Around 20 attackers stormed a hotel Friday in the beach town of Ayampe in southern Ecuador and kidnapped six adults and a child, local police commander Richard Vaca said.
The abducted tourists, all Ecuadorans, were interrogated and hours later the bodies of five adults were found with gunshot wounds on a road, he said.
The assailants "apparently mistook them for adversaries" from a rival drug gang, said Vaca.
President Daniel Noboa said one person has been arrested so far in the case and the government is tracking down the rest of the attackers.
Once considered a bastion of peace in Latin America, Ecuador has been plunged into crisis by the rapid spread of transnational cartels that use its ports to ship drugs to the United States and Europe.
In January, Noboa imposed a state of emergency and declared the country in a state of war against gangs after a wave of violence following the prison escape of a notorious gang leader.