This research addresses the discourse of tourism as a tool for place-making of urban destination. Relevant to the study of place-making is the analysis of the commoditization and localization process dependent upon the appropriation of urban landscape and local cultures. In the research, localization is interpreted as the act of determining the attributes of locality, while commoditization is defined as the process by which local attributes that have commercial potential end up in becoming tourism commodity. Following this, the commoditization of intrinsic cultural value is disseminated within a branding strategy and intervention reflecting social and political relations. Therefore, the research suggests that tourism place-making has not only been constructed through the top-down regulatory body, but has been also generated through the attributes of its locality. By utilizing the critical and constructivist paradigm, the research depicts the conditions of the localization and commoditization process in establishing the base line of its realization within the symbolic economy. Thus, a qualitative case study approach was adopted. The study area of this dissertation is Palembang, as one of the capital cities in Indonesia advancing in its overall urban development. To investigate urban tourism as a tool for development strategy, it is useful to investigate the role of tourism which embodies (1) spatial transformation; how tourism gives significant impacts on urban form, and (2) the socio-cultural aspect; how neighbourhood is related to tourism industry. The findings suggest that tourism place-making involves the reciprocity of urban dynamics: cities take on tourism as a reference model of development, and tourist areas adopt the proliferation of cultural lifestyle to meet the industry’s demands.