y). The results indicate that neither variable has a significant partial effect, meaning that both variables do not significantly contribute to the model under investigation. 1) The regression results for foreign tourist arrivals (X1) show a t-statistic of 1.415 with a significance level of 0.183. Because the significance value (0.183) is above the 0.05 threshold and the calculated t-statistic (1.415) is lower than the critical t-table value of 2.178, the null hypothesis (H0) is accepted, and the alternative hypothesis (H2) is rejected. This outcome indicates that foreign tourist arrivals do not have a statistically significant effect on local revenue. 2) The hotel occupancy rate (X2) produced a t-statistic of – 1.336 with a significance value of 0.206. Since this significance value exceeds the 0.05 criterion and the calculated t-statistic (–1.336) falls below the critical ttable value of 2.178, the study accepts H0 and rejects H3. This result suggests that although the relationship between hotel occupancy rates and local revenue is negative, it is not statistically significant. The coefficient of determination is employed to indicate how well the independent variables account for or predict variations in the dependent variable. This measure reflects the accuracy of the regression model in capturing the relationship between the variables. Figure 6. Results of R-Square Source: SPSS 27.00 Output (Secondary Data Processed, 2025) According to the findings shown in Figure 6, the study produced a coefficient of determination of 0.144. This suggests that the independent variables—foreign tourist arrivals and hotel occupancy rates—explain only 14.4% of the variation in regional original revenue (PAD). Thus, their contribution to changes in PAD over the study period is relatively limited. The remaining 85.6% of the variation in PAD is attributed to other factors not captured in the model. CONCLUSION Based on the research findings, several conclusions can be drawn. 1. The simultaneous test (F-test) shows that the variables of foreign tourist arrivals (X1) and hotel occupancy rates (X2) collectively exert a positive but statistically insignificant effect on regional original income (Y) in Bali Province. Second, the coefficient of determination (R²) indicates that these two variables explain only 14.4% of the variation in regional original income. This suggests that foreign tourist arrivals and hotel occupancy rates do not significantly influence the regional original income (PAD) of Bali Province, implying that other factors outside the model play a more dominant role in determining Bali’s PAD. 2. The partial test (t-test) shows that the number of foreign tourist visits (X1) has a positive but statistically insignificant effect on Bali Province’s regional revenue (Y). This finding suggests that the number of foreign tourist visits is not a primary determinant of regional ownsource revenue (PAD). Other economic factors or policydriven variables appear to play a more substantial role in influencing PAD in Bali Province. 3. In this study, the hotel occupancy rate variable (X2) partially has a negative but insignificant effect on the regional revenue (Y) of Bali Province. This means that when the housing rate rises, the original regional income tends to decrease, and this relationship is not statistically strong. Although the hotel occupancy rate is low, the original regional income of Bali Province has not experienced a significant decline because it also comes from regional taxes such as motor vehicle taxes and motor vehicle transfer fees, which are often more stable. 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