Papua New Guinea Niche Market Tourism Demand Assessment
Table of contents Part 1: Tourism Demand Assessment Overview 3 Part 2: Niche Market Findings and Comparison Destination Cases 8 Part 3: Unlocking Niche Market Potential for PNG 26
Part 1: Tourism Demand Assessment Overview State of Play Market Sizing Benchmarking Forward Look • Understand • Identify and • Identify and • Create tourism current evaluate 5 assess growth markets niche markets competitor scenarios destinations to • Understand • Size markets • High level determine and assess to understand investment success tourism offer potential advice for high factors for demand to growth development PNG scenarios • Analyze market perceptions 3
Tourism is Growing but Susceptible to Shocks PNG Total and Holiday Arrivals 2011 - 2017 Holiday arrivals grew at 5% Decrease in all arrivals from 2016 from 2011 to 2016 to 2017 due to elections 140,000 Holiday 120,000 Total Arrivals 100,000 80,000 Launch of ‘A Million Different Journeys’ campaign 22% bump 60,000 40,000 20,000 0 2011 2012 2013 2014 2015 2016 2017 4 Source: TPA, 2018
PNG’s Holiday Market Gap Limits Benefit Arrivals by Purpose of Visit PNG versus Fiji, Namibia and Global PNG Holiday Market Gap of 28% 80% PNG’s tourism industry is reliant on business travelers. 70% Only 25% of arrivals to PNG are holiday tourists versus 70% 53% at the global level. 60% 53% 50% 40% 37% 30% 25% 20% 10% PNG Global Namibia Ecuador 0% % of Total Arrivals for the Purpose of Holiday PNG World Namibia Ecuador 5 Source: TPA, 2018,UNWTO Tourism Highlights 2017, FBOS 2018, MET Namibia Statistical Yearbook 2016, Anuarios de Entradas y Salidas Internacionales al Ecuador 200 al 2016 - INEC
PNG is Reliant on the Australian Market Holiday Source Market 2017 Other Pacific • Focus on trekking, cultural • Emerging markets seek and historical tourism mixture of cultural tourism • Kokoda Track is main product South- and soft adventure east Asia • Growth potential for China, Japan and Korea Northeast Asia Australia & New Europe Zealand • Seeks a mixture of nature- North based and cultural activities America UNWTO Regional Categories • Cultural tourism is a key Northeast Asia: China, Japan, appeal South Korea Southeast Asia: Malaysia, Singapore, Philippines, Indonesia 6 Source: TPA, 2018
Tourism Concentration on Two Products: Kokoda Track & Cultural Festivals 2,600 Tourists Participated in the ✓ Strong community benefits Kokoda Track in 2016 ✓ Well known in existing source markets ✓ PNG comparative advantage in region ✓ Location specific limiting benefit outside geographic area ✓ Festivals are time specific ✓ Carrying capacity issues ✓ Limited product development 10,000 Cultural Tourists ✓ Not full tapping into markets to PNG in 2016 Anselmo Lastra Ben Webb
Selected Niche Market Segments Soft Cultural Bird Historical Diving Adventure tourism Watching tourism tourism Observing or Scuba diving in Visiting Visiting a Soft adventure fresh or salt Photographing sites/relics/ destination for activities that water. Includes birds in their monuments/ an indigenous are low risk only active natural habitat memorials/ cultural such as hiking, divers with services related experience. fishing, and advanced to World War 1 kayaking, certifications or World War 2 excludes trekking, bird watching and diving 8
Niche Markets were selected based on: Product availability and stage of development in PNG Comparative advantage of PNG’s tourism assets Current value of niche market to PNG Potential for niche market growth at global level Priority for PNG government and industry Sustainability: environmental, social, cultural and financial Availability of market research and definition of niche segment
Globally Niche Markets Are Large and Robust 2016 Global & PNG Niche Market Number of Trips Diving Birdwatching Historical tourism Cultural tourism Soft adventure tourism 4.9 270 357 5.5 2.5 Global million million million million million trips trips trips trips trips 13,640 5,665 460 10,000 2,200 trips trips trips trips trips PNG 36% 15% 27% 1% 6% of PNG of PNG of PNG of PNG of PNG Holiday Market Holiday Market Holiday Market Holiday Market Holiday Market 10 Source: IFC PNG Tourism Demand Assessment, 2018
Globally Niche Markets Are Powerful 2016 Global & PNG Niche Market Total Spend Diving Birdwatching Historical tourism Cultural tourism Soft adventure tourism $ 22.0 $ 453 $ 470 $ 18.8 $ 8.1 Global USD billion USD billion USD billion USD billion USD billion $ 3.3 $ 16.2 $ 32.2 $ 6.9 $ 35 PNG USD million USD million USD million USD million USD million 30% 15% 33% 3% 6% of PNG of PNG of PNG of PNG of PNG Holiday Market Holiday Market Holiday Market Holiday Market Holiday Market 11 Source: IFC PNG Tourism Demand Assessment, 2018
Price of Travel to PNG Prohibits Growth Global & PNG Niche Market Average Price per Trip (USD) Average spend per trip is higher for PNG $8,000 in most niche markets $7,071 $7,000 Cost of travel is high and will prohibit $6,000 future growth in arrivals for these segments. Impacts value for money. $5,000 $4,520 $4,000 $3,501 $3,410 $3,238 $3,116 $2,851 $3,000 $2,363 $2,000 $1,675 $1,315 $1,000 $- Cultural Birdwatching Soft adventure Historical Dive Global PNG 12 Source: IFC PNG Tourism Demand Assessment, 2018
PNG Receives More Casual Tourists than Serious Niche Tourists Casual Tourists versus Niche Market Tourists Cultural Market alignment between participation Soft Adventure and primary reason for visit for soft adventure travelers. Historical Dive Few serious divers and birdwatchers visit PNG for the primary reason of engaging in niche activities even though participation is high. Birdwatching 0% 10% 20% 30% 40% 50% 60% 70% 80% Percent of PNG Holiday Arrivals Engaging in Activity Primary Reason for Visit 13 Source: PNG 2017 IVS and IFC PNG Tourism Demand Assessment, 2018
Part 2: Niche Market Findings Full Tourism Demand Assessment Includes: Global Potential PNG Potential Global Markets • Demographics • Current markets • Number of travelers Recommendations • Trends • Growth potential • Revenue to Increase Niche • Critical • Average spend per Market Arrivals to constraints trip PNG • Average length of trip
Niche Market Traveller Profile Details Traveling Habits Demographics Avg. number of trips per year Age Top 3 key source markets Average duration of each trip Booking Habits Average spend per trip Time in advance that bookings are made Top 3 global destinations Preferred format of activity Method of booking participation
Comparison Destination Cases • Identify destinations that have harnessed the potential of a niche market • Understand their development story and key elements for success Average Spend Average Key Holiday Source per Day on Tours Length of Trip Markets Similarity of Product Offerings to Those in PNG Challenges faced by the comparison destination Potential lessons for PNG Tourism development story Understanding of marketing efforts 16
KEY TAKEAWAYS: Cultural Tourists Need Interactive Products & Itineraries • Authentic and meaningful experiences • Engage with local peoples and cultures through interactive Products tours • Culinary practices • Well-travelled and seek new and unique experiences Travel • Ease of access to information for planning Patterns • Prefer to travel independently • Mismatch between booking preferences PNG • Focus on festivals limit experiences Now • Authentic but not interactive • Itinerary development to showcase range of products PNG • Customizable tours through inbound Future • Destination awareness raising through online media Prefer independent travel Book 3 months in advance Book individually online 17 Source: IFC PNG Tourism Demand Assessment, 2018
Cultural Tourism: Namibia CASE SUCCESS FACTORS • Strong wildlife tourism • Strong enabling environment and mechanisms for community based • Need to diversify products and engage tourism new markets • Holistic product development linked to • Desire for community benefit private sector • Need to spread tourism into rural • Packaging cultural tourist products into areas customizable itineraries • Efficient and targeted marketing focused on high return on investment South Africa 24% $290 per day 16 Days Germany 17% UK 5% 18 Source: IFC PNG Tourism Demand Assessment, 2018 John Y. Can
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