Medical Tourism

1. FocusOn: Medical travel – fad or focus for hotel operators and investors? 1
Focus On
Medical travel – fad or focus for
hotel operators and investors?

2. 2 FocusOn: Medical travel – fad or focus for hotel operators and investors?
Contributors
Aradhana Khowala, London
Karen Wales
Vice President Research, Asia Pacific
karen.wales@ap.jll.com
Jones Lang LaSalle Hotels, the first and leading global hotel investment services firm, is uniquely positioned to
provide both the depth and breadth of advice required by hotel investors and hotel companies, through a robust
and integrated local network. In 2007, Jones Lang LaSalle Hotels provided sale and purchase advice on 259 hotel
transactions globally; representing a combined value of US$13.9 billion, a total of 54,763 hotel rooms in 84 cities.
In addition advisory and valuation services were provided on 660 assignments globally for 182,048 rooms across more
than 300 cities. The global team comprises 270 hotel specialists, operating from 31 offices in 18 countries. The firm’s
advice is supported by a dedicated global research team, which produced over 45 publications in 2007 in addition to
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and large portfolios to select service and budget hotels, resorts and pubs. Their services include investment sales,
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Lang LaSalle Hotels’ clients have access to the resources of its parent company, Jones Lang LaSalle (NYSE: JLL).

3. FocusOn: Medical travel – fad or focus for hotel operators and investors? 1
Medical travel – the elusive panacea?
Introduction
Fancy a nip and tuck as part of your fortnight in paradise? A spot of liposuction to show off that
brand new swimsuit? Or even cardiac surgery in a world-class private hospital on the other side of
the world? The multi-billion dollar medical travel sector could be just what the doctor ordered for the
tourism industry.
In the past, the wealthy elite of developing nations used to fly to industrialized nations for their health
care needs. Today, that trend is being reversed. People from developed nations are flying in to
Thailand, Singapore and India for high-quality medical care and combining it with a restorative holiday.
Inexpensive air travel, cutting-edge information technology and international accreditation programs
have opened up a world of options for patients – and a potentially lucrative niche market for hotel
operators.
Latest estimates from McKinsey & Company and the Confederation of Indian Industry - cited in Laura
Moser’s “The Medical Tourist” and Bruce Stokes’ “Bedside India” - put gross medical tourism revenues
at more than $40 billion worldwide and with a determined effort from healthcare and hospitality
organizations, along with enthusiastic support from governments, most pundits think this rapid growth
could see the industry rise to $100 billion by 2012 . And it is not only the tourism operators and
medical industry that will benefit from this trend: governments and other corporates will take a share of
the spending power of medical tourists, making an important contribution to wider economic growth.
With an ageing population in many developed nations, a growing obsession with wellness and ever-
increasing waiting lists for elective surgeries, hotel operators and investors would be wise to watch
this emerging market. The medical travel sector could be an important money-spinner for the industry,
as prospective patients often travel with family members, have a longer length of stay than leisure
travelers and book many months in advance. This segment of the tourism market is, importantly, not
tied to the vagaries of seasons or climatic conditions so it may make up a profitable and reliable base
business for hotel operators. For investors, especially in the current market climate with uncertainties
surrounding the discretionary nature and higher cost base of travel and tourism, medical travel would
be shielded and should remain one of the most resilient of all travel segments.
Rather than cannibalizing existing businesses with tourists substituting holidays with medical travel,
early indications highlight an augmenting of current travel trends. Hotel operators, Intercontinental
Hotels Group, Global Hyatt Corporation, and Marriott International have already entered the foray
and formed strategic partnerships in key geographies across the world. Investors also have the
opportunity to capitalise on opportunities this sector presents by expanding with existing operators or
attracting new ones into this niche market.
Medical Tourism has the potential to become a significant tourism segment with investment
opportunities ranging from large scale hotel developments adjacent to city hospitals or specialist
offerings with some minor modifications to existing product. In either scenario, the amount of
incremental capital expenditure will depend on the size and opportunity within the market and should
be a key consideration for any investor.
1

4. 2 FocusOn: Medical travel – fad or focus for hotel operators and investors?
Key drivers for the industry
Push Drivers – Organisation Over 40 million Americans have no health insurance at all, and
millions more are forced to forgo elective procedures that do not
for Economic Co-operation and qualify for insurance coverage.
Development (OECD) Drivers
Increasing National Health Expenditure in USA
Ageing population and changing demographics
The population of OECD countries is ageing. By 2040 some 30-40% 4,500 25
of the population of developed nations will be over 60 years old, up 4,000
20
3,500
from the current 20-25%. Baby boomers, armed with wealth and the 3,000
15
desire to live longer, healthier lives will be prime targets for medical
GDP ($bn)
% of GDP
2,500
2,000
travel – whether it be preventive, cosmetic, curative or corrective. 1,500
10
This affluent generation, with a taste for adventure and a pragmatic 1,000 5
eye on the ever-increasing waiting lists for elective surgery in their 500
0 0
own nations, may opt to venture abroad for their medical needs.
19 0
63
19 6
69
19 2
75
19 8
81
19 4
87
19 0
93
19 6
99
20 2
20 05
20 E
20 1E
20 E
E
6
6
7
7
8
9
9
0
08
14
17
19
19
19
19
19
19
19
20
1
Percentage of Population above 60 years % of GDP (RHS) National Health Expenditure
Source: US Bureau of Census, International Data Base, Merrill Lynch
40%
Japan 26%
40%
Italy 26%
In some European countries, the healthcare system is so stretched
36%
Germany 25% that it can take a considerable amount of time to get medical care.
France 21%
32% Many popular operations, such as cardiac and orthopedic surgeries,
31% have waiting times of more than 18 months. It is these surgeries,
UK 21%
along with cosmetic procedures, that developing nations may be
25%
US 17% able to capitalize on in their bid to lure medical tourists abroad.
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
The UK and European markets are smaller, due to the universal
2040 2004 provision of publicly-funded healthcare. Nevertheless, the system
Source: US Bureau of Census, International Data Base, Merrill Lynch has its own challenges, with significant waiting times for many
surgical procedures. Almost all procedures have waiting lists with
some up to two years and, in the case of cosmetic procedures, this
can blow out to five to eight years. According to a recent survey
Income vs Expenditure Trends in Elderly Households (65 Years+)
by health tourism website, Treatment Abroad, about 50,000 British
38,000 tourists traveled abroad for treatment in 2006, spending £161 million
36,000 – 25% more than in 2005. Most of the surgeries were cosmetic,
34,000
32,000 including breast augmentation, tummy tucks, liposuction and
30,000 facelifts, worth an estimated £50 million. The most common elective
28,000
26,000 procedures were hip and knee replacements, laser eye surgery and
24,000 cataract removal, worth £37 million. Dental procedures, particularly
22,000
20,000 implants, are another lucrative market with 20,000 British people
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 traveling abroad every year for their teeth – spending a combined
£50 million.
Income after Taxes Average Annual Expenditure
Source: Bureau of Labour Statistics, US Department of Labour Canada also has a universal healthcare system and a strong
political commitment to keep it as such, with the requisite long
waiting lists for many popular surgeries. Budget cuts have seen
High cost of healthcare in industrialized nations 30% of healthcare expenditures in Canada placed outside the public
The ageing population in the developed world has put upward system. Consequently, about 32 million Canadians are potential
pressure on healthcare costs in OECD nations. Healthcare in the medical tourists.
US makes up 16% of GDP, up from 8% in the 1970s and is tipped to
reach 20% by the middle of next decade. Nevertheless, millions of
Americans find themselves unable to pay for their healthcare needs
because they are either uninsured, uninsurable or underinsured.

5. FocusOn: Medical travel – fad or focus for hotel operators and investors? 3
Pull Drivers – How developing nations Overall cost savings
are meeting this demand
Lower operating costs for hospitals in the developing world enable
a dramatic reduction in the cost of many surgical procedures. If we
Affordable and quality alternatives take the example of a cardiac procedure in the US, the cost savings
In Asia Pacific, countries such as India, Malaysia, the Philippines, of undertaking the same surgery in a developing nation are almost 50-
Singapore and Thailand are developing first-class facilities with highly 75%. This saving of US$15,000 enables medical tourists to purchase
skilled medical specialists, many of whom trained abroad. These a round trip air ticket, recover in a five-star resort, buy a new wardrobe
hospitals offer highly-qualified and board-certified physicians, top and return home with money to spare. In their report “Barriers to
tier nursing staff and medical technicians, and highly personalized Movement of Healthcare Professionals”, the Centre for International
care. This translates into high success rates for complicated surgical Trade, Economics & Environment in collaboration with World Tourism
procedures and high patient satisfaction rates. Organisation (WTO) Cell, and Ministry of Health & Family Welfare,
Government of India, suggests that a knee replacement can be
Doctors in these nations can operate at far lower costs because performed in Thailand at one-fifth of the cost incurred in developed
medical malpractice insurance is much cheaper. With lower countries and laser eye surgery worth US$3,700 is available in many
litigation expenses, lower salaries and lower overheads, hospitals in countries in Asia for around US$730.
developing countries can offer high quality medical care at a fraction
of the cost of their developed peers. Global Cost Differences for Cardiac Surgery (US$)
People’s readiness to venture abroad, which has been enhanced 30,000
by rapid globalization, makes medical travel a far more appealing
25,000
prospect now than even a decade ago.
20,000
Cost in US$
Accreditation and assurance 15,000
Standards for medical facilities across the world are becoming
10,000
increasingly transparent through internationally recognized
accreditation and quality certification schemes such as Joint 5,000
Commission International (JCI) and the International Organization 0
for Standardization (ISO). Managerial oversight from world- United United Malaysia Singapore Thailand India
States Kingdom
renowned medical providers like Mayo and Cleveland Clinic and
Destinations
Harvard Medical School has gone a long way towards boosting Source: “Apollo Hospitals – First-World Health Care”; Oberholzer-Gee, Khanna and Knoop;
consumer trust. Harvard Publications, 2007
Access to information
Advances in information technology have opened up a world of Overall, a compelling combination of convenience, quality assurance
options. The internet plays a key role in providing information on and affordability have aligned to offer real, high quality medical
services and costs worldwide, with websites enabling customers to alternatives to medical tourists faced with significant costs or waiting
select hospitals, make travel arrangements and book all-inclusive times at home. Rather than waiting 18 months for a hip replacement
packages. Prospective patients can research available options, in the UK, patients could opt for immediate surgery in India at a price
compare costs and contact providers for detailed information. They that is within the reach of many. Waiting lists are unheard of in these
can compare hospital accreditation, doctor’s credentials, review places and with extensive pre-visit consultations and sharing of medical
patient testimonials and communicate directly with service providers records before the actual trip in most cases the patient can be attended
and medical specialists. to immediately on arrival.
Ease, affordability and growth of international travel
One of the key drivers of medical travel has been the ease and
affordability of international travel. The continued development of low
cost airlines has made air travel affordable and accessible for many.
The International Air Transport Association (IATA) expects a 4%
average annual growth rate in international passengers between 2007
and 2016, equating to 971 million passengers worldwide by 2016 – an
increase of 315 million passengers within a decade.

6. 4 FocusOn: Medical travel – fad or focus for hotel operators and investors?
Key medical travel destinations
Patients with no insurance coverage Patients seeking to cut short their waitlists
• These patients come from developed countries that either have • These patients, also primarily from developed countries such
no, or inadequate, health insurance coverage. as the UK and Canada, face long waiting lists for non-elective
surgery and other critical procedures.
• Many come from Europe, Australia and Japan but the bulk are • Many of these individuals choose to pay for medical treatment
from the US. abroad to avoid long waiting lists even though the national health
care system ensures free treatment for all.
Patients seeking affordable cosmetic surgery Patients seeking specialised care
• This group includes individuals from Europe, Australia and Japan • Includes individuals seeking quality-assured often specialized
with a significant number again coming from the US looking for care that is unavailable or in short supply in their own countries.
affordable cosmetic procedures which are not covered by most
national health insurers.
• Increased demand for surgical procedures such as facelifts, hair • A significant number come from the Middle East with destinations
transplants, dental treatment and liposuction, as well as non- ranging from Jordan, Saudi Arabia and Bahrain, to more distant
surgical procedures such as botox and hair removal, and the countries like Malaysia, Thailand and the US. Many people from
relatively high cost of these procedures drives people to find more Bangladesh and Nepal go to India for medical treatment. Medical
affordable alternatives abroad. travel from Indonesia to Malaysia, Singapore and Thailand is also
increasing.

7. FocusOn: Medical travel – fad or focus for hotel operators and investors? 5
Opportunities for hotels Which product appeals?
Medical travel is a burgeoning market which is aggressively
Key benefits Type of medical
being developed by both public and private sectors, healthcare
tourists
organizations and the travel sector. There is enormous potential for
partnerships between hotel chains, property developers, airlines, • Close to hospitals, • Suits patients
insurance companies and financial institutions. These partnerships airports and city requiring immediate
are vital as medical travelers need the security and peace of mind City centre centre. care or corrective
provided by purchasing an all-inclusive package for their trip, as they hotels surgery with restricted
will not want to leave any part of their visit to chance. Developing movement in cities
these tailored packages for medical tourists will enhance the next to hospitals
professionalism of the industry and allow for greater transparency • Secluded, out of • Suits patients seeking
and consumer trust. reach, quiet locale, cosmetic procedures.
Rural hotels ideal for recovery in
Medical tourists travel abroad seeking three different types of care: anonymity.
preventive, cosmetic and curative or corrective. Depending on their • Comfort, wellness • Ideal for those
requirements, they may opt to spend their time in a hospital, hotel facilities, peace and seeking reventive
or health spa. This flows into multiple niche markets that can be Resort hotels nature. and wellness,
targeted by hoteliers, including the wellness market, with an aim of rejuvenation and
illness prevention, relaxation and general wellbeing. relaxation.
• Long recuperation • Suits patients
time, family who are travelling
Long stay/ accommodation, for corrective
Medical Tourism Serviced long vacation. or preventive
apartments treatments, especially
with families.
Preventive Cosmetic Corrective/Curative
Clearly a specialist medical hotel is not an option for all patients;
in fact those that stay are carefully vetted. The patients must be
Cosmetic medical Surgical procedures stabilized when they arrive from surgical centers and hospitals in
services like like transplants, the area. Those undergoing such procedures as joint replacement,
liposuction, dental cardiac operations, hernia repair, cosmetic surgery and liposuction can comfortably
implants, breast hip/knee use such medical hotels. Those receiving outpatient chemotherapy
augmentation replacement treatment or those in need of physical therapy can also use them.
The majority of patients come as planned admissions and may stay
for up to 21 days. These specialist medical hotels also offer respite
care, giving families a break from caring for sick relatives.
Services for specific Wellness services
illness prevention like spa, massage,
- ayurveda, yoga
accupunture

8. 6 FocusOn: Medical travel – fad or focus for hotel operators and investors?
Where are the profits? Impact on occupancy and rate
While hotels targeting medical tourists have a broad spectrum of Medical tourists offer a distinct advantage for hoteliers with bookings
services to choose from, operators and investors need to focus on often made well in advance and guests staying longer than leisure
those services that will offer the largest profit margins for minimal travellers. The high probability of medical tourists travelling with
additional outlay. family members also presents an opportunity for additional room
nights.
Wellness Alternative Cosmetic
For a 300-room hotel, with an average occupancy of 70%, a mere
Services Spas, Ayurveda, Dental care,
12 additional room nights from medical tourists could effectively
offered stress relief, Siddha, plastic surgery,
mean a 4% uplift in occupancy over a year. As guests with special
rejuvenation treatment breast
needs, hotels would be justified in charging a premium rate and
centers. for diseases enhancement,
be able to block rooms well in advance. This allows for better
e.g. arthritis, tummy
revenue management. Nevertheless, hotel operators and investors
rheumatism reductions, skin
must ensure they do not incur extra operating costs from providing
treatments
additional carers, transport to and from medical facilities and other
Profit High Medium Medium modifications like panic alarms in bedrooms.
margins for
hotels
Mixed-use developments
Thailand, India, Cuba, Another emerging trend is mixed-use developments, with hospitals
Key players
India, Thailand Thailand, and hotels building for the future. Hotels are increasingly seeking
Eastern Europe, Brazil, locations close to hospitals. The Singapore Marriott Hotel is within
Turkey Mexico, five minutes walk from the renowned Mount Elizabeth Hospital in
Eastern the centre of the city, as well as other hospitals popular with medical
Europe, tourists.
Philippines,
Singapore In Panama, the opening of the Punta Pacifica Hospital has sparked
a raft of developments nearby. The hospital is the first in Latin
America to be affiliated with Johns Hopkins Medicine, one of the
The wellness market offers the highest profit margins for minimal United States’ most respected healthcare providers, and the
additional cost. With stress being declared as one of the causes of Trump Organization is building the Trump Ocean Club adjacent to
serious diseases, it is not surprising that people want to manage the hospital. Elsewhere, this trend is being replicated. Narayana
their lifestyles more carefully and invest in wellness products and Hrudayalaya, a specialty cardiac institute in India’s Bangalore is
services. building ‘Narayana Health City’, a 5,000-bed specialist hospital
which will include a five-star hotel in its grounds to accommodate
The spa industry comprises several revenue centers with sales medical tourists.
extending into the leisure, lifestyle and wellness industries. A typical
resort spa offers traditional spa treatments as well as fitness, yoga,
retail and food and beverage outlets. This combination of separate
but complementary business units magnifies profit potential for hotel
investors and offers a diversity of experiences for medical tourists.
As travelers become more discriminating, they will continue to seek
out hotels and resorts that offer a complete array of amenities. Medical
spas, medical travel and rehabilitation at desirable destinations will
play a large role in the new generation of spa resorts. In Dubai
alone, there are at least 120 spas, health clubs and clinics offering
wellness services. By 2015, it is predicted that the United Arab
Emirates will be amongst the top spa destinations in the world with
an estimated 200 hotels offering world-class facilities.

9. FocusOn: Medical travel – fad or focus for hotel operators and investors? 7
How can hotel operators and owners take a stake?
Conventional wisdom has it that most patients choose their 8. Reform the existing marketing cooperation – Having entered the
hospital based on its clinical reputation, location or their physician’s medical travel market, hotels may benefit from a professional
recommendations. However, a recent article in McKinsey Quarterly representative body with strict membership criteria to ensure
titled “A better hospital experience” underscores just how important high standards of care. This body should:
non-clinical factors have become, with patients also considering
factors such as comfortable rooms and convenient registration • Create a standard definition of wellness and medical vacations
processes. The study indicates that patients are increasingly willing in each country that distinguishes wellness from curative/
to switch hospitals in favor of accommodation that best serves their surgical stays
needs. • Acknowledge and establish quality management as a key
component in medical travel
Clearly, it is important that any foray into the medical travel market is • Intensify training at all levels
exhaustively planned. As new entrants to this market, hotel players • Aim for cooperation between tourism and health policy-
would benefit from joining forces with other industry and government makers
partners. So, how can hotel operators and investors break into this
potentially lucrative market? 9. Linking with local traditional medicine practitioners – Countries
like India, Hungary, Turkey and Thailand have a strong base
1. Partnerships with accredited hospitals – This is critical to ensure in traditional medicines and/or wellness and there is potential
the quality of care. Accreditation by reputable quality-assurance for hotels to promote this alongside more mainstream medical
agencies, such as JCI and ISO, could also facilitate connections travel.
with foreign insurance companies and help position the hotel
brand along with only the best hospitals worldwide. 10. Exploit the synergies in hotel and hospital operating structures
– Hotels and hospitals should learn lessons from each other
2. Partnerships with international health insurers – Concerns about and explore the potential of using management contracts or
the quality of care and clinical expertise in developing countries leases to manage a medical hotel.
has led to a push for both insurance and regulatory regimes.
More and more private insurers are joining forces with accredited Hotel operators, investors and their partners in the healthcare sector
hospitals. By forming partnerships with international insurers, have a mutual interest in working towards these recommendations.
hotels can target customers with portable health insurance. This approach will boost their credibility and allow for streamlined
access to potential customers. With opportunities for travel agents
3. Partnerships with government – Hotel companies can align their and hospitality providers on the increase, and with more and more
interests with governments which are actively promoting medical patients looking to travel to trusted locations for their medical care, it
travel and, through this, gain the ability to blanket market their is important that the medical and hospitality industries work together
services. to create a single, compelling and safe proposition for prospective
patients.
4. Act systematically and undertake research – Hotels need to
understand what medical tourists value in the non-clinical Recent examples of strategic partnerships between hotel operators
aspects of their treatment and then decide how and when to and the global medical industry
invest to meet those expectations.
• Ascott Residences in Kuala Lumpur when completed will be part
5. Agreement with hospitals for assured room nights – One of of an integrated development that will house one of Malaysia’s
the key concerns with a hotel serving medical guests is the leading medical, heart and diagnostic centres, HSC Medical
prohibitively high operating and fit-out costs. If a hospital were Centre.
prepared to underwrite the project or usage by providing a
guaranteed number of contracted room nights, this could make • Intercontinental Hotels Group has partnered with the Medical
the project viable. Tourism Association, an international, non-profit association
made up of the top international hospitals, insurance companies,
6. Selective investment in what really matters – Hotels considering healthcare companies, medical tourism companies, and other
any expensive investment aimed at winning new business affiliated companies in Latin America to spearhead an initiative
must balance the priorities of hospitals and patients with the to facilitate medical tourism into Latin America.
incremental cost of adding, staffing and maintaining those
facilities. • Accor group offers maternity care facilities at both the Sofitel
Melbourne on Collins and Novotel Melbourne Glen Waverley.
7. Focus on the market that you can best serve – Always
consider the hotel’s brand and capabilities and the offerings of • Global Hyatt’s Park Hyatt Sydney has partnered with Mater
competitors. For example luxury operators would likely do best Private Hospital with dedicated rooms at the hotel for maternity
to appeal solely to the niche market by offering suites with high- facilities.
end services for those who can afford it.

10. 8 FocusOn: Medical travel – fad or focus for hotel operators and investors?
Challenges and risks for hotel operators and investors
Medical tourists are a potentially lucrative niche market for hotel operators and investors. Nevertheless, the sector is not without its
challenges.
• Impact on other guests – Although hotels are used to welcoming guests of all kinds, it is not common to have stretchers wheeled through
the lobby or hotel porch every day. Some guests may complain about how this affects their experience and this might force hotels to
rethink access.
• Liability – Medical travel abroad comes with increased risk. Individuals receiving medical care overseas would need to resort to the legal
process available in the foreign country should anything go wrong, putting pressure on insurers and partners like hotels.
• Staff on-call 24-hours/high operating costs – Hotels may have to invest in panic alarms, patient friendly room layouts and ensuring extra
medical staff are on-call 24 hours a day in case of emergency.
• Competition from hospitals – Hospitals now have marketing offices that not only reach out to inform potential customers of the types
of treatments on offer, but also work in collaboration with local travel agencies to arrange special health packages. They are starting to
incorporate health spas and swimming pools and some have even built all-suite hotels to cater to foreign patients.
• Getting the mix right – Hotels need to ensure they capture the right blend of medical tourists and not overbook the rooms with one
segment.
• Just another source market – There is a danger of medical tourists becoming just another source market for hotels not worthy of investing
time, energy and resources.

11. FocusOn: Medical travel – fad or focus for hotel operators and investors? 9
Who is promoting medical travel?
Hospitals are increasingly working with medical travel facilitators and traditional travel agencies to offer competitive airfares and affordable
vacation packages to exotic destinations. Such partnerships allow all players to focus on their core business which, in the end, benefits
the patient as well as the individual businesses. Recognizing the potential for increased tourist numbers and revenues, many governments
are also keen to promote medical travel. An overview of the main players in the industry, along with their estimated earnings from medical
travel, is summarized below.
Country Arriving from Estimated earnings (US$) Strengths
India Middle East, US, UK, Canada, $480 million (2005) Cardiac surgery, joint replacements, Ayurveda and
other OECD countries other wellness treatments, dental treatments, eye
surgery
Malaysia Indonesia, US, Japan $40 million (2004) Cardiology, cardiothoracic surgery, cosmetic
surgery
Singapore Middle East, rest of Asia, Australia, $560 million (2004) Liver transplants, joint replacements, cardiac
Russia, Canada, Britain and the US surgery
Thailand US, UK, Middle East, China, Japan $1 billion (2006) Cosmetic surgery, organ transplants, dental
treatment, joint replacements
Poland Germany, UK, other countries from the $65 million (2006) Plastic surgery, dental and fertility treatments
Soviet bloc
Brazil US, other Latin American countries $4 million (2006) Plastic surgery, dermatology, weight reduction
Israel US $40 million (2006) Therapeutic spa, fertility treatments
Source: Various industry sources, Government websites
India Singapore
India’s efforts to promote medical travel took off in late 2002 when In 2003, Singapore created Singapore Medicine, a government-
the Confederation of Indian Industry and McKinsey & Co produced industry partnership to develop the city state as one of Asia’s
a study (McKinsey and the Confederation of Indian Industry, Press leading medical hubs for medical travelers, research, conventions
Trust of India, 2005) showing that medical travel in India was growing and education. The authorities identified three key growth areas:
at 30% per year and would be a US$2.2 billion industry by 2012. cardiac and eye surgery as well as cancer treatment. The
Singaporean Government plans to invest US$974 million in medical
research and has hired McKinsey & Co to consult on the project.
The Government is working with private hospital groups to
Their ambition is to serve one million foreign patients annually
address deterrents such as concerns regarding treatment and care
by 2012, up from 400,000 in 2006, and generate US$3 billion in
standards, insurance coverage and general infrastructure. As a
revenue. Private hospitals are getting onboard by slashing prices
result, the quality of Indian hospitals has improved significantly and
for tour operators.
international accreditation has increased. Insurance coverage for
treatment in Indian hospitals is also increasing. According to the
Federation of Indian Chambers of Commerce and Industry, the Thailand
healthcare market will account for up to 8.5% of GDP by 2012.
Furthermore, the Indian Government has a planned investment Thailand is one of the world’s leading healthcare destinations, with
pipeline of US$6.5 billion to encourage medical travel, including over 1.4 million medical tourists in 2006 and an annual turnover of
setting up affordable hospitals and hotels for patient’s relatives. US$1 billion. Private hospitals offer relatively inexpensive medical
In addition to the cost advantages of advanced medical care, the procedures and have concentrated on hospitality and building
Government is also promoting alternative treatments like Ayurveda, brand equity. The Thai Ministry of Public Health works closely with
Yoga and Kairali. the Thai Ministry of Tourism to promote this market segment.
Thailand also built a strong health infrastructure during its economic
boom by encouraging private and public participation. Priority was
given for foreign direct investment in the healthcare sector, with the
Government processing 3,000 foreign direct investment proposals
in just four years. The Japanese still form the bulk of medical
travelers, although Americans, British and travelers from the Middle
East are now also coming in significant numbers.

12. 10 FocusOn: Medical travel – fad or focus for hotel operators and investors?
Malaysia Eastern Europe
Although a late entrant to the game, Malaysia has become a Over the past two decades, Eastern Europe has emerged as a
significant player. The Government has formed the National significant and popular destination for health tourism. It has a well
Committee for the Promotion of Health Tourism, which cooperates established medical infrastructure built around prominent research
with private hospitals, tour agencies and other relevant bodies to hospitals at one-third of the costs seen in the developed world.
develop packages to attract health tourists. Earnings from medical Its proximity to Western Europe initially convinced tourists from
travel were estimated at US$50 million in 2005 and this is tipped to neighboring countries to consider dental treatments and cosmetic
grown to at least US$600 million by 2010. The majority of foreign surgery vacations in the East and now people from US have
patients receiving medical treatment in Malaysia are from Indonesia, followed suit. Western Europeans travel to Hungary, the Czech
Singapore, Japan and West Asia. Recently, Malaysia started working Republic and Poland for spa treatments as well as biomedical
with Thailand to explore joint promotion of medical travel. interventions. Specialized travel agencies offer a series of dental
treatments, without the high cost and bureaucratic procedures seen
Philippines elsewhere.
The Philippines has been quick to recognize the opportunities of
medical travel. It has a high-quality medical labor force, competitive
Western Europe
cost of service and wants to become the next hub for medical travel Medical patients from Western Europe travel within the continent
in Asia. At the end of 2005, it had hosted medical tourists from China, because the treatments are usually covered by insurance if the
Japan and the Republic of Korea as well as France, Germany, patient can produce a doctor’s prescription. Germany has more
the Netherlands and the United States. It aims to attract 700,000 than 250 officially recognized spa and health resorts, attracting over
medical tourists annually and achieve almost US$250 million in seven million visitors in a year. Italy has more than 200 curative spa
revenues. Building a viable medical travel industry is also seen as centers attracting approximately six million people in a year. Spas
a key strategy to address the exodus of medical professionals from have also been renowned for a long time in Greece with most of the
the Philippines, by creating job opportunities at home. centers found in coastal regions.
Latin America Dubai
Medical travel into Latin America has increased exponentially over The Middle East has become a key market for medical travel. The
the past decade, with both patients and insurance companies looking Dubai Healthcare City is one of numerous specialist ‘cities-within-a-
for viable, innovative alternatives to manage healthcare costs. In city’ in Dubai and is targeted at the healthcare and pharmaceutical
June 2008 InterContinental Hotels Group and the Medical Travel industries. The US$1.8 billion development consists of a collection
Association, an international, non-profit association representing of medical teaching institutions, 17 private hospitals and clinics,
international hospitals, insurance companies and other affiliates, pharmaceutical offices and research centers, and spas and
joined forces to facilitate medical travel in the region. This network rehabilitation centers. It includes residential villas, apartments and
will allow prospective patients to research everything from the five-star hotels and will be fully operational by 2010. The teaching
medical care itself, to the specifics of traveling, including pre- and hospital and post-graduate medical training centre in the city will be
post-procedure hotel rooms for patients and their families and a affiliated with Harvard Medical School.
variety of other amenities.

13. FocusOn: Medical travel – fad or focus for hotel operators and investors? 11
Conclusion
The medical travel industry is driven today by Asia, particularly popular destinations such as Thailand, Singapore, Malaysia and India.
International tourists flock there because of the high-quality and relatively low-cost healthcare offered. With destinations such as Eastern
Europe, Turkey and Dubai getting in on the act, this market is poised for rapid expansion in the future.
Medical travel has a host of proponents, with governments keen for tourism receipts, hospitals seeking to retain their best medical talent
and travel agents and airlines working together to offer value-added packages. Increasingly, the hospitality industry is seeing the potential
of exploiting this profitable niche market. With medical tourists willing to pay a premium, traveling with an extended family and staying for
longer periods than their leisure compatriots, hotels have realized the potential for reliable, high-yielding business that does not come and
go with the seasons.
Now, all the stakeholders must ensure that the medical travel industry offers accessible, affordable and high-quality care to cement the
reputation of this fledgling sector and allow the traveling public to make informed choices about their medical care.

14. 12 FocusOn: Medical travel – fad or focus for hotel operators and investors?

15. FocusOn: Medical travel – fad or focus for hotel operators and investors? 13
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