Tourism is a sector with the potential to boost the regional economy, yet its contribution to the Local Own-Source Revenue (PAD) of Klaten Regency remains relatively low despite the presence of Umbul (natural spring) tourist destinations that serve as a regional icon. This study aims to formulate a competitiveness strategy, analyze the influence of tourism business governance on destination competitiveness, and identify down streaming opportunities for Umbul tourism into value-added products and services. The study employed a mixed-method approach combining SWOT analysis, multivariate regression analysis, and down streaming analysis. Data were collected through a survey of 385 tourists, interviews with destination managers, field observations, and documentation studies at four Umbul tourist destinations in Klaten Regency. The results show that Umbul tourism is positioned in Quadrant I (growth strategy), with an IFAS value of 1.90 and an EFAS value of 2.00, indicating substantial strengths and opportunities for destination development. Regression analysis reveals that tourism governance has a strong and significant relationship with destination competitiveness (R = 0.745; p < 0.05). In addition, Umbul tourism holds down streaming potential through the development of educational tourism, underwater services, local culinary offerings, micro, small, and medium enterprises (MSMEs), cultural festivals, and integrated tour packages. These findings indicate that strengthening governance, enhancing human resource capacity, and developing the tourism value chain can improve competitiveness and generate broader economic value added for the community.