Holiday Inn Express Port Moresby is the latest in a succession of new hotels opening – or set to open – in Papua New Guinea’s capital. Business Advantage PNG asks InterContinental Hotels’ Tim Pollock where this three-star property fits in PNG’s hospitality market, and discusses the challenges of running a hotel in PNG.

Last month, after a few delays, the 199-room Holiday Inn Express opened its doors for business in Port Moresby’s Waigani district, right next to the existing 153-room Holiday Inn and its 86 apartments.

Majority-owned by PNG interests, including Nambawan Super and Melanesian Trustee Services, the hotel is managed by one of the world’s largest hotel companies, IHG (InterContinental Hotels), which also manages its sister Crowne Plaza hotel in Port Moresby’s CBD. IHG has an 18% stake across all three hotels.

Worldwide, IHG manages nearly 2400 Holiday Inn Express hotels, but the Port Moresby Holiday Inn Express is actually the first hotel of the brand to open in the Australasia/Pacific region (Holiday Inn Express is set to debut in Australia next year).

‘Select service’

‘The Holiday Inn Express brand is what we call a “select service” hotel,’ explains Tim Pollock, Area General Manager for IHG in PNG. ‘It provides everything you need and nothing you don’t.’

IHG’s Tim Pollock

The room rate (the Holiday Inn Express is more than K100 cheaper a night than the adjacent Holiday Inn) is kept to a minimum by only providing the services guests want while still providing a high level of comfort and amenity. There is no porter service or room service as this is not what Holiday Inn Express guests are looking for. But there is a small dining menu, and both breakfast and internet are included in the room rate.

Consistency is the key too. Every room is the same size—22 square metres—and, while compact, provides everything the business traveller on a budget needs—an ensuite, TV and work desk. There are two sleeping configurations—queen bed or two single beds.

‘Overseas, our main competition is quite varied, with the brand able to compete very well against other hotels in the mid-scale market,’ notes Pollock. ‘In Port Moresby, we’re competing with hotels like the Lamana, Gateway and Ela Beach.’

The cost of hotel rooms

During the PNG LNG project construction boom, hotel tariffs in Port Moresby rose significantly in response to higher demand. With the boom over and some hotels experiencing lower occupancy rates, Pollock thinks hotel prices in the capital are no longer over-inflated.

Dining facilities at the Holiday Inn Express

In recent years, Port Moresby has also welcomed the Grand Papua and Laguna hotels and the refurbishment and expansion of established properties such as the Ela Beach Hotel and Airways.

With more hotels, such as R H Group’s 400-plus key Raintree Hotel at Vision City and PNG’s first Hilton Hotel in the pipeline, the days of struggling to find a room in the nation’s capital may disappear.

‘When the Raintree opens, we will have the most supply we’ve ever had in the Port Moresby hotel market,’ notes Pollock.

High costs

He observes, however, that there is a limit to how far room rates can fall, even with the extra competition.

Costs associated with running a hotel are far higher in Port Moresby than they would be in overseas markets.

‘We pay more than double for electricity what a hotel a third of the size of ours would pay in Australia ’ he says by way of example, noting that increased competition between hotels is seeing the introduction of value-adding—free internet, for instance—instead of reduced rates.