The competition in the end gives the teacher an impression on how well the students worked.
It should also be a motivation for the students to be better than the others. They often take competitions more seriously.
The idea is to give them some time to work in pairs to manage teamwork and to learn something about the North American tradition of Halloween. The creative part in the end should be something special for them and give a change to the normal listening-reading-writing-speaking parts.
It should be fun for them. Upon completion, students will have tons of facts and information about Halloween to share with their family and friends.