Understanding the changes in gross primary production (GPP), which is the total carbon fixation by terrestrial ecosystems through vegetation photosynthesis, due to land use conversion in a tourism city is important for carbon cycle studies. Satellite data from Landsat 5, Landsat 7 and Landsat 8 and meteorological data are used to calculate annual GPP for 1995, 2003 and 2014, respectively, using the vegetation production model (VPM) in the tourism city Denpasar, Bali, Indonesia. Five land use types generated from topographic maps in three different years over the past two decades are used to quantify the impacts of land use changes on GPP estimation values. Analysis was performed for two periods to determine changes in land use and GPP value as well as their speed. The results demonstrated that urban land development, namely, the increase of settlement areas due to tourism activity, had overall negative effects on terrestrial GPP. The total GPP of the whole area decreased by 7793.96 tC year −1 (12.65%) during the study period. The decline is due to the conversion of agriculture and grassland area into settlements, which caused the city to lose half of its ability to uptake carbon through vegetation. However, although forest area is declining, forest maintenance and restoration by making them protection areas has been helpful in preventing a drastic decline in GPP value over the past two decades. This study provides information that is useful for carbon resource management, tourism, policy making and scholars concerned about carbon reduction in a tourism city.