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Building a medical tourism hub.
Friday, 1st April 2016
Source : Phuket Gazette

Phuket has the potential to become a leading regional hub for medical tourism, an industry that is well positioned for exponential growth primarily led by the demand for aesthetic treatments, investment opportunities in medical facilities and premises are increasingly attractive amid the backdrop of a global economic slowdown.

Despite the diminishing legacy market for 'Gender Reassignment' Surgery (GRS), more commonly known as Sex Change Operations, the market has continued to flourish by focusing on the global movement for beauty enhancement. Mergers and acquisition activity is high in Thailand’s medical sector, seeking to develop quality centers and facilities to cope with increasing demand from the growing Asian middle-class and a broader international audience.

Currently, the island’s major existing medical institutions include Phuket International Hospital (PIH) and Bangkok Phuket Hospital (BPH), while on the wellness side there are the Thanyapura Integrative Health Center, Dr Orawan, and the Radiant Medical Clinic among a growing list of new arrivals.

With Phuket’s high growth over the last decade, existing facilities have had a hard time coping with demand and now Australians and Chinese are beginning to consume more of the products and services of these medical institutions.

Nearly half of the medical tourists to Phuket come for cosmetic operations such as breast augmentation, which is the most popular procedure offered. These operations attracted more than 15,000 patients over the past five years at major hospitals. Recently, there is a surge in demand for anti-aging treatment driven by the influx of female patients from Mainland China. The number of medical tourist arrivals is rising consistently at an annual rate of over twenty per cent in recent years. The gloom surrounding the global economy has not altered the growth trajectory of the industry.

According to the findings presented in C9 Hotelworks’ recent Phuket Medical Tourism Market report, Australia has become the top nationality, making up close to half of all patients in the market and 70 per cent of cosmetic surgery clients. In light of the large number of appointment cancellations triggered by the Australian Dollar (AUD) to Thai Baht devaluation in 2015, we may see some shifts in geographic segments in 2016.

Competitive pricing is a significant advantage for Phuket in attracting travellers worldwide. The average expenditure per cosmetic surgery patient amounts to THB150,000 while the average spend on anti-aging treatments is about 80,000 baht in Phuket. These price points are attractive to the quality-conscious, yet price-sensitive visitors.

Most hospitals and clinics work with medical tour agents to promote packages that include treatment and holiday, thereby enhancing the island’s appeal to international patients.

The formation of the ASEAN Economic Community (AEC) will in part catalyze intra-ASEAN cross-border investments. Healthcare services in many ASEAN countries will not be able to serve the needs of their rising middle-class populations. Therefore, more consumers from these countries, especially neighboring Vietnam and Myanmar, are expected to come to Phuket

Expanding market demand for aesthetic treatments is expected to lead the way for more investment in the medical industry. However, as the competition intensifies, it will trigger the development of non-aesthetic medical service segments such as disease treatments, with more hospitals and clinics venturing into this area to diversify their businesses and gain a competitive edge, further enhancing Phuket’s appeal as a medical hub.

Today’s wave of investment is just one of the trends enabling the market’s evolution. Beside the opportunities in green-field and brown-field projects across the industry, we are seeing significant convergence across different industry sectors. Medical institutions venturing into providing quality recuperation accommodations to patients, and similarly hotel groups investing in healthcare services, will blur the lines between medical service providers and facilities owners.

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