A profile of the tourism industry in Papua New Guinea, including recent reports, tourism organisations and a list of incentives for potential investors.

Kokoda Trail sign. Credit: Drew Douglas/Flickr

Overview

While not as important a contributor to GDP as in some other Pacific nations such as Fiji and Vanuatu, PNG’s tourism sector has nevertheless experienced growth over the past decade. Both business traveller and holidaymaker numbers have been steadily increasing each year.

In 2019, PNG received over 86,000 air visitors who spent US$205 million (K691.3 million) in the country. Business travellers accounted for 57 per cent of all visitors, while 25 per cent were tourists.

PNG is characterised as a market for ‘soft adventure’ holidays. Major attractions include the 96-kilometre Kokoda Track (with its historic association with World War Two), surfing and scuba diving, while many eco-tourists come to view the country’s virgin rainforests with their unique flora and fauna, including rare orchids, butterflies and birds. Adventure and cultural tourists brought in about 20 per cent of all holiday visitors, while bird watching and scuba diving brought in four per cent and 12 per cent of holiday tourists repectevely in 2019.

According to the International Finance Corporation (IFC), PNG has the potential to receive over 86,000 high-yield niche market tourists contributing US$286 million to the economy by 2027, increasing arrivals by 82 per cent and receipts by 70 per cent from 2018. The construction of the Coral Sea Cable from Sydney to Port Moresby will help tourism operators market their offerings.

In addition to soft adventure tourism, PNG has experienced a rise in the number of cruise ship visits in recent years. The country is also starting to build a reputation as host of major regional events, including the 2016 FIFA Under 20s Women’s World Cup and the 2018 APEC meeting.

The owners of the world’s leading five-star resorts and hotels are entering or expanding into the PNG market, most notably PNG’s largest hotel, the Stanley Hotel at Vision City, which is part of the Malaysian-owned RH Group, and opened in 2016, and the Hilton Port Moresby, which was inaugurated in 2018. Both complement the main existing business hotels, such as Airways Hotel, Crowne Plaza and remote mountain retreats and dive resorts. Coral Sea Hotels has operations in Port Moresby, Mt Hagen, Lae, Goroka and Kiunga.

The APEC Summit in 2018 substantially boosted Port Moresby’s number of high-end hotel rooms. The increase in scale and quality that now means means the capital can become a world-class regional conference venue. Port Moresby offers an estimated 2590 rooms from its hotels, including the Grand Papua, Crowne Plaza, Holiday Inn, Airways, Lamana, Laguna and Gateway Hotel.

Late 2019 saw the re-opening of the Loloata Island Resort outside Port Moresby after a complete redevelopment.

Outside of Port Moresby, the New Guinea islands region contains many small-scale resorts, especially in New Ireland, Milne Bay, and New Britain. It is government policy to develop Kokopo in East New Britain as a tourism hub for the region.

Across the country, cultural festivals such as the Goroka Show and the Rabaul Mask Festival also act as attractions for tourists.

It is commonly believed that improved infrastructure and security as well as more reliable air services and improved land tenure processes would assist the industry to develop further. Improving law and order is also considered a priority if tourism numbers are to accelerate.

Tourism organisations

The government agency responsible for promoting and developing the tourism sector is the Papua New Guinea Tourism Promotion Authority (PNGTPA). It is a statutory body wholly funded by the Government of PNG and established under the Papua New Guinea Tourism Promotion Act 1993.

The role of the PNGTPA is to market and promote the country to the world as a desirable travel destination. It is a member of the United Nations World Tourism Organization, the Pacific Asia Travel Association and the South Pacific Tourism Organization.

The peak body for businesses involved in the industry is the PNG Tourism Industry Association (PNGTIA), although individual sectors (e.g. surfing and diving) have their own bodies. The PNGTIA role is to enhance the sustainable growth and expansion of the tourism industry and its associated services with all industry stakeholders, domestically and internationally. It coordinates the nation’s biggest annual tourism promotion event, Lukim PNG Nau, which brings overseas travel agents to PNG.

Incentives

Huli Wigmen. Credit: Drew Douglas/Flickr

Investors in PNG’s tourism sector can benefit from the following incentives:

Double income tax deductions

Eligible expenditure includes expenses incurred on publicity and marketing, overseas trade shows, and bringing travel agents or other sales representatives to PNG, for the purposes of promoting PNG tourism.

Accelerated depreciation

Hotels, restaurants and recreational tourism facilities are eligible to receive additional depreciation deductions to a maximum of 55 per cent of the cost price of capital investments.

Goods and services tax exemptions

The purchase of travel and accommodation by foreign tourists prior to arrival in PNG is GST-exempt.

Double deduction for staff training

A double deduction is allowed for tourism businesses for the expenses of salaries paid to full-time training officers, PNG nationals attending full-time courses at prescribed institutions and the salaries and wages paid to registered apprentices.

Infrastructure tax credits

A tax credit is available for certain tourism companies that incur expenditure on a prescribed infrastructure development, limited in amount to 1.5 per cent of gross income each year.

Resources

Air Niugini publishes Paradise Annual (“PA”), an annual publication on PNG travel and culture, which is produced by Business Advantage International. This contains a tourism guide to every PNG province.

• Office of Tourism, Arts and Culture
• PNG Tourism Industry Association
• PNG Tourism Promotion Authority
• Air Niugini
• PNG Air

What else would you like to know?

This sector file is a living document created as a service to our subscribers. It is updated from time to time, as new information comes to hand.

Is there something else you’d like to know about this sector? Is there new information we haven’t included? Let us know in the Comment section below, or email editor@businessadvantageinternational.com and we’ll look into it.