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A simple Instagram account helps sell vacations at this luxury island resort

This resort costs up to $12,000 a night

This year, vacation and travel destinations around the world are expected to spend a whopping $542 billion on advertising to lure vacationers to their locales, according to recent figures from eMarketer.

Yet Nihiwatu, a resort on the remote Indonesian island of Sumba, has its own unique method of drumming up high-end clientele—and it costs them virtually nothing. Perhaps more interesting is the exact way in which they've managed to earn an enviable word-of-mouth reputation.

"When guests book and we ask, 'How did you hear about us?' Instagram constantly comes up," James McBride, the resort's managing partner, told CNBC recently. "It's actually fascinating how much it comes up."

Instagram, the Facebook-owned, photo-sharing app just marked its sixth year since inception, and claims more than 500 million monthly active users. The platform is also a growing marketing tool, with companies flocking to harness Instagram influencers—accounts with large amounts of followers—to boost their products.

In Nihiwatu's case, however, the resort is reaping the benefits of being an influencer without much of the costs. It currently has more than 45,000 followers on its Instagram account, and a night at the resort ranges between $600 to up to $12,000. depending on the accommodations.

Despite the hefty price tag, the hotel has little trouble booking rooms, and gets lots of referrals from the photo-sharing site.

"When the content is beautiful, people follow you and they live vicariously through you," McBride said. "Word of mouth and social media are almost intertwined to a certain degree. They coexist."

Nihiwatu, located on the island of Sumba in Indonesia

If you're looking to get away from it all, Nihiwatu may be just the spot. In fact, there's not even at ATM to be found on Sumba Island.

Located on more than 500 acres of natural reserve, Nihiwatu boasts 28 villas. The scenic resort island was recently ranked by Travel + Leisure Magazine as the number one hotel in the world.

Still, reaching the secluded destination can be a considerable trek. There are no more than a couple flights per day to Sumba from the island of Bali, but that hasn't deterred the flock of U.S. residents who are the most represented demographic among the island's guests.

Until very recently, Nihiwatu has relied purely on organic social media. McBride told CNBC the hotel has invested very minimally in advertising on both Instagram and Facebook.

McBride said people often ask him which agency runs his social media accounts, "I always answer with a straight face, and I say, 'Mary Tilson, our yoga teacher does it,' " he said.

Not only is he intrigued by how many people found his resort without him having to use conventional ads and travel agencies, but he also takes pride in relying on local staff to share experiences through social media.

"Anyone can do it if you got good taste, take good pictures, and it costs you nothing," McBride said. "There's a mindset that social media needs to be run by an agency, or someone professional, when it's really not that difficult."