Policy Innovation in Urban Tourism Development for Increasing Local Own-Source Revenue: Evidence from Pekanbaru City, Indonesia

Abstract

Urban tourism has increasingly become a strategic policy instrument for local governments seeking to diversify economic resources and strengthen local fiscal capacity. This study examines policy innovation undertaken by the Pekanbaru City Government in increasing Local Own-Source Revenue through urban tourism development. The research employs a qualitative descriptive-analytical case study design, focusing on the formulation, implementation, and evaluation of tourism-related policy innovation in Pekanbaru City, Riau Province, Indonesia. Data were collected through in-depth interviews, documentation, and literature review. The informants consisted of local government officials, tourism destination managers, and visitors who were directly or indirectly involved in the urban tourism policy ecosystem. Data were analysed using NVivo through word frequency, word cloud, open coding, matrix coding, and project map analysis. The study applies Rogers’ diffusion of innovation framework, consisting of knowledge, persuasion, decision, implementation, and confirmation stages. The findings show that Pekanbaru City has initiated several forms of policy innovation, including the development of urban tourism destinations, cultural events, culinary tourism, digital-based promotion, and multi-stakeholder collaboration. However, the effectiveness of these innovations remains constrained by limited budget allocation, weak inter-agency coordination, insufficient human resource capacity, incomplete tourism infrastructure, and relatively low community participation. The study proposes a staged centrifugal policy innovation model, supported by bureaucratic reform and collaborative governance, as a strategic framework for strengthening sustainable urban tourism and increasing local revenue. The study contributes to public policy and urban tourism literature by showing that tourism-based fiscal innovation requires not only attractive destinations but also adaptive bureaucracy, integrated planning, and institutionalized collaboration among government, private actors, communities, academia, and media.