Tuesday, July 23, 2024

Isles of the Dragon – Labuan Bajo Market Update

Isles of the Dragon – Labuan Bajo Market Update provides an overview of the tourism and hospitality industry in Labuan Bajo, which is a booming tourism hotspot in Indonesia. Known as the gateway to Komodo National Park, Labuan Bajo is popular among domestic and overseas visitors. Under the initiatives of developing regional tourism, Labuan Bajo was selected as one of the five top priority destinations in Indonesia, known as the ‘new Balis’. In 2023, Labuan Bajo hosted the ASEAN Summit, which further increased Labua Bajo's awareness as a leisure and MICE destination in the region. The airport will start to serve international flights in September 2024, and the number of visitor arrivals is expected to grow sustainably at the same time.

With the support from the government, Labuan Bajo attracts a growing number of developers and investors from Indonesia and the region. Following the entry of the first internationally branded hotel in 2024, a list of branded supply totalling about 1,300 keys ranging from luxury hotels to midscale, is expected to open over the next three years.

An analysis of Labuan Bajo's opportunities and challenges is also presented in the full article which is available below!

Overview

Located in East Nusa Manggarai Regency in western Flores, Labuan Bajo is the gateway to Komodo National Park, best known for the fearsome Komodo dragons. Offering unique wildlife and a pristine marine environment, Labuan Bajo has been popular among natural enthusiasts and divers. The short flight time from key cities, namely Bali and Jakarta, makes the island a great stopover beyond Bali or Lombok.

Once a sleepy fishing village, Labuan Bajo is nowadays associated with Komodo National Park, which became a UNESCO World Heritage Site as far back as 1991. As the area is getting more developed, the unspoiled natural landscape attracts travellers from all over the world. Under the initiatives of developing regional tourism, Labuan Bajo was selected as one of the five top priority destinations in Indonesia, known as the ‘new Balis’. To boost the awareness of Labuan Bajo, the Indonesian government chose Labuan Bajo as one of venues for the ASEAN Summit in May 2023.

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Attractions

Established in 1980, Komodo National Park includes three major islands, namely, Komodo, Rinca, and Padar, as well as numerous smaller islands, totalling an impressive surface area of 1,817 square kilometres. While their population has been recovering, there are currently less than 3,500 Komodo dragons in the National Park and are listed as an endangered species. The national park also provides habitat for many other notable terrestrial species such as the orange-footed scrub fowl, an endemic rat, and the Timor deer. In addition, it features rich marine environments including coral reefs, mangroves, seagrass beds, seamounts, and semi-enclosed bays.

On top of the wildlife, the landscape and scenery provide additional, popular sightseeing spots. The peak of Padar Island features a panoramic view of three bays. Each of the three bays has different coloured sand: white, black and pink. Pink beach at Komodo Island is one of the seven pink beaches in the world and a snorkelling spot where tourists are able to see colourful corals and a plenitude of marine life. Manta Point, a dive site in Komodo, is known as the habitat of manta rays, a colossal marine creature that can grow up to 4 meters wide. Located between the islands of Komodo and Rinca Island, Manta Point also features other marine life such as turtles, sharks, various kind of sponges and cuttlefish.

As the attractions of Komodo National Park are scattered across different islands, water transportation, such as via ferry, speed boats, and phinisi (a local style of boat, often used as live-aboards), is common in the local area. The market of phinisi is growing with the increasing demand from both divers, backpackers, and luxury travellers. Luxury hospitality operators, including Aman and Allia, offer phinisi tours around Komodo National Park. For example, the vessel ‘Alila Purnama’ accommodates 10 guests, a crew of 16, and rents at US$15,000 per night, excluding alcoholic drinks and scuba dive courses. It is reflective of the destination’s appeal to the ultra-high-end market.

Additionally, there are a number of inland attractions at a distance from the centre of Labuan Bajo, including Sano Nggoang Crater Lake, Cunca Wulang Waterfall, Wae Rebo Village and Goa Rangko Cave. However, due to the limited infrastructure in the mountains, these attractions are less developed yet have great potential. That being said, all of them are at peril from overtourism if not managed carefully.