Cutaneous Leishmaniasis (CL) is a neglected tropical disease transmitted by species of Phlebotominae sand flies. CL is responsible for more than 1000 reported cases per year in Ecuador. Vector collection studies in Ecuador suggest that there is a strong association between the ecological diversity of an ecosystem, the presence of potential alternative or reservoir hosts and the abundance of sandfly species. Data collected from a coastal community in Ecuador showed that Leishmania parasites may be circulating in diverse hosts, including mammalian and potentially avian species, and these hosts may serve as potential hosts for the parasite. There has been limited reporting of CL cases in Ecuador because the disease is non-fatal and its surveillance system is passive. Hence, the actual incidence of the CL is unknown. In this study, an epidemic model was developed and analysed to understand the complexity of CL transmission dynamics with potential non-humans hosts in the coastal ecosystem and to estimate critical epidemiological quantities for Ecuador. The model is fitted to the 2010 CL outbreak in the town of Valle Hermoso in the Santo Domingo de los Tsachilas province of Ecuador and parameters such as CL transmission rates in different types of hosts (primary and alternative), and levels of case reporting in the town are estimated. The results suggest that the current surveillance in this region fails to capture 38% (with 95% CI (29%, 47%)) of the actual number of cases under the assumption that alternative hosts are dead-end hosts and that the mean CL reproduction number in the town is 3.9. This means that on the average 3.9 new human CL cases were generated by a single infectious human in the town during the initial period of the 2010 outbreak. Moreover, major outbreaks of CL in Ecuador in the coastal settings are unavoidable until reporting through the surveillance system is improved and alternative hosts are managed properly. The estimated infection transmission probabilities from alternative hosts to sand flies, and sand flies to alternative hosts are 27%, and 32%, respectively. The analysis highlights that vector control and alternative host management are two effective programs for Ecuador but need to be implemented concurrently to avoid future major outbreaks.