City Economy, Local Finance, Employment and Multiplier

Abstract

Decentralization encourages local administrative organizations to develop public services and create new tourist attractions to stimulate the urban economy. This study examined a local investment project initiated by the Roi Et Municipality as a case study, known as the “Ho Wot Tower Project,” a 101-meter-high tower with a total investment budget of 428 million baht from multiple sources, including partial borrowing. The objectives of the study were: (1) to analyze the investment project of Ho Wot Tower in terms of revenues, investment costs, operational expenses, and financial returns to the municipality, as well as to examine spillover effects on the urban economy through surveys of tourist expenditures and income generated for hotels and shops within the municipality; and (2) to analyze the economic impact on the city of Roi Et by applying the concepts of spillover effects and local multiplier analysis. This survey research collected data from 300 tourists, 90 shops and businesses, and 20 accommodation establishments using accidental sampling.

The findings revealed that (1) the Ho Wot Tower attracts 676,152 visitors per year, with 51% being local tourists from Roi Et and 49% from other provinces. Hotels reported an occupancy rate of 65% on weekends and 55% on weekdays, while shops had an average daily revenue of 17,383 baht per shop. The project generated total annual revenue of 21 million baht and total expenses of 20 million baht over the past five years, resulting in a net income of 1 million baht accumulated in a fund for future investment and development. (2) The urban economic impact, measured through spillover effects both within and outside the municipality, showed a range of local multipliers: a minimum of 1.42, a maximum of 4.26, and a median of 2.84. These findings provide a new approach for other local administrative organizations to stimulate urban economies through tourism investment by developing accounting and financial data systems, separating social enterprise accounts, and integrating complementary tourism resources to create sustainable economic value.