Demon Island
AKA Piñata: Survival Island
(2002)

A group of college students descend upon a remote island to participate in a scavenger hunt, but in the process unleash an evil spirit in the form of ... a piñata! The piñata monster (Ed Gale) can fly around and kill people. Or it can swing from a vine and kill people. Or it can walk and kill people.

The only people to survive at the end are Kyle (Nicholas Brendon), Tina (Jaime Pressly), and one of the event organizers, Connie (Tressa DiFiglia). They at first ensnare the walking piñata in a trap using a canvas tarp and set it on fire. It breaks free and starts attacking them again, but this time, Tina handcuffs a Molotov cocktail to the back of it and causes it to explode.

Yes, it's even worse than it sounds.

Thanks,CorpsValues!