Previously, the Indonesian government already named Labuan Bajo one of its ten priority destinations in terms of tourism, particularly ecotourism. However, it is estimated to require about USD $1.2 billion worth of investment to make public facilities (for example a shopping center or an internationally accredited hospital), private facilities and infrastructure on par with Bali. Such development is envisaged to attract around 500,000 tourists by 2019, up from the 54,147 tourists that visited Labuan Bajo in full-year 2013. As each tourist is estimated to spend USD $500 during his or her trip in - and around - the town, it will boost foreign exchange earnings and generate employment for the local population.

Dadang Rizki Ratman, Deputy for Tourist Destination & Industry Development within Indonesia's Tourism Ministry, said the government can only contribute between 30 - 50 percent of the targeted USD $1.2 billion to develop Labuan Bajo as the gate for ecotourism in the Nusa Tenggara Timur province. The remainder should be funded by the private sector.

Ratman added that the total of USD $1.2 billion is divided into two portions: (1) government investment for the development of basic infrastructure, and (2) private investment for the development of areas and facilities that will attract tourists (including hotels, home-stays, and restaurants). The basic infrastructure, which is the responsibility of the government, primarily aims at enhancing inter- and intra-connectivity in and around the town (upgrading roads, the airport and port, but also irrigation as well as the water supply system are on the government's agenda). Currently, there are three access points to enter Labuan Bajo: (1) Komodo Airport, (2) Labuan Bajo port, and (3) El Tari International Airport in Kupang.

However, whether it is possible to have developed all additional infrastructure and facilities by 2019 is highly doubtful. Moreover, there is a concern whether development of Labuan Bajo (and the subsequent increase in both tourism and local population) will have a negative impact on the region's ecosystem.

Labuan Bajo is believed to be particularly appealing to foreign tourists from Australia, Germany, France, USA, Netherlands, United Kingdom, Singapore, Thailand, and Japan. The government therefore hopes to see direct flights from Malaysia, Singapore and Australia to Labuan Bajo somewhere in the future (which implies that the Komodo Airport has to be upgraded into an international airport). Meanwhile, domestic tourists are expected to come from Java, Sumatra and Kalimantan.

According to the latest data from Statistics Indonesia (BPS), a total of 1,006,653 foreign tourist arrivals were recorded in September 2016, up 9.40 percent (y/y) and the third-straight month of +1 million foreign tourists visiting Indonesia. In the January-September 2016 period foreign visitor arrivals grew 8.5 percent (y/y) to 8.36 million.

10 Priority Tourist Destinations of the Indonesian Government:

Destination Tourists
Tourist Target
Central Java
227,337     2,000,000
125,307     1,000,000
Labuan Bajo
 54,147      500,000
East Java
 33,387     1,000,000
Thousands Islands
off the coast of Jakarta
 16,384      500,000
Toba Lake
North Sumatra
 10,680     1,000,000
  3,315      500,000
Tanjung Lesu
  1,739     1,000,000
Halmahera, Maluku
   500      500,000
Tanjung Kelayang
Bangka Belitung
   451      500,000

Source: Investor Daily