Economic impacts of K-pop event tourism: a CGE-based assessment of IU’s concert in Indonesia

Purpose This study evaluates the economic impacts of a K-pop event tourism recently held in Indonesia, namely IU’s “H.E.R. World Tour 2024” concert. Design/methodology/approach This study aims to measure the extent to which concert-related expenditures stimulate GDP growth, create jobs and build intersectoral linkages between urban and rural areas using the recursive dynamic computable general equilibrium (RD-CGE) model. Through a hands-on survey targeting 267 concert visitors and 32 local business actors, this study captured the direct, indirect and induced effects to improve the accuracy of the CGE model. Three simulation scenarios were applied to test the robustness of the estimates. Findings Event tourism boosted macroeconomic impacts with 0.0019% of GDP in the baseline scenario, equivalent to IDR 418.65 billion at current prices. In addition, this event created jobs in the transportation, accommodation and food service sectors and had a positive impact on household welfare across both rural and urban groups, with relatively greater gains among higher-income households. Research limitations/implications The RD-CGE model used has not fully captured economic dynamics from pre-event to post-event and remains limited at the micro level for event business actors and individual visitors. Practical implications In practice, evaluating the concert's economic impacts within the broader economic system, through extensive service networks, provides a more comprehensive view. Their success is highly contingent upon the ability to absorb, expand, and sustain the surge in demand. Therefore, supply-side policies such as strengthening transportation and accommodation infrastructure and governance through efficient licensing and coordination among the government, promoters and venue managers are needed. It ensures that tourist visits and spending do not stop at concerts and that the benefits do not focus on dominant actors. Social implications Socially, the economic structure determines the economic impacts of international events. These benefits tend to be greater for households connected to the non-agricultural economy. Conversely, subsistence households and less connected regions tend to receive fewer benefits. Without policy design that consciously promotes inclusion, large events like these risk reinforcing pre-existing inequalities. Because the impact of concerts is often an adjustment of the local economic structure rather than an addition to pure and equitable growth, concrete steps are needed to ensure a more equitable distribution of prosperity across all levels of society. Originality/value This study quantifies how concert-related expenditures stimulate GDP growth through production, generate employment, improve household welfare and create intersectoral linkages between urban and rural areas. This study extends existing tourism event research by embedding K-pop events within a macroeconomic modeling framework and testing the robustness of estimated impacts across alternative simulation scenarios. In practice, it provides evidence for policymakers to evaluate the role of large-scale concerts in labor absorption, the empowerment of micro, small and medium enterprises (MSMEs) and the development of the creative economy.