While Papua New Guinea remains a relative newcomer to the global tourism stage, international arrivals to the country have risen steadily over the past decade, from just over 69,200 in 2005 to more than 198,600 in 2015, according to data compiled by the PNG Tourism Promotion Authority (TPA). Although notable, most of the increase has been driven by the influx of business travellers and workers that has accompanied PNG’s recent economic growth as opposed to a substantial boost in the number of holidaymakers.
This trend has reversed slightly as economic growth has cooled and segments, such as cruise and adventure tourism, have taken hold. Indeed, PNG has much to offer the leisure traveller. Culturally one of the world’s most diverse countries, the island of New Guinea shelters 6-8% of global species, hosts one-sixth of known languages, and rivals Borneo, the Amazon and the Congo in terms of biodiversity, according to the Worldwide Wildlife Foundation.
Arrivals
International arrivals to PNG have grown by an average of 6.4% year-on-year since 2010, with gains of 12.8%, 6.1%, 4%, 5.1% and 4% in each of the five years up to 2015, according to the TPA. While the 4% increase from 2014 to 2015 was slower than that of most previous years, the deceleration was largely due to a lesser need for foreign workers, as many large-scale, manpower-intensive infrastructure and extractive sector projects transitioned from construction to operational phases, most notably the PNG liquefied natural gas project. “Contrary to many other markets, labour is not an issue in PNG, but rather the lack of infrastructure as well as the prohibitive costs of utilities like electricity and water for example,” James Illing, general manager of the Laguna Hotel, told OBG.
In fact, the only category of arrivals tracked by the TPA to decline in 2015 was that labelled employment. It fell 10.6% compared to an increase of 6.3% among holidaymakers, 18.6% for travellers visiting friends and relatives, 15.3% among those coming for educational purposes and a substantial 130.3% for those attending meetings, incentives, conferences and events (MICE).
This last category was given a boost by the Pacific Games, which were held in Port Moresby in July 2015, and the eighth summit for the heads of state and government of the African, Caribbean and Pacific Group of States, which came to the capital in May 2016. Moreover, growth is expected to continue over the coming years as the country’s capital plays host to a number of other big-ticket events, such as the Asia-Pacific Economic Cooperation summit in 2018. Employment arrivals, however, are likely to continue trending downward as PNG enters a period of slower economic growth. The Asian Development Bank recorded 9.9% GDP growth for 2015 compared to 13.3% a year before and forecasts further declines in 2016 and 2017 to 4.3% and 2.4%, respectively.
Leisure Travellers
Despite having outpaced overall arrivals in terms of growth in 2015, the leisure segment remains small. The country is largely unknown on the global tourism stage and flights to Port Moresby are both limited and expensive. That said, arrivals in the category are increasing and the overall trend is a positive one. From 2010 to 2015 the number of holidaymakers grew by an average of 10.6% annually – 4.2 percentage points more than the 6.4% average for overall arrivals, according to the TPA. Some years even saw double-digit growth. For example, 2014 registered a 20% increase on 2013, which itself recorded a 10.5% rise over 2012.
While growth in 2015 clocked in at a slower 6.3%, many professionals within the industry attributed the decline to the March 2014 cancellation of the visa-on-arrival scheme for citizens of Australia, by far PNG’s largest source market for tourists, a decision that is currently in the process of being reversed. From 2005, when the TPA first began tracking data, holiday arrivals tripled from just over 18,100 to more arrivals is also expanding. In 2010 leisure tourism accounted for 22.5% of overall arrivals, whereas in 2015 the amount was closer to 27.2%.
Connections
At present, of the international destinations with direct flights to Port Moresby, the majority are Australian. Air Niugini, PNG’s national carrier, operates to Cairns, Brisbane and Sydney, and a handful of nearby Asian destinations, including Bali, Manila, Hong Kong, Singapore and Tokyo. It also connects PNG to a number of its island neighbours, such as Fiji, the Solomon Islands and Vanuatu.
Given the relatively large number of connections, it is unsurprising that Australians account for the largest share of leisure travellers. Of the 54,023 such visitors that came in 2015, 44% were from Australia. These 23,750 travellers accounted for a slightly smaller percentage of leisure tourists than in 2014, when Australians represented 54% of the total, but this is largely due to changing immigration policies.
Visa Issues
The decision to eliminate visas on arrival for citizens of Australia, which was taken in response to Australia’s unwillingness to grant reciprocal rights to PNG citizens, dealt a heavy blow to the tourism industry. When it went into effect in March 2014, it required all travellers from the country to apply for short-term, single-entry visitor visas at local PNG consulates before travelling. The new policy did not, however, apply to visitors aboard cruise ships, to whom visas continued to be granted electronically.
As a result of the changes, the number of Australians travelling to PNG for leisure fell markedly in the first half of 2014. Although increased cruise tourism in the second half of that year offset the decrease, allowing for modest year-on-year growth, the overall trend was one of declining visitor numbers. Indeed, arrivals from Australia were down another 2.3% in 2015 as the policy continued exerting a toll. Richard Knight, owner of the Loloata Island Resort, told OBG, “Most tour operators noticed a downturn in the number of Australians visiting PNG over the past year, slowing the development of sector as a whole.”
In an effort to reverse this trend, the government announced in November 2015 that it would once again issue visas on arrival to Australian leisure travellers visiting certain tourist zones, such as Gurney-Alotau in the Milne Bay Province, Mount Hagen, Kokopo and Madang. Charles Abel, the minister for national planning, told Papua New Guinea Today that the initiative was part of a “special tourism push” that would apply to Australians as well as other nationalities, rather than a full-scale reversal for all Australian visitors, most notably business travellers. “We have made it difficult for these tourists to come, especially when we are competing with places like Fiji who give visas on arrival, are low cost and have quality products,” he said, adding, “We have to give the industry a boost to be able to be competitive.”
While the policy had yet to be fully implemented at the time of print, many within the sector were optimistic about its impact. “I think implementation is imminent,” Knight told OBG. “Once the change goes into effect, there should be quite an improvement in the general situation of the industry.”
Other Source Markets
Despite Australia’s dominance in the holiday arrivals category, other source markets are also growing in importance. Travellers from the US, notwithstanding the enormous distances involved, accounted for the second-largest group of holidaymakers to PNG in 2015 at 6830 persons, or 12.6% of total leisure arrivals, according to the TPA. Overall arrivals from the country, inclusive of non-leisure travellers, also grew by a healthy 9.4% in 2015 compared to a year earlier, outpacing the general increase in arrivals to PNG for the same time period. A similar uptick was seen again in 2014, as 10% more US leisure travellers arrived during the year compared to 2013. The UK and Germany were next, accounting for 6.6% and 5.1% of holiday arrivals, respectively, in 2015, followed by New Zealand, Japan and China with between 2.4% and 2.9% each.
Unlike the other countries listed, including Australia, US travellers coming for pleasure far surpassed the number of US travellers coming to PNG for other reasons. In fact, the next-largest category of arrivals, classified as business travellers, consisted of less than half the number of holidaymakers, at 3129 persons in 2015, illustrating the great potential of PNG as a tourism destination for the US market.
By comparison, the number of Australian leisure travellers accounted for only 66% of the number of business travellers from the country. New Zealand’s holiday figure was also just 33% of its business figure, while Chinese leisure travellers equalled just 15% of the total number of business travellers and job seekers arriving from the country in 2015.
Similar to the US, Germany, Japan and the UK all also had higher numbers of leisure travellers than those in other categories, but by much slimmer margins. Other countries, such as Malaysia, the Philippines and India had much larger contingents of either business or employment visitors than of holiday goers, a breakdown that if reversed could be a very positive development for the industry.
Promotion
The disparity between the number of holiday and non-holiday arrivals from most countries underscores the enormous promotional tasks facing PNG’s tourism authorities. While the Cabinet includes a minister responsible for tourism, culture and the arts, the duty of promoting the country on the international tourism scene falls primarily to the TPA. The authority was formed in 1993 with a board that includes representatives from Parliament as well as industry stakeholders, such as hoteliers, airlines and niche tourism sector associations.
The body is currently headed by its CEO, Jerry Agus, with a mandate to maximise the economic benefits of tourism. It does so by giving advice to government authorities on tourism policy and its implementation; promoting PNG as a tourist destination to source markets; encouraging the expansion and development of tourism infrastructure, facilities and products; assisting, guiding and facilitating new investment by domestic and international tourism entrepreneurs; encouraging the development of high levels of service, education and management in the industry; and monitoring and reporting trends in the domestic and international tourism industries.
Strategic Aims
At the moment, the TPA is in the midst of implementing a 10-year master plan that targets the development of a sustainable tourism industry by 2017, through the promotion of PNG as a unique cultural and adventure tourism destination as well as through attracting increased investment, which it believes will lead to greater economic development and higher employment within the country as a whole. While growth in international arrivals has been slightly below expectations, with the TPA projecting 220,000-250,000 arrivals for 2015 compared to the 198,000 recorded over the year, there is no doubt that overall arrivals, especially those in the leisure travel category, have improved markedly since the master plan went into effect.
Recently, the TPA has focused a lot of attention on increasing international awareness of PNG as a tourism destination. To this end, it has opened a number of promotional offices abroad and has also launched a user-friendly website aimed at educating potential visitors and facilitating their travel to the country. While the majority of these promotional offices are in locations that already send relatively large numbers of tourists to PNG, namely, Tokyo, Los Angeles, Sydney, Munich and London, there has also been a recent push to expand into other markets. In February 2015, for instance, the TPA opened an office in Shanghai as part of its plans to target the Chinese travel market.
Asian Neighbours
The authorities see great untapped potential in nearby Asian markets, such as China. While acknowledging the continued importance of markets like Australia and the US, the TPA’s most recent visitor report, released in 2014, also cited growing intra-regional travel activity and discussed ways by which PNG could benefit from this trend. Furthermore, according to another report by the Pacific Asia Travel Association in May 2016, arrivals from China to other Asia-Pacific destinations are expected to rise from 102m in 2015 to 150m by 2020, accounting for 23% of all arrivals to destinations in the Asia-Pacific region.
Focus On China
While sizeable, the number of Chinese leisure travellers to PNG is well below the number of Chinese business and employment arrivals to the country, at 1286 in 2015 compared to 4304 and 4152, respectively. In an effort to close this gap, the Shanghai office has already begun to aggressively target the market, participating in leading national travel shows, such as the Guangzhou International Travel Fair and the Shanghai Diving Resort Travel Expo. At the latter, PNG even received an award for “Best Reef Diving Destination for 2015”.
In November 2015 the TPA also brought its first group of Chinese travel agents and wholesalers to the country to learn more about its potential as a tourism destination. So far, the effort put into promotion seems to have paid off. Overall arrivals from China in 2015 grew 14.3% on 2014, which itself saw a 14% increase in holidaymakers compared to 2013.
Not everyone thinks that the Chinese travel market is mature enough for PNG to fully benefit from growing numbers of Chinese travellers, however. Indeed, visitors from the country generally prefer mass-market destinations to the more niche offerings of PNG. “You have large numbers of Chinese coming to places like Australia, but they are not the kind of tourists that PNG usually handles,” Knight told OBG. “Given this, as well as the fact that it is still relatively difficult for Chinese travellers to obtain visas, the main source markets will remain places like Europe, Australia, North America and Japan for the foreseeable future,” he added. The TPA also recognises the continued importance of these countries, noting in its 2014 report that growing numbers of cruise ship travellers from the historically strong source markets, particularly Australia and the large, affluent retiree population of Japan, bode well for PNG tourism going forward.
Economic Contribution
Despite increasing arrivals and international interest, PNG’s tourism industry continues to play a relatively limited role in the country’s overall economic performance. A 2016 study released by the World Travel and Tourism Council underscores this reality, but also projects greater importance for the sector. According to the report, the direct contribution of travel and tourism to GDP in 2015 was PGK259.3m ($88.5m), representing 0.5% of total GDP, and was forecast to rise by 3.2% in 2016. After that, the report predicts a 5.8% annual increase to reach PGK471.3m ($160.9m), or 0.6% of total GDP, in 2026. Similarly, the total contribution of travel and tourism to GDP, a measure that takes into account direct and indirect economic impacts, was PGK794.1m ($271.1m) or 1.7% of GDP in 2015 and was predicted to increase by another 4.1% in 2016 and then 6.5% each year following to reach a total of PGK1.5bn ($512.1m), or 2% of GDP, in 2026.
In terms of employment, in 2015 the industry’s direct contribution was 13,500 jobs (0.4% of total employment), expected to rise by 2.9% in 2016 and 3.4% per year after that, reaching 19,000 jobs (0.5% of total employment) by 2026. Travel and tourism’s total contribution, including jobs indirectly supported by the industry, was 44,500 jobs (1.4% of all employment). This was expected to rise by 3.7% in 2016 to 46,000, and another 4% annually after that, before reaching 69,000 jobs in 2026 (1.7% of the country’s workforce). Growing these numbers has become especially important of late as the government is prioritising employment creation.
Unique Potential
Despite not being a typical mass-market destination, PNG has much to offer the intrepid traveller, a message the country is working to communicate to potential visitors. Its pristine natural environment is a significant draw for adventure tourists, and it is particularly well suited as a centre for diving and snorkelling. In fact, PNG has some of the best marine life in the world; it is part of the Coral Triangle, an area in the western Pacific that includes the waters off of Indonesia, Malaysia, the Philippines, PNG, Timor Leste and the Solomon Islands and boasts more than 600 different species of reef-building corals – some 76% of the world’s total.
The reefs are home to six of the world’s seven marine turtle species and over 2228 species of reef fish. Furthermore, unlike many of the other countries in the area, the waters off PNG are relatively unspoilt. “The advantage PNG has over places like the Philippines and Indonesia is that its reef is undamaged,” Knight told OBG. “The biodiversity is incredible.” Below-surface attractions are not only limited to fishes and corals, as the country also boasts a number of excellent wreck dives, including many Second World War-era boats, planes and submarines.
Beaches also have the potential to be a major draw. Given that the country consists of more than 600 islands and thousands of miles of untouched coastline, it is no wonder that it has excellent beaches, comparable to or even better than those of the regional tourism giant, Fiji. Alex Wilson, general manager at the Grand Papua Hotel in Port Moresby, told OBG that the raw tourism potential of the country is enormous and that it is beginning to attract the attention of major players in the hospitality industry. “Developers from one of the world’s leading hotel chains recently visited PNG and came back in awe of how much it has to offer, saying that if it properly cultivated its tourism potential, it could surpass regional heavyweight destinations like Tahiti, Fiji and the Cook Islands,” he told OBG, going on to say that the latter destinations do not possess the sheer range of attractions that PNG does. “It is one of the only countries in the world where you can go ocean kayaking in the morning and then climb 4500 metres to Mt. Wilhelm’s peak in the afternoon,” he said. “The range of activities is enormous.”
Cruise Ships
Indeed, the beaches in places like Milne Bay are beginning to attract more tourists, especially from cruise ships. According to the latest available data from the TPA, in 2014 over 30 luxury cruise ships carrying around 15,000 tourists visited PNG, stopping at 200 ports of call, including remote villages and beaches in Milne Bay, Rabaul, Madang, New Ireland, West New Britain and Tufi. Not only has this brought much-needed revenue to the small farmers and villagers inhabiting the surrounding areas, but it has also helped to put the country on the tourist map, leading to even more cruise ship arrivals in 2015 and 2016. “A total of 40 ships came to Milne Bay alone over the past year, each bringing a few thousand people,” Knight told OBG. “This has had quite the impact on the local economy, as everyone from sellers of souvenirs to coffee have benefitted.”
Other segments have also been targeted as potential areas of development, including trekking and hiking, surfing, fishing, bird watching, kayaking and stand-up paddling. The country’s cultural heritage, too, has been singled out as a competitive advantage. Known as the “land of a thousand cultures,” more than 800 distinctive languages are spoken throughout PNG, and it is one of the last places on earth where a visitor can experience unique tribal traditions firsthand. The authorities are particularly interested in promoting visits to local gatherings of tribes, where indigenous dances and songs feature prominently. Traditional festivals that celebrate everything from crocodiles to mask culture also have the potential to be a significant draw and are already gaining the attention of international travellers.
Historical Tourism
Another a key niche market with the potential to boost visitor numbers is historical battlefield tourism, which has gained in popularity across a variety of international destinations in recent years. To mark the 75th anniversary of strategic battles that took place in the country between the Allies and the Japanese during the Second World War, the governments of PNG and Australia have begun working together to plan a series of commemorative events scheduled to take place in 2017 and 2018. The planned activities will focus on and around an area known as the Kokoda Track, a winding trail in the centre of the country that marks the spot where Allied troops, mainly Australians and Papuans, halted the Japanese offensive on Port Moresby and drove back invading forces in a series of battles in 1942-43. The events are expected to yield great benefits for the country’s tourism industry, bringing increased visitor numbers, as well as contingents of official guests.
More formal recognition of the sites could also boost their tourism appeal. In August 2015 the governments of PNG and Australia announced plans to jointly seek UNESCO World Heritage status for the Kokoda Track and other sites in the Owen Stanley Range in a bid to preserve the natural and historic fabric of the region, and ensure it retains its appeal to visitors, although at the time of publication the track was still on the tentative list. It is hoped that, as has happened in other countries that are home to historical battle sites, such as Gallipoli in Turkey, PNG will benefit from a surge in visitor numbers, producing a significant impact on the local economies.
The Kokoda Track is already gaining popularity with Australian visitors, with the trek across rough terrain covering a distance of 96 km regarded as a big challenge for the adventure traveller. Estimates suggest that up to 5000 foreign visitors – mainly Australians – currently hike the route each year.
Access
Despite its success in attracting more visitors, PNG’s tourism sector continues to face several challenges, chief among which is accessibility. Air travel to the nation is dominated by Air Niugini, which faces very little competition on most routes and, as such, is able to charge relatively high prices. While this is beginning to change, most notably as a result of the introduction of regular Philippine Airlines (PAL) flights between Manila and Port Moresby in the latter stages of 2015, prices remain high across most routes. For example, a one-way direct ticket from Manila to Port Moresby on a Friday in September 2016 cost $327 on Air Niugini and $322 on PAL. Meanwhile, a one-way direct flight from Singapore to Port Moresby, which is only one hour longer and serviced only by Air Niugini, was closer to double that amount, at about $629 for flights around the same date.
Though there is reportedly interest among other foreign players, such as Virgin, Garuda and Air Asia, very little progress has been made with respect to establishing new routes. Indeed, it took PAL years before a deal was reached. Speaking to Radio NZ in January 2016, PNG’s then tourism minister Justin Tkatchencko said, “We’ve always seen PNG as a very expensive destination to come to because of the airfares, so we need to get that right down. We need to negotiate that with Air Niugini and see how we can do a break-even situation with them to encourage tourism and people to come to PNG.” This is a sentiment shared by many in the industry, although action on the issue has yet to be taken.
Outlook
While international arrivals are on the rise, PNG continues to attract an outsized number of business travellers and workers as opposed to leisure travellers. Indeed, business tourism represents a growing segment for the industy. Augustine Mano, managing director of the Mineral Resources Development Company, told OBG, “If I look at all the opportunities available in PNG, I have no doubts that tourism represents the future, as the country is becoming increasingly attractive for business travel.”
This dynamic is beginning to change, however, as cruise tourism begins to pick up and visa regulations are loosened for Australians, the country’s largest source market. MICE and sports-related tourism are also bright spots. The government is working to boost arrivals by increasing promotional efforts in markets that are already sources of tourists, but is also expanding in markets that it believes have significant potential. China is one such market, although some industry players question the attractiveness of a niche-destination like PNG to the Chinese, who generally prefer packaged-tour holidays. They believe that the country’s unique offerings – its pristine natural environment and one-of-a-kind culture – are unlikely to ever foster a mass-market tourism industry, and that PNG will be better off concentrating on developing niche offerings and visitors.
One of the major challenges facing the industry is the lack of awareness of all PNG has to offer. The other, of course, is accessibility, which has seen some improvement of late but still has far to go. Overall, the sector has much potential, and while it may not have reached Fiji’s status just yet, it has just as much to offer international travellers in search of adventure.
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