Economic Update

Published 13 Oct 2016

Government authorities are rolling out a number of new initiatives in PNG’s tourism sector to foster growth in the non-extractive industries.

To this end, in August Tobias Kulang, the minister of arts, culture and tourism, announced the Tourism Zone Development Initiative – which is intended to support and fund infrastructure and facilities to develop select provinces into major tourism destinations – at the 49th APEC Tourism Working Group Meeting in Kokopo.

The initiative will target three main areas in PNG: Kokopo in East New Britain, Alotau in Milne Bay and Mount Hagen in the Western Highlands.

The new policy is part of a larger plan to reduce reliance on the mining and energy sectors and devote more resources to address infrastructure gaps that are hindering the development of the tourism industry.

“For too long in PNG, administrations have been content to tap the extractive industries to fuel the national economy, as opposed to developing sustainable industries like tourism and agriculture,” Kulang told OBG earlier this year.

Targeting the leisure segment

Although the number of international arrivals into PNG has grown steadily over the past decade from just over 69,200 in 2005 to more than 198,600 last year, according to data from the PNG Tourism Promotion Authority, the increase is due primarily to the influx of business travellers.

As a result, PNG is looking to increase the number of inbound leisure travellers by boosting cruise tourism, which represents one of the fastest-growing segments of the global tourism industry.

Currently, the total direct economic impact of cruise tourism in PNG is estimated to be about $4.8m, with five ports – Alotau, Rabaul, Kitava, Doini Island and Kiriwina – receiving about 89% of the total, according to the 2016 “Assessment of the Economic Impact of Cruise Tourism in PNG and Solomon Islands”.

To further boost PNG’s cruise segment, the report recommends improvements to port infrastructure such as extending the jetty at Kitava to enable more efficient passenger transfers to and from ships; bringing freshwater supplies at Alotau up to international standards so that ships from Australia can replenish their supplies there; and developing the port at Madang to enable larger ships to dock.

According to Kulang, the government is already cooperating with private investors to allocate millions of kina to develop the seaports and wharves in Kokopo and Alotau.

Kulang also pointed out that approximately one-third of cruise ship passengers use airports to either return home or to travel to another destination, meaning that improvements in air and sea travel are mutually beneficial.

New international flights

To this end, new flight routes and air transport infrastructure upgrades are being rolled out to boost connectivity.

Earlier this year, Air Niugini, PNG’s national carrier, announced plans to increase the number of flights from Tokyo to Port Moresby as part of its target to offer three weekly flights on the route by next year.

Meanwhile, PNG Air – the country’s second-largest airline – is currently in the process of renewing its fleet with seven new ATR 72-600s, short-haul regional aircraft, which are expected to be delivered by November 2017.

PNG Air halted its international operations in 2013 in a bid to focus on its domestic flights, but the carrier is planning to resume international flights by the end of the year with a new route to Jayapura, Indonesia, according to industry media reports.

The completion of a new PGK70m ($22.1m) terminal at the Mount Hagen International Airport late last year, as well as upgrades to the runaway, have added capacity to accommodate increased air traffic and passengers.

Niche market

Increased flight options will also pave the way for international visitors to access heritage destinations and ecotourism sites, niche areas that are rapidly growing in the island nation.

In mid-July Kulang and Robert Hamal Sawa, minister for arts and culture of the Autonomous Government of Bougainville, launched the Buka Town Tourism Development Initiative 2016-20.

The programme aims to develop Buka as a major tourism hub by 2018 through developing infrastructure, tourism packages and services, and stakeholder collaboration and capacity building, as well as linking the region with Solomon Islands, Vanuatu, Fiji and other Pacific Island Nations as part of the Solomon Seas Tourism Zone Initiative.

Home to an abundance of forests, lakes, rivers and wetlands, Bougainville was once the site of the Panguna copper mine, which has since been shut down. As in other areas of the country, tourism is now being targeted as a key industry to help diversify the local economy.

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