Travel and Hospitality Industry set to tap into Asia's US$4 Billion Medical Tourism Market

Asia’s burgeoning medical tourism industry, expected to be worth at least US$4 billion by 2012, is proving a windfall for the travel and hospitality sector.

Abacus International President and CEO Don Birch said, “The lure of low-cost, high quality healthcare in Asia is estimated to be attracting more than 1.3 million tourists a year to the key locations – Thailand, Singapore, India, South Korea and Malaysia.”

“This is a new breed of travellers. They have particular needs, they are going to these locations for a specific reason, and reports are showing that their daily spend is more than double that of other tourists.” 

Government research on this rapidly-growing business shows a medical tourist spends average US$362 a day, compared with the average traveller’s spend of US$144.

“This spend alone makes medical tourists a highly-attractive niche for travel agencies and the hospitality sector,” Mr Birch said.

“What we’re seeing now is an increase in the number of service providers in the industry specialising to meet the needs of this market, with tailored packages and services, and building partnerships with treatment providers to increase their catchment of customers.”

A Growth Industry

Medical tourism is growing rapidly, far outstripping the 4 to 6% growth in general travel bookings predicted for 2006, with the number of medical tourist visits to many countries swelling by 20 to 30% a year. The industry in Malaysia, Thailand, Singapore and India, currently worth around half a billion dollars a year in Asia, is projected to generate more than US$4.4 billion by 2012.

Mr Birch said the spin-offs – which extend well beyond the medical, travel and tourism sectors – have attracted strong government interest across Asia, and efforts to woo medical tourists have added further impetus to the growth.

“This is a big and growing pie, which everyone is wanting a share of. At one level governments and government agencies want to see the economic benefits, hospitals are competing to provide treatments, and the travel and hospitality providers are also vying to claim a slice of the action.

“The opportunities are expanding all the time in the region,” Mr Birch said.

India’s medical tourism business is growing at 30% per year and is forecast to generate at least US$2.2 billion a year by 2012. Singapore is targeting to attract one million foreign patients annually and push the GDP contribution from this sector above US$1.6 billion, while Malaysia expects medical tourism receipts to be in the region of US$590 million in five years’ time.

Coupled with strong growth in Asia’s other well-established medical tourism markets, such as Thailand and South Korea, the industry is set to confidently stride past US$4 billion by 2012.

The current estimated 1.32 million medical tourists come to Asia from all corners of the world – including US and Europe but much of the travel is within Asia, Mr Birch said.

“While the long-haul market is important and growing, much of the business is Intra-Asia. Some of the key origin markets are Indonesia, Malaysia, the Middle East and Greater China. This provides a good spin-off for airlines and low cost carriers especially those providing direct flights within the region”.

More than 1 million tourists receive healthcare in Thailand, be it inpatient or day surgery at facilities such as Bumrungrad International Hospital, which offers a full spectrum of services from executive health tests to cardiac packages, cancer therapy, eye surgery, liposuction and other cosmetic options.

Bumrungrad has more than 700 internationally-trained and board-certified doctors, and a complete range of healthcare services and facilities. In 2004 alone, it treated 355,000 foreign patients accounting for a third of its total patients and almost 50% of the hospital’s revenue.

Singapore on the other hand makes world headlines for performing complex neurosurgical procedures and delivering cutting-edge medical treatment by some of the region’s leading health specialists. The Republic’s reputation for high quality medical facilities and well-trained doctors pulled in more than 370,000 visitors last year. 

The cost of treatments in Singapore, such as a hip replacement, can be less than a third of the price in the United States. In some cases, the cost is less than a tenth of what people would pay in America or Europe. India is another fast-growing destination, currently attracting about 150,000 medical tourists a year, while relative newcomer Malaysia, treated about 100,000 patients in the first half of 2005.

“Asia is a preferred healthcare destination and is set to grow further, fuelled by the relatively low-priced healthcare services available,” said Mr Birch.

But Mr Birch added that while low cost maybe a draw-card for some patients, the assurance of a good quality healthcare system is important.

“Many hospitals and medical institutions that cater to the tourist market are among the best in the world.”

India promotes its private healthcare sector as a tourist attraction, providing first-class service at a third-world price. The Escorts Heart Institute and Research Centre in New Delhi boast a death rate for coronary bypass patients of 0.8%. This compares with 2.35% for the same procedure in New York, said Escorts’ cardiovascular surgeon Mr Naresh Trehan.

Mr Birch added, “In many respects, Asia is an ideal growth environment for medical tourism, with competitively-priced, quality healthcare services in major tourist cities and connected by extensive global travel networks.”

Tapping the Tourism Benefits

Mr Birch said travel and hospitality providers have been quick to recognise the enormous potential of medical tourism in Asia and tap the benefits.

Alongside with the growing number of surgery options from hospitals, many travel agencies have developed specialised packages, including a broad choice of rehabilitation and leisure activities, which can be integrated with the healthcare options.

Hospitals and travel partners are actively working together to offer customised medical packages to travellers and their families.

Gleneagles Hospital Singapore, recently awarded the Asian Hospital Management Award in Best Customer Service, said that patients from countries such as Indonesia, Malaysia and increasingly India and Pakistan are not just travelling alone for their operations. “A typical length of stay for our patients is three to five days and often patients are bringing three to six family members with them. They need hotel accommodation as well as assistance in knowing what are the best local tours, places to eat out and areas to shop when they’re not visiting their loved ones in hospital,” said Dr Timothy Low, General Manager at Gleneagles Hospital Singapore.

“Our marketing offices throughout the region, not only reach out to inform our potential customers of the types of services we offer, but also work in collaboration with local travel agencies to arrange for special health packages that will include logistic and travel requirements,” said Dr Low.

“Such opportunities for travel agents are on the increase throughout Asia, as more patients are looking to travel to safe and trusted locations to take treatments,” said Mr Birch. “That’s why it’s important that the medical facilities and travel industry work together to create a single, compelling proposition for customers – one which is cost effective, and combines the convenience of air travel with their treatment and a well-deserved post-operation holiday at the same time – if that’s what they desire.”

However needs can vary widely between the ‘essential’ healthcare seekers – travelling by necessity, because treatment is not available locally – and the ‘premium’ medical tourists, who are typically looking for wellness or cosmetic procedures and may want first-class flights and exclusive add-ons.

Pacific Healthcare Holdings Patient Relations Manager Alison Lim said, “our International Patient Liaison Centre has seen an increase in these “premium” medical tourists seeking high end elective treatments like titanium dental implants, complex cosmetic procedures as well as deluxe health screening.”

An emerging trend is the bundling of five-star healthcare services with unconventional post-operation treatment. India is providing traditional recuperation forms such as yoga and naturopathy, while Thailand is promoting its ancient Thai herbal remedies to the West, Middle East and Far East.

Singapore Tourism Board Healthcare Services Director Dr Jason Yap commented, “Medical travel is often seen as adding ‘medical services’ to the usual tourism, but in many ways, it is more the extending of current medical care-sharing processes across international borders and the expansion of choices for patients on where they can get their healthcare from. The stakes are higher for medical travellers and a bad experience can result in long term scars and suffering. We must not forget that these are patients we are looking after, not just the hale and hearty traveller.”

To create awareness and market their medical services, Singapore’s Raffles Hospital works with 50 agents in 12 countries. Parkway Group Healthcare has marketing offices in 15 countries including China, India, Bangladesh, Sri Lanka, Vietnam, Brunei, UAE, Brittan, Russia, Canada, Indonesia and Malaysia, which last year helped attract over 17,000 warded patients and 140,000 outpatients.

Thailand’s Bumrungrad International Hospital appoints Flight Centre North America as its preferred travel provider for patients travelling to the hospital and Diethelm Travel Thailand to offer support services for inbound patients.

Mr Birch said, “In this competitive landscape, everyone is looking for an edge: Governments are collaborating for mutual benefit; hospitals are creating incentives to retain their best medical talent; and travel agents and hospitality providers are forming partnerships and offering value-added packages”.

“Increasing public awareness of the medical tourism options, greater confidence in foreign hospitals and satisfaction with the tourism elements will be the catalyst for future growth.”

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