Google defaults Search campaigns to 'People in or regularly in your targeted locations', which sounds fine until you open the location report. A local service business in a big city can end up paying for clicks from people who were just passing through, or who are planning a trip somewhere else entirely. 'Presence only' cuts that, but it also cuts people who are planning a visit or researching a service they'll buy later.
My take: for a plumber or a dentist, presence only is almost always right, because the job happens where the customer is. For a hotel or a tour operator, interest can be worth the extra waste, since the search is often the research step. Either way, look at the report by 'Matched location' rather than the campaign total before you change anything. Has anyone seen interest-based targeting pay off for a local business?