Successive governments have long identified tourism as a promising avenue for Papua New Guinea to diversify its economy away from a reliance on extractive industries. PNG’s topography, biodiversity and rich cultural traditions offer a range of outdoor tourism opportunities that stand to be unlocked by improved infrastructure, enhanced safety measures and effective marketing strategies. Moreover, prior to the global Covid-19 pandemic, the country seemed poised to reap longer-term benefits from hosting the 2018 APEC Leaders’ Summit in Port Moresby, which placed it under the international spotlight and accelerated development in the capital. Tourism, however, is expected to be among the final industries to recover from the international impact of the Covid-19 pandemic, which led to worldwide travel restrictions and the implementation of lockdown measures in parts of PNG.
As internal restrictions ease, steps to boost domestic tourism could help mitigate the economic fallout in the short to medium term. If the industry can use the coming period to focus on upskilling its human capital and improving safety for travellers, then the country could be better positioned to attract visitors once international travel resumes, leading to a more robust and diverse tourism industry in the long term.
Changing Visitor Profile
There has been optimism that PNG’s hosting of the November 2018 APEC Leaders’ Summit could translate into long-term benefits for the tourism segment. The arrival of 9000 international visitors helped showcase PNG as a stable environment for business and tourism on the global stage – which in some cases resulted in increased international investment interest. PNG’s tourism offer has benefitted from the launch of new overnight accommodation, including 212 keys at the Hilton Port Moresby; the development of two new convention centres, the APEC Haus and the Kutubu Convention Centre; improved safety, including the installation of 200 police-monitored CCTV cameras funded by the Chinese government; and several infrastructure developments, among them a $20m investment to upgrade the facilities at Jacksons International Airport.
Hosting the APEC summit may ultimately help PNG to broaden its visitor demographic. Australians account for the lion’s share of international visitors to PNG, likely helped by the fact that PNG’s dry months, from April to November, correlate with Australia’s winter. According to the latest PNG International Visitor Survey (IVS), containing data for the first half of 2019, Australians comprised 48% of arrivals to PNG, South-east Asia accounted for 12%, North-east Asia for 10%, Europe for 8%, North America for 7% and New Zealand, whose winter also correlates with PNG’s dry months, made up 5%. The majority of the remaining visitors originated elsewhere in the Pacific and Asia.
Extended television coverage in China, for example, throughout the APEC summit increased exposure to PNG in a potentially large source market. To further leverage the enhanced exposure, PNG’s government announced in mid-2019 that its electronic visa programme would be expanded to cover all 20 APEC members, in addition to countries including India and South Africa. This marked progress from PNG’s 2013 introduction of a 60-day visa on arrival for nationals from 70 countries, including many Pacific Island nations, Association of South-East Asian Nations member states, Japan, Israel, the EU and the US; as did the 2016 move to grant Australians a free 30-day visa on arrival.
Other steps that may increase visitor flows include improving air access to the country, reducing the cost of travel, improving the quality of service provision in the industry and expanding the overall tourism offering, which together stand to be leveraged through effective promotion by the Tourism Promotion Authority (TPA).
Oversight & Funding
The TPA reports to the Ministry of Tourism, Arts and Culture, headed by Emil Tammur – one of only four ministers to have retained their position following Prime Minister James Marape’s June 2019 Cabinet reshuffle. The TPA’s responsibilities include the creation and implementation of a comprehensive tourism strategy, the oversight of global tourism marketing, visitor surveys and support for local businesses in the industry, as well as attracting international and local investment in the sector.
In 2019 the previous government initially committed a record PGK50m ($14.7m) in funding for the TPA, representing a nearly 20-fold increase from the 2018 level of PKG2.6m ($767,000). The Marape administration then increased expenditure to PGK62.2m ($18.3m), with additional financing from the World Bank bringing total sector appropriation in 2019 to PGK67.2m ($19.8m). Strong financial support is set to continue in the second half of 2020, with an expected PGK36.8m ($10.9m) in government funding, bringing the sector’s total budget to PGK50.4m ($14.9m). The allocation for PNG’s tourism segment for the period up 2023 – though not at the 2019 or 2020 level – is expected to remain high in comparison to earlier years, with annual projections of between PGK27.6m ($8.1m) and PGK30.2m ($8.9m) for 2021-23, according to the 2020 budget. Meanwhile, the segment’s contribution to GDP, including indirect employment, is expected to rise from 1.8% in 2017 to 2.2% by 2028, according to the World Travel & Tourism Council. Although it remains to be seen how far the government’s priorities will turn away from tourism during and after Covid-19, these predictions are a strong indicator of the potential for growth in the segment.
Covid-19 Response
PNG began to introduce measures to limit the spread of Covid-19 in mid-February 2020, including a ban on travellers originating from several Asian countries, the cancellation of online visas and visas on arrival, and restrictions on the number of international flights to the country. The first reported case, that of a business traveller on March 22, was followed by the declaration of a state of emergency within 24 hours, which suspended all flight arrivals and closed all non-essential businesses – effectively halting the country’s tourism industry.
The TPA’s Tourism Industry Business Impact Survey, published in April 2020, was designed to investigate the initial impact of these events on PNG’s tourism operators. The survey’s 44 respondents reported losses of PGK67.9m ($20m), which was the result of around 1600 cancelled bookings, and had led to the lay-offs of some 1200 primarily hotel employees by that time. Furthermore, 90% of respondents experienced cancellations of advanced bookings for the remainder of 2020 across a range of tourism service providers, including tour operators involved in trekking, water-based activities and cultural tours, as well as hotels and airlines.
In its survey, the TPA proposed a number of government interventions that would help mitigate further fallout for PNG’s tourism industry. First, as a means of reducing additional lay-offs and enabling companies to continue operations, it proposed introducing a wage subsidy equal to PGK350 ($103) – the national minimum wage – for a maximum of two months, and waiving loan repayments and interest payments for operators for six months. To use this time to promote the digital transformation of the sector, the TPA further recommended creating incentives for small and medium-sized enterprises (SMEs) to move into the digital space, including the development of an online payment system by the TPA that would enable streamlined online transactions across the industry; support for capacity building for SMEs that work to adapt their operations; and the disbursement of a PGK10,000 ($2950) grant for SMEs to assist their digital transformation. The TPA also suggested establishing public-private partnerships that would temporarily turn hotels and SME accommodations into housing for Papua New Guineans who have been repatriated due to the pandemic.
PNG’s early success in stemming the flow of Covid-19 within its borders, with the government reporting just 11 cases at the end of June 2020, led the country to request inclusion in a proposed trans-Pacific “travel bubble”. PNG joined tourism representatives from New Caledonia, the Solomon Islands and Tahiti in submitting this request to the offices of the Australian and New Zealand prime ministers on June 2, 2020.
Given the importance of Australian arrivals, such an agreement could have a profound impact on PNG’s tourism segment. With businesses around the country resuming operations in mid-2020 and internal Covid-19 restrictions beginning to ease, the government could opt to take steps to boost tourism activity by reducing taxes on domestic travel, as well as on goods and services. In light of the March 2020 UN World Tourism Organisation Impact Assessment estimate that global tourist arrivals could decline by 20-30% over 2020, levaraging domestic travel may play a increasingly important role in sustaining the industry.
Improving Service
In June 2020 a memorandum of understanding was signed between the TPA and the University of PNG as part of efforts to boost the tourism industry’s human capital – generating momentum for the long-term success of the sector. Under the agreement, the University of PNG will offer professional studies in tourism and hospitality management in order to meet the needs of the industry and maximise the domestic labour force. Additionally, Paga Hill Estate Development Company plans to create a National Hospitality and Tourism Training Academy through a joint initiative bringing together the government; operators in the hotel, hospitality and tourism segment; and overseas partners. Staff will be trained on topics covering all aspects of hotel, hospitality and tourism skills, with a strong emphasis on practical training and on-the-job experience – although no clear timeline for the project had been established as of late June 2020.
Elsewhere in the private sector, local firm Coral Sea Hotels formed a partnership with the Singapore Hotel Association and Education Centre in 2018 to train local executives and senior management staff to undertake upper management roles within the hospitality industry. Graduates of the course, which aims to equip PNG nationals with the skills to take on supervisory and management roles in the industry, are currently among those in leadership roles at the company’s smaller hotels and management positions located in Port Moresby. Over the long term PNG’s tourism industry would also benefit from improved leadership at an administrative level, better organisation of industry stakeholders and deeper collaboration between key players. For example, some of the targets outlined in the government’s latest policy framework for the sector, the Tourism Master Plan 2007-17, had yet to be reached as of June 2020; these include the establishment of a new industry-led body to replace the TPA. A new and updated roadmap to guide the sector has also yet to be announced.
Arrival Infrastructure
At present, the country is not equipped to receive large volumes of visitors, underscoring the importance of developing underlying support infrastructure. “PNG could do more to enhance its readiness to welcome tourists; many parts of the country are not yet adequately developed,” Yiannis Nicolaou, general manager at Port Moresby’s Lamana Hotel, told OBG. “The government should first focus on improving safety in the country and then work to develop infrastructure, before focusing on upskilling the people.” This reflects the general feedback from visitors from Australia, North America and Europe, who most commonly identified security and infrastructure issues as areas for improvement, according to the IVS.
To address these concerns, a contract was signed in December 2019 between the Japanese government, the Dai Nippon Construction-Nippon joint venture, and the National Airports Corporation to develop the Lae Nadzab Airport in 2020. The PGK629m ($185.5m) project will be majority funded by an overseas development assistance loan from the Japan International Cooperation Agency, supported by a PGK114m ($33.6m) contribution from PNG’s government. The project aims to create a strategically positioned aviation hub that will serve as PNG’s second international airport, bringing facilities and equipment up to international standards. Developments include widening and reinforcing existing runways and taxiways; building a new passenger terminal and car park; and transforming the existing passenger terminal into a cargo facility. The airport will also function as the point of entry for workers on the proposed $5bn Wafi-Golpu mining project, for which negotiations are expected to continue once restrictions related to the global Covid-19 pandemic subside (see Mining chapter). Regardless of the status of mining project, the airport will enable visitors to enter PNG at a more central location than Port Moresby.
Attractions
PNG’s natural resources, and its waterbased and trekking activities, are key attractions for visitors. Nevertheless, more remains to be done to improve infrastructure and enhance safety to enable PNG to compete with similar markets in the region, both in terms of cost and the perceived quality of tourism products. Given that the majority of opportunities are in remote locations beyond Port Moresby, improvements are needed not only in transport infrastructure, but also in the reliability of security and health care services. To be competitive, it will be important for operators to provide professional services in line with international standards. Gains in these areas would help to improve perceptions of PNG around the world, and could be leveraged through effective marketing strategies.
PNG’s outdoor offering encourages tourists to move beyond the National Capital District, primarily to the Central and Northern Provinces – home to the Kokoda Trail, a 96-km route renowned for its Second World War heritage, as well as a number of cultural festivals (see Country Profile chapter). Notable tourism destinations are East New Britain and Milne Bay: while these locations respectively attracted just 8% and 7% of total visitors to the country in the first half of 2019, according to the IVS, there was a considerable respective increase in visitor numbers of 17% and 25% year-on-year. These two destinations have been earmarked as having the most tourism potential, largely due to the organic interest they already generate and their comparatively low risk for crime. The two provinces were accordingly selected as pilot locations for the World Bank’s five-year, $20m PNG Tourism Sector Development Project, which began in 2017. The project targets improving tourism-related infrastructure and increasing investment in product development through a grant facility for micro-enterprises, SMEs and community groups, with loans ranging between PGK20,000 ($5900) and PGK60,000 ($17,700). As a further step to facilitate growth in the region, East New Britain is set to receive approximately PGK10m ($2.9m) in 2020 for road repairs alone – a value more than three times the allocation for the entire tourism segment three years earlier.
Marketing
Steps to improve the service, transport and safety of PNG’s tourism offering should be accompanied by effective marketing strategies in order to ensure that international perceptions of the country appropriately reflect the progress it makes. Previous endeavours have included an online marketing campaign related to the APEC Tourism Week, held in Port Moresby between May 28 and June 3, 2018. The campaign invited social media users to share their experiences of events by using specific hashtags: a cost-effective solution for advertising positive experiences of PNG to an engaged audience.
Targeted efforts are also under way to improve the advertisement of PNG’s opportunities to audiences in Australia and New Zealand. In May 2019 the TPA appointed Sydney-based communications agency Example to handle public relations, marketing and trade relations within Australia and New Zealand. Further promotion of PNG’s tourism industry in Australia was later discussed at the November 2019 Australia-PNG Emerging Leaders Dialogue. As the flagship annual event of the Lowy Institute’s Australia-PNG Network, this meeting between leaders aims to strengthen ties between the two countries and is supported by the Australian Department of Foreign Affairs and Trade. Recommendations from the discussion included encouraging social media influencers to showcase tourism opportunities in PNG and boost international perceptions of the country; expanding Australian adventure tourism companies’ activities to PNG; promoting the use of digital platforms such as Airbnb to boost local ownership of tourism in PNG; encouraging Australian musicians to film music videos in PNG; and identifying and supporting opportunities to increase the visibility of Australian indigenous culture in PNG, and PNG culture in Australia. These mutually beneficial strategies could help to highlight the cultural diversity of the two countries, and provide opportunities for added value to local communities.
PNG could follow in the footsteps of other successful countries in the region, including Fiji. PNG and Fiji are characterised by a similar range of biodiversity and rich culture, but Fiji’s reputation as a safe and friendly destination is a key draw for international business and leisure travellers. Once the security and transport infrastructure in PNG is improved, particularly in rural areas, the country could employ similar strategies to those that proved successful in developing Fiji’s international reputation. It is essential that this be complemented through ongoing training and support to help upskill workers in PNG’s tourism industry, and to ensure that employees and managers in the segment understand the expectations of international visitors. A convincing marketing strategy, therefore, must go hand in hand with efforts to enhance the quality of service provision, upgrade transport accessibility and improve safety for visitors to ensure that PNG can develop itself as a standout tourism destination.
Outlook
Those visitors who make the trip to PNG report positively on their experiences: more than 90% of visitors in 2018 stated that they would return, according to the IVS. When international travel picks up after the Covid-19 pandemic, the challenge will be to improve access and security throughout the country to make a wider range of destinations accessible, while also ensuring that human capital accelerates sufficiently to meet a rise in demand and heightened expectations. Effectively marketing this new offering will be key to helping PNG leverage its wealth of natural resources and unlocking the country’s vast tourism potential.
