Thailand’s medical tourism crown at risk

Medical tourism crown at risk

Reuters May 24, 2014 1:00 am

Thai coup sparks new travel warnings by some countries; medical tourists look to S Korea, RP

Thailand is in danger of losing its crown as the world’s top destination for medical tourism if foreigners looking for low-cost, quality healthcare are scared off by political unrest, especially at a time of growing competition from Asian rivals.
The Army seized power in a coup on Thursday after failing to prod bitter political rivals into a compromise to end six months of turmoil, prompting several governments to warn their citizens to think again before travelling to Thailand.
Tourism accounts for 10 per cent of the Thai economy and, of the 26.5 million people who visited last year, about 2.5 million came for medical reasons, including spa and healthcare services, according to figures from the Department of Export Promotion.
About a third of those medical tourists come from the Middle East, another quarter from Southeast Asia and nearly 15 per cent from Europe.
The months of unrest, which began with anti-government protests in Bangkok in November, already appear to be having some effect, and that could worsen if the Army’s intervention fails to put a stop to outbreaks of disorder.
Top-end Bangkok hospital Bumrungrad attracts a lot of patients from the Middle East and competes with SG Raffles Medical Group and Healthway Medical Corp in Singapore. It saw a 12-per-cent drop in foreign inpatients in the first quarter and an 18-per-cent fall in outpatients.
“News of violence that leads to adverse travel advisories or perceptions of personal safety risks can cause some medical tourists to postpone their trips for treatment, hoping that conditions will soon improve,” Kenneth Mays, senior director at Bumrungrad, said before the coup.
Thailand earned US$4.31 billion (Bt140 billion) in revenue from medical tourism in 2013, after average growth of 15 per cent a year over the past decade. That is clearly in danger, with arrivals at Bangkok’s international airport down 15 per cent in the first quarter.
Although travel to the country’s beaches and islands was holding up before the coup – as, indeed, it did after the Army last seized power in 2006 – the Department of Tourism said the overall number of visitors still dropped 4.9 per cent in the first four months of the year.
Days before the military stepped in, the Tourism Authority of Thailand cut its forecast for foreign arrivals this year to 26.3 million, which would be a five-year low, from 28 million.
“Hospitals in Bangkok are particularly hard hit, as that’s the epicentre of the unrest, while those in Phuket and other destinations are reporting downturns of 20-40 per cent,” said Josef Woodman, chief executive of Patients Beyond Borders, a US-based website that offers consumers information about medical travel.
It estimates that Thailand, with health costs 50-75 per cent lower than in the United States, for example, attracted 1.3 million to 1.8 million medical tourists in 2013, making it the world’s top destination.
Earnings at Bangkok Dusit Medical Services, the country’s largest hospital group, held up in the first quarter but Chatree Duangnet, chief operating officer, is worried about what he described as “a small hiccup in the short term”.
Bangkok Dusit has seen a drop of more than 30 per cent in patients from the Middle East this year and 7 per cent fewer patients from the United States, although it has welcomed 10 per cent more from Japan and 3.8 per cent more from neighbouring Myanmar, where healthcare is underdeveloped.
Renee-Marie Stephano, president of the US-based Medical Tourism Association, said inquiries about travel to Thailand for medical purposes had fallen 20 per cent in recent months.
If trouble persists, Thailand risks losing market share to countries such as Malaysia, the Philippines and India.
The Philippines and South Korea are already seeing more medical tourists from China, Russia and the Middle East in particular.
Kim Kyung-joo of the South Korea Tourism Organisation’s Medical Tourism Department said it might benefit from Thailand’s instability, noting that many Chinese tourists came for plastic surgery such as facelifts and nose jobs.
Kim Hee-jeong of the Korea Health Industry Development Institute said more Russians were coming. “Russian patients go on medical tours for treatment rather than sightseeing. Mongolian patients are the same.”
Manila also thinks it is winning custom from Bangkok.
“There is a spike in surgery for orthopaedics because of what’s happening in Thailand,” Philippine Tourism Secretary Ramon Jimenez said, adding that the travellers included Filipino-Americans coming home.
Manila wants to promote niche markets in orthopaedics, eye surgery, dentistry and cancer care, Jimenez said.
In Malaysia, government promotion of the country as a medical destination has helped the number of health tourists to double since 2010 to 770,134 last year, official figures showed.
The Kuala Lumpur Sports Medicine Centre has seen an increase in foreign patients in the past four months but Eric Woo, its chief operating officer, played down the impact of Thailand’s unrest, attributing it rather to promotions and good treatment.
Healthcare Berhad, one of Malaysia’s largest private healthcare providers, said it had been “aggressively promoting” its services in the Middle East.
Singapore, with some of the best diagnostics and care in the world, is also a threat to Thailand, said Woodman at Patients Beyond Borders, even if costs have risen for some years.
Mays said Bumrungrad had seen some rebound in April and May – before the coup – and, in the longer term, especially with Southeast Asia moving to closer economic union, most operators in Thailand remain upbeat.
“The world’s ageing population, combined with the inadequate or troubled health systems in many countries, will continue to drive medical travel. Our sources of growth will change as the geography of demand and supply evolves,” Mays said.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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