Participation of Balinese Toward Tourism and Its Impacts: Case Study at and Areas of ,

Eka N. Kencana Department of Mathematics – , Badung 80361, Indonesia – [email protected]

Abstract

This essay is aimed to study the influencing factors for people participation in tourism activities. Due to an important element for implementing tourism sustainability, participation of local people in tourism activities and development has been studied by scholars from various disciplines. However, researches attempted to analyze the determinant of participation are very rare. In order to contribute for this gap, we studied the government’s role and tourism industries behavior that are positioned as two antecedent factors for Balinese people participating in tourism at Kuta and Nusa Dua, two famous destinations in Bali. Applying structural equation model (SEM), longitudinal data from 64 community leaders at both destinations were gathered in June 2015 and September 2016 and analyzed. The results showed government’s role significantly affects local participation and behavior of tourism industries. However, the behavior of tourism industries did not show significant effect on local participation. In addition, participation of local people at both areas had effect in increasing the benefit and reducing the cost related to tourists’ activities, significantly.

Keywords: community participation, SEM, sustainability, tourism.

1. Introduction Tourism and its related sectors are considered and argued have many potentials to reduce poverty, create jobs and increase income of local people, as well as to foster regional and/or national economic growth. Refers to these arguments, many countries intensify their tourism development including Indonesia. According to the Data and Information Center of Tourism Ministry of Indonesia, in 2014, Indonesian’s tourism ranks fourth after the oil & gas, coal, and palm oil in forming Gross Domestic Product (GDP). In addition, refers to World Travel & Tourism Council (WTTC), direct contribution of tourism and its related sectors for Indonesian’s GDP in 2014 is accounted for 325.47 trillion rupiahs or 3.2 percent of total GDP (WTTC, 2016). Refers to Accountability Report of Tourism Ministry for year 2015, direct contribution of tourism and its related sectors is bigger than previous year. In 2015, this contribution is accounted for 461.36 trillion rupiahs, approximately 4.23 percent of Indonesian GDP (KEMENPAR, 2016). Province of Bali, as one region of Indonesia, has very limited number of natural resources. Refers to this fact, regional development of Bali is heavily based on two sources i.e. tourism and its related sectors as well as agriculture in wider aspect. According to Statistics of Bali Province, at the end of year 2015, both sectors contribute to Gross Domestic Regional Product (GDRP) of Bali as much as 43.94 trillion rupiahs, 34.03 percent of Bali’s GDRP that is accounted for 129.14 trillion (based on constant price in year 2000). From these two pillars and support by others sectors, economic’s growth of Bali is bigger than national growth for period 2013-2016, constantly (BPS Provinsi Bali, 2016). Balinese people have a long story regarding tourism development at this small island. According to Picard (1986), Bali tourism has been started inline with Indonesian tourism development by the Dutch Collonialist who inititated “Official Tourist Bureau” at Batavia on 1908. Promoting as “The Gem of the Lesser Sunda Isles”, Bali started to visit by many tourists and respected for its unique traditions and culture. Since that year, number of tourists visited Bali increase drastically from 35 915 people in 1964 (Francillon, 1979, p.11) to 4 904 174 visitors at end of year 2016. Figure 1 represents number of tourists’ arrival and its growth for period 1969-2015.

Figure 1. Number of Foreign Tourists to Bali and Indonesia, Period 1969-2015 (Source: Bali Tourism Office, 2016)

Despite of its contribution to economies of Bali as an integral part of Indonesia, tourism in this province also raise some negative issues. For example, Kencana and Darmayanti (2015) noted, although local people at Kuta and Nusa got some economies’ benefits from tourists’ activities at their areas such that increase of job opportunities as well as chances to develop small tourism-related businesses, they aware of the burden costs for this dimension such as the increasing price of land and properties. The cost burden also arose for sociocultural and environtmenal dimensions. For these dimensions, local people felt the quality of their daily live decrease because of traffic congestion, the increase number of crime, unhandling of litter and waste, as well as the tranformation of agricultural land to non-agricultural usage. The respondents on their research, local community leaders at both areas, felt tourism and its activities are the primary agents for the raising of criminality and other social destructions at their villages. If these negative impacts could not be solved wisely, than it will affect the continuity of tourism at Kuta and Nusa Dua areas. In brief, tourism and its related sectors are considered have huge potencies to fight poverty and foster regional and/or national development; but on other side, this raising industry also is believed bring negative effects toward the the quality of life of people at the destination (Sproule, 1998; Mowforth & Munt, 2009; Sebele, 2010; Untong et al., 2010). To foster tourism sustainability, many scholars argue community-based tourism (CBT) is the best candidate to apply tourism development. CBT can be understood as local people take active roles in tourism development in order to get benefit as well as to protect their identities such as norms and values and their environtment (Kates et al., 2005). This work is directed to study the involvement of local people at Kuta and Nusa Dua areas, two famous tourist destinations in Bali, and their perception regarding the benefits and the burden of cost arose from tourists’ activities and development at these destinations. The role of local government and the behaviour of tourism industries at Kuta and Nusa Dua areas to foster participation of local people were also studied in order to improve the CBT’s implementation at these areas.

2. Short Literature Review In the last-two decades, CBT’s paradigm becomes a mainstream in tourism development can not be separated from the raising concern of development agents to improve the participation of local people in order to reduce the negative tourism impacts. According to Scheyvens (2002), tourism development approach in the 1970s been criticized because it focused on market-led and/or state-oriented controlled and less attention on local people. At the same time, neopopulist approaches to development emerged that shift the paradigm from state- or market-oriented into people-oriented that focus on people empo- werment thorough community capacity building. This thought brought the concepts of sustainable tourism. Refers to World Tourism Organisation (UNWTO, 2013), sustainable tourism is “tourism that takes full account of its current and future economic, social and environmental impacts, addressing the needs of visitors, the industry, the environment and host communities”. It is clear from this definition that CBT has to be viewed from three dimensions i.e. (a) time dimension (‘now’ and ‘future’), (b) institution (local institution, government, industries including visitors), and (c) aspects of development (economic, social, and environment). Previously, in 1996 J. Brohman stated that “community-based tourism development would seek to strengthen institutions designed to enhance local participation and to promote the economic, social, and cultural well-being of the popular majority” (Brohman, 1996, p.60). Refers to his argument, enhancing local participation in tourism development is very crucial to assure its sustainability. Although the principles underlying local participation might be easy to understand, however the implementation of this concept is more complex than it sounds. Firstly, difficulties to define it in term of its implementation because it has been used in various development themes by development agents with various backgrounds and perspectives (Cohen & Uphoff, 1980; Tosun & Timothy, 2003). Se- condly, as noted by United Nations (1985) cited in Tosun & Timothy (2003), community participation “can best be understood in the context of specific country and its political and socioeconomic system”. This argument implies the successfulness to foster local participation in one destination can not be directly applied to another destination without take concern regarding the local system. According to Connell (1997) cited in Okazaki (2008, p.511), community participation in tourism planning “is not only about achieving the more efficient and more equitable distribution of material resources: it is also about the sharing of knowledge and the transformation of the process of learning itself in the service of people’s self-development”. From Connell’s perspective, equitable distribution regarding the benefit and cost of tourism development was not the only objective, but it is important to share the knowledge and learning process for local people regarding tourism development. Two actors that are argued responsible to educate local people are local government as well as tourism industries. Government and tourism industries have important roles to realize sustainable tourism because government has political power and business sectors control capital needed in tourism development. Thus, to empower local people thorough increase people knowledge and their opportunities in tourism activities, government roles and behaviour of industries at the destination are important issues. Our study conducted at Kedonganan Beach, center of culinary tourism in Bali, showed local government roles that is formed by distributive (financial and infrastructure) and regulative roles had significant effect on economies’ condition of local people (Mertha et al., 2015).

3. Research Method A. Conceptual Research: Model and the Hypotheses To study the participation effects’ of local people at Kuta and Nusa Dua areas on their perceive impacts towards the economies, sosiocultural, and environtment aspect, quantitative method is applied in this work. We positioned local government role and industries behaviour as two exogenous latent variables in our conceptual model as depicted in Figure 2:

Figure 2. Conceptual Research Model and the Hypotheses

Nine hypotheses were built to elaborate causal relationships between latent variables, i.e.: H1 : Local government roles affect local industries behaviour; H2 : Local industries behaviour affect participation of local people to promote tourism sustainability; H3 : Local government roles affect participation of local people to promote tourism sustainability; H4a : Participation of local people affect the sociocultural benefits for community members; H4b : Participation of local people affect the economies benefits for community members; H4c : Participation of local people affect the environtment benefits for community members; H5a : Participation of local people affect the sociocultural costs for community members; H5b : Participation of local people affect the economies costs for community members; and H5c : Participation of local people affect the environtment costs for community members.

B. Population, Sample of Respondents, and Research Instrument Population in our work is formal and informal leaders at Kuta and Nusa Dua areas. The community leaders were chosen as our respondents because we believed they represent the local people and have knowledge about various tourism aspects at their areas. Respondents as much as 64 leaders were selec- ted proportionally based on number of traditional villages at Kuta and Nusa Dua. To collect data, questionnaire with 5 Likerts’ scaled option for was designed. In order to study the change of people perception regarding the impacts of their participation, data collecting was done twice. The first survey was conducted on June 2015, and the second one was done on September 2016.

C. Data Analysis Before the questionnaire is used to collect data, a pilot test was conducted on April 2015 to evaluate its reliability and statements’ validities. This test was done by distributing it to 28 local leaders at Sanur, another favourite (beach) destination in Bali. The data from pilot test then is analyzed to assess the quality of questionnaire. Refres to Nunnaly (1975), one set of items are considered has internal consistency if the Cronbach’s alpha is equal or greater than 0.70 although for exploratory research, as long as the alpha coefficient value is greater than 0.60 is acceptable (Hair et al., 1995, p.641). The second criterion to assess the quality of questionnaire is its item’s validity. An item is assumed valid if its correlation with total items of the same construct is greater than 0.30 as the lowest limit (Churchill, 1979). After verifying the quality of our questionnaires, then primary data for this work is collected. Each respondent is asked to give his/her perception by choosing the appropriate answer. As mentioned previously, data collecting is conducted twice. Each data set is used to estimate the path coefficients in the inner model as depicted on figure 2. 4. The Results & Discussion A. Profile of Respondents Because time-lag between the first data collection and the second one relatively short, respondents in our work at the second data collection the same as the first. Descriptively, 87.5 percent respondents are male and have been completed their diploma’s education. Their ages in the range of 28 – 69 years old with the average is 48.13 years. All of our respondents have been living at Kuta or Nusa Dua areas at least for 15 years with the average are 47.18 years. From these facts, we concluded that our respondents were properly represent the local people at Kuta and Nusa Dua areas and well-known regarding the tourism development and its impacts at both areas. B. Validity and Reliability Test Our model as depicted on figure 2 consists of nine latent variables. Except for environtment bene- fit that is measured by single item (the growing concern of people to protect their environtment), other latent are measured at least by two items. Table 1 listed items validity and latent’s reliability. Table 1. Items’ Validity and Latent Reliability Latent Variable Code Description Correlation GO01 Showed high commitment to accommodate people voice 0.799 GO02 Combine top-down and bottom-up approach 0.796 Government GO03 Effective regulation has been developed 0.815 Roles α = 0.930 GO04 Effective regulation has been implemented 0.869 GO05 Enhancing local participation in tourism development 0.802 GO06 Enhancing local organization in tourism development 0.698 BB01 Prioritization of local people for worker recruitment 0.592 Business BB02 Waste has been properly managed 0.590 Behaviour BB03 Respect and honour local values 0.655 α = 0.802 BB04 Actively contribute to keep destination safe 0.631 BB05 Financially contribute in ritual and cultural ceremonies 0.514 PP01 Local community get involved in tourism planning 0.830 PP02 Local community get involved in monitoring tourism 0.816 People development Participation α = 0.943 PP03 Local organization get involved in tourism planning 0.923 PP04 Local organization get involved in monitoring tourism 0.888 development

Table 1. (Continue) Latent Variable Code Description Correlation EB01 Tourism creates job for local community 0.830 Economies EB02 Tourism creates business opportunities for community 0.847 Benefits EB03 Tourism increases income for community 0.837 α = 0.870 EB04 Tourism increases quality of public infrastructure 0.858 EB05 Tourism increases quantity of public infrastructure 0.839 Socio-cultural SB01 Stronger appreciation of the public on their traditional values 0.754 Benefits α = 0.860 SB02 More protected and preservation of Hindu shrines 0.754 Economies EC01 The rising prices for daily goods and services 0.802 Costs EC02 The rising prices of properties and rental houses 0.614 α = 0.759 EC03 he increasing of business competition 0.630 SC01 The increasing of waste and trash that is unmanaged 0.799 SC02 Deterioting of public spaces 0.806 Sosio-cultural SC03 The increasing of water pollution 0.802 Costs SC04 The increasing of air pollution 0.821 α = 0.829 SC05 The decreasing of life comfort of local people 0.783 SC06 The decreasing of agricultural land because of conversion 0.798 NC01 The eroding of traditional activities 0.863 NC02 Worsening social behavior of local people 0.872 Environtment NC03 The waning of traditional building design 0.853 Costs NC04 The commercialization of the local culture 0.865 α = 0.887 NC05 Rising crime rates 0.865 NC06 Increasing public discomfort 0.883 Source: Own primary data (2015)

Table 1 shows 8 latent variables on the model have alpha coefficient is greater than threshold value as suggested by Nunnaly (1975). The greatest and the least alpha’s weres found on people participati- on constructs and economies costs as much as 0.943 and 0.759, respectively. In addition, all items on respective constructs have correlation values greater than 0.30, which indicated theses constructs were appropriately measured. Refers to the validity and reliability analysis, we conclude the questionnaire for this work is qualified to use in final data collecting. The operational model in our research is depicted on Fig. 3. C. Outer Model Analysis Basically, a structural equation model (SEM) is built by two sub-models i.e. measurement or outer model, and structural or inner model (Hair, Jr. et al., 2014). An outer model represents the causal rela- tions between latent and its indicator, while an inner model represents the causal relationships between latent variables are involved. For outer model analysis, because all of the items in the model are reflective of their respective construct, we checked the composite reliability (CR) and average variance extracted (AVE) for each of latent variables, and evaluate the factor loading as well as its significance for each of indicators. Refers to Hair et al. (2012) and Hair, Jr. et al. (2014), to say one construct has internal consistency if its AVE ≥ 0.50 and its CR ≥ 0.708. In addition, the factor loading for all of the items on a spesific construct have to significant (Peng & Lai, 2012). Refers to these threshold values and guidance, the outer model analysis’ result that is conducted by applying bootstrap procedure available in SmartPLS 3.0 software (Ringle, 2015) is listed on Table 2.

Figure 3. Operational Research Model

Table 2. The Result of Outer Model Analysis Latent Variable AVE CR Code1 Factor Loading p-Value GO01 0.856 0.000 GO02 0.855 0.000 GO03 0.877 0.000 Government Roles 0.742 0.945 GO04 0.915 0.000 GO05 0.877 0.000 GO06 0.784 0.000 BB01 0.719 0.000 BB02 0.779 0.000 Business Behaviour 0.569 0.868 BB03 0.819 0.000 BB04 0.795 0.000 BB05 0.646 0.000 PP01 0.907 0.000 PP02 0.888 0.000 People Participation 0.855 0.959 PP03 0.961 0.000 PP04 0.942 0.000 EB01 0.904 0.000 EB02 0.835 0.000 Economies Benefits 0.692 0.918 EB03 0.819 0.000 EB04 0.754 0.000 EB05 0.840 0.000 SB01 0.754 0.002 Socio-cultural Benefits 0.842 0.902 SB02 0.754 0.002

Table 2. (Continue) Latent Variable AVE CR Code1 Factor Loading p-Value EC01 0.899 0.000 Economies Costs 0.660 0.853 EC02 0.762 0.001 EC03 0.769 0.000 SC01 0.543 0.049 SC02 0.515 0.081 SC03 0.886 0.012 Sosio-cultural Costs 0.428 0.800 SC04 0.232 0.533 SC05 0.797 0.006 SC06 0.730 0.009 NC01 0.738 0.000 NC02 0.777 0.000 NC03 0.892 0.000 Environtment Costs 0.634 0.912 NC04 0.846 0.000 NC05 0.806 0.000 NC06 0.702 0.000 1 Meaning of code refers to Table 1

Table 2 showed, except for socio-cultural costs latent variable, all the others constructs have AVEs and CRs values greater than the suggested value. Despite of its AVE slightly less than 0.50 as required, the convergent validity for socio-cultural constructs is greater than 0.708 as threshold value. In addition, five out of six indicators for this construct has factor loading which is significant or quasi- significant. Based on these findings, we concluded the inner or structural final model is worth to be analyzed. D. Inner Model Analysis Basically, a structural equation model (SEM) is built by two sub-models i.e. measurement or outer model, and structural or inner model (Hair, Jr. et al., 2014). An outer model represents the causal rela- tions between latent and its indicator, while an inner model represents the causal relationships between latent variables are involved. Because of PLS-SEM assumes free-distribution for variables on the model, inner model assessment is done by applying non-parametrical technique through bootstrapping procedure. Assessment of inner model should evaluates the AVEs, coefficient of determination (R2) of endogenous latent variables with number of indicators at least 2 items (Vinzi et al., 2010 cited in Henseler & Sarstedt (2013, p.570) , significance of path values, and goodness of fit (GoF) of model. Table 3 listed the R2s, AVE, and number of indicators for latent variables in our model. Table 3. The Assessment of Inner Model Number Endogenous Latent Variable R2 AVE of Items Business Behavior 5 0.550 0.569 People Participation 4 0.262 0.855 Economies Benefits 5 0.150 0.692 Socio-cultural Benefits 2 0.324 0.842 Economies Costs 3 0.119 0.660 Environment Costs 6 0.118 0.634 Socio-cultural Costs 6 0.065 0.428 Source: Analyzed from primary data (2016)

Unlike covariance-based SEM which provided global goodness-of-fit (GoF) measure, the GoF model for PLS-SEM have to be approximated by applying formula that is introduced by Tenenhaus et al. (2005) as follows:

GoF = ���. �! (1) In eq. (1), ��� and �! represent the weighted average of AVEs and R2s with weight is number of items. By eliminating AVE and R2 values for environtment benefits in calculating eq. (1) we got GoF value as much as 0.370. We argue this value is sufficient to conclude the model is quite good to study the causal relationship among government roles, business behaviour, people participation towards the impacts of tourism activities. The structural model with its estimates for these relationships is shown on Fig. 4.

Figure 4. Research Model and The Estimated Parameter

E. Discussion As mentioned previously, two data collecting period were conducted in this work. We analyzed two data set separately because of no technique currently available to analyze structural equation model for two or more data set simultaneously, that can be conducted easily on panel data by many econometrics techniques.

Regarding the hypotheses about effects of government role on business behaviour (H1) and people participation (H3) in optimizing the positive and minimizing the negative impacts of tourism at Kuta and Nusa Dua area, both hypotheses were supported by two data set. Local government significantly affects business behaviour through setting local regulation that have to follow by businesses. In addi- tion, by hearing local people voice and empowering local institution in tourism development, people perceived their local government successfully increase people participation. This finding inline with previous research is done by Pillora & McKinlay (2011) that stated “… it is important to engage communities in decision-making over the delivery of important services at the local level.”. By hearing and empowering local people and their institutions in development process, then, acccording to Organisation for Economic Co-Operation and Development (OECD), good governance as a concept in sustainable development arise. Good local governance should be initiated by local government and it will assure the corruption is minimized, the views of minorities are considered, and their voices are heard in decision-making process (OECD, 2001). By accepting H1 and H3, we concluded the local government roles had been properly regulated tourism industries at Kuta and Nusa Dua areas and positively affect people participation as the cornerstone of good local governance.

In addition, we also found that H4a, H4b, and H4c were accepted. Local community participation proved significantly affects tourism impacts on the positive sides. The more local people get involved on tourism development, the more positive impacts they may feel. For two data set, we also found the most aspect they perceive was reflected on socio-cultural benefits, follows by economies benefits, and the last environmental benefits. Besides of its, people participation will significantly reduce negative impacts of economies and environmental dimensions. Briefly, our findings about the effects of local participation on tourism impacts are inline with some similar researches. Yaman and Mohd (2004) in their work stated by empowering local people, community-based tourism that is characterized by participation of local people will reduce negative impacts and concentrate the benefits of tourism locally. As noted by Tosun that the more local communities benefit from tourism, the more likely they will be to protect area’s natural and cultural heritage (Tosun & Timothy, 2003, p.5).

For year 2015 (represented with number 2015 in each of path coefficients), 3 out 9 hypotheses (H2, H4c, and H5a) did not support by the data. There is no evidence that behaviour of tourism and its related industries can affects the participation of people at Kuta and Nusa Dua areas. Despite of all indicators of this latent variable are significant, careful examination of 5 factor loading as listed on Table 2 indi- cates local people perceived and judged tourism industries financially contribute in ritual and cultural ceremonies does not satisfied their expectation (BB05 has the least loading) although local people felt these industries already respect and honour local values and norms (BB03 has the highest loading). Meanwhile, for year 2015 as well as year 2016, participation of local people does not prove give significantly benefits for their environment (H4c was rejected for both year). The interesting finding is the increase of path values for this causal relatinship. In year 2016, although does not significant, the effect of people participation on environment benefit as much as 0.200 is greater than it is found in 2015 as much as 0.136. We believe to make people participation give benefit for their environment, time length of participation is crucial issue. The more they participate, then the more likely they will safe their environment. Another interesting finding to discuss is the effect of people participation on socio-cultural costs. In 2015, the path coefficient for this causal relationship is -0.255 (p-value = 0.407). Although not statisti- cally significant, we knew local people may reduced the negative impacts for socio-cultural dimension through their participation, especially by involving local organizations in tourim planning and monitoring tourism development, 2 items with highest loading values. However this effect decrease to -0.193 in 2016. The reason for this finding is whenever people felt their efforts fail to reduce socio- cultural negative impacts, then they tend more passive than before. 5. Conclusion Community participation is key factor in promoting sustainable tourism. In spite of its importance, the determinants of community participation and their effects are quite scarce. In this research we showed local government roles significantly affect local community participation and tourism industries behavior whereas industries behavior does not affect people participation regarding the sustainability of tourism at Kuta and Nusa Dua areas, southern of Bali. The formal and informal leaders at both areas perceive local government has been successfully regulates tourism industries to do their businesses properly relates to implement sustainable tourism development. Furthermore, community leaders also appreciate local government in promoting participatory tourism development by combining government wants and communities needs, hearing and considering people voice, and empowering local bodies to take parts in tourism activities. However, behavior of tourism businessess at these area does not successfully affect local participation. We believed this insignificant effect arose from facts i.e. (a) most of tourism businessess are owned and controllod by non-local people, and (b) tourism industries at these area are in mature stages. Refers to the findings of our work, we suggest tourism development agents at Kuta and Nusa Dua areas to focus their efforts and resources, in building sustainable-community-based tourism (SCT), on positive and negative impacts of tourism in all of three sustainable dimensions. In order to enhance and to empower local people capabilities in tourism activities, social structures and cultural fabrics are important aspects to consider as well as to increase their abilities to apply soft technologies such as knowledge, information, financial, and entrepreneurial capabilities in tourism development.

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