Local Governance and Sustainable Tourism Development through Village-Owned Enterprises: Evidence from Coban Srengenge Ecotourism, Malang Regency, Indonesia

Abstract

Sustainable tourism development in rural areas increasingly depends on the effectiveness of local governance arrangements and the institutional capacity of community-based organizations. In Indonesia, Village-Owned Enterprises (Badan Usaha Milik Desa/ BUM Desa) are designed as key governance instruments to manage local economic assets and support sustainable development goals. This study examines how local governance practices shape the sustainability of village-based ecotourism through a case study of Coban Srengenge Ecotourism in Malang Regency. The study employs a qualitative descriptive approach. The data capture governance-related aspects, including institutional roles, financial capacity, participation mechanisms, and strategic visions for tourism development. Thematic analysis was applied to identify key patterns and constraints influencing the sustainability of tourism initiatives. The findings reveal that while BUM Desa possesses a clear developmental vision and formal authority to manage multiple business units, the sustainability of Coban Srengenge Ecotourism is constrained by limited financial resources, dependence on a single active business unit, and weak integration of youth participation. The tourism unit has remained inactive following the COVID-19 pandemic, highlighting governance challenges related to resource mobilization and adaptive capacity. Nevertheless, the strong commitment of local actors indicates potential for sustainable tourism development if supported by improved governance structures and diversified funding strategies. This study contributes to the governance and sustainable development literature by providing empirical evidence on how local institutional constraints and capacities affect community-based tourism sustainability in rural contexts.