Currently tourism has become one of the largest and most significant economic sectors in the world. Especially developing countries, which are weaker in other international marketing items and transactions, but endowed with unique and diverse cultural and natural tourism resources, have been taking advantage of the tourism industry as a fundamental source of their foreign exchange. Recently, the detrimental impacts of conventional tourism, has brought several ideas and concepts among those, the notion of ecotourism become a pretty interesting one with its characteristics and principles. The year 2002 was designated as the international year of ecotourism with the intention of encouraging the cooperative efforts of different stakeholders to promote development and protection of the environment, particularly in developing countries. Yet, many of developing countries including Ethiopia did not take advantage of their abundant ecotourism resources due to various shortcomings. Thus, this paper tries to investigate the persistent challenges hindering the development of ecotourism and the existing opportunities which could be capitalized on in developing countries scenario.