Pacific Games a boost for PNG Economy

Oxford Business Group

Papua New Guinea’s (PNG’s) tourism industry faces another tough year after being passed over for funding in PNG’s record PGK13bn ($6.16bn) budget in November 2012. However, the 2015 XV Pacific Games (XVPG) may give the sector a boost.

The Tourism Promotion Authority’s (TPA) request of PGK10m (4.74m) – 0.07% of the budget’s total – for an international media campaign was an attempt to elevate the country’s profile across international markets. The Budget Committee’s rebuttal, however, was a blow to the sector and the TPA, which has campaigned for greater commitment from the government.

While the government’s focus on the development of core services, including education, health and infrastructure, outlined in the 2013 budget is clearly of prime importance, advocates of PNG’s tourism sector have pointed to the industry’s sustainable long-term and grass roots potential throughout the country.

The TPA drew up a Tourism Master Plan 2007-17, although it does not have the funds for the plan to have maximum impact. Although the sector posted 12.8% growth in 2011, attracting 165,059 tourists, it has yet to overcome severe transport constraints.

Moreover, ongoing disputes between the sector’s three key agencies -- the TPA, the National Cultural Commission, and the National Museum and Art Gallery -- and the Office of Tourism, Arts and Culture (OTAC), has only made the situation more difficult, according to interviews OBG has conducted with sector players. While a merger of the agencies under OTAC has been outlined in the 2013 budget, relations between the parties remain sour after unilateral moves by OTAC to assume control in recent years have exceeded its mandate.

However, 2015 may prove to be the catalyst for change. Hosting the XVPG in 2015 in Port Moresby, PNG is determined to showcase its progress in the almost 40 years since independence from Australia in 1975. PNG has already billed the XVPG as “the best ever”, and at the beginning of 2013, it launched an extensive programme of renovation and development worth PGK77m ($36.47m).

Although the XVPG will be held in Port Moresby alone, it is an unprecedented opportunity to showcase all 22 provinces, which was the backbone of PNG’s “Experience the Diversity” bid. The last Pacific Games held in PNG in 1991 attracted an estimated global audience of 2.5m, yet this was before the advent of content demand by cable, satellite and web-based broadcasters, which the XVPG’s organising committee hopes to capitalise on. Moreover, the committee will be looking to incorporate attractions from around the country into the design of the events.

Hosting the games will undoubtedly provide a significant boost to PNG’s local economy, which has already begun to benefit from the construction of the $19bn, Exxon-Mobil-led PNG liquefied natural gas project. Yet the XVPG and the facilities being developed for the event will also give PNG an added edge in competing for future sporting events. While it has an established record of hosting smaller sporting events, success here will provide an important platform for sports tourism and the sector as a whole.

The hospitality and meetings, incentives, conferences and exhibitions segments may also benefit from the 2015 XVPG, once the construction work on a 9700-sq-metre International Convention Centre, currently being built adjacent to the Parliament House and the National Museum, is completed in 2015.

With sponsors already lining up to capitalise on the opportunities that the XVPG presents, including PNG’s largest bank, Bank South Pacific (BSP), the nation’s economic confidence expressed in the government’s 2013 budget is currently reflected by the private sector. However, with PNG’s poor reputation for maintenance of its facilities well established, the country cannot afford to miss its goals, nor fail to meet expectations in 2015.

For the tourism industry in particular, the XVPG is the best shot the industry has to capitalise upon largely unpaid global media coverage in the next few years. The XVPG’s organising committee has opened discussions with the TPA, airlines and industry service providers to provide potential packages to visitors, which will include tickets for the games and travel. However, details of these and their potential catchment have yet to be confirmed.

While the XVPG may yet be the catalyst for bolstering PNG’s tourism sector, there is much work to be done to ensure that not only are the games a success, but also that the country’s international profile receives a much-needed makeover.