The Implementation of Sustainable Tourism Policies in Labuan Bajo: Assessing the Distribution of Tourism Benefits between Investors and Local Communities

Abstract

Labuan Bajo has been designated as one of Indonesia's priority tourism destinations, attracting substantial public and private investment. While tourism development has generated new economic opportunities, questions remain concerning the extent to which local communities benefit from the growing tourism economy. This article examines the implementation of sustainable tourism policies in Labuan Bajo, focusing on the distribution of economic benefits between tourism investors and local communities. Using normative juridical and policy analysis, the study evaluates tourism governance, local economic participation, licensing, investment policies, and community development mechanisms. The article argues that sustainable tourism cannot be measured exclusively through environmental indicators or visitor growth but must also incorporate distributive justice. Local communities should have meaningful opportunities to participate in tourism supply chains, employment, entrepreneurship, and decision-making. The study proposes a community benefit framework incorporating local procurement, employment targets, community enterprises, transparent investment obligations, and participatory destination governance. Particular attention is given to the risk of economic leakage, where tourism revenue generated in Labuan Bajo flows disproportionately to external investors. Strengthening local economic participation would ensure that tourism development contributes to inclusive growth and improves community welfare. The article concludes that sustainability in Labuan Bajo requires integrating environmental management with explicit mechanisms for economic justice.