The coronavirus pandemic has devastated businesses, stagnated economies, and practically halted travel across the globe. The economic downturn pushed businesses to record financial lows, causing them to cut jobs, furlough workers or shut down operations completely. The medical tourism industry was among the hardest-hit, leading to questions about the chances of the industry surviving the health crisis.
Medical tourism has been burgeoning in the last decade, with major players consolidating strategies to form strong networks for international travel. The global medical tourism market generated more than $58.6 billion in 2018, with a strong projection to hit $142.2 billion by 2026. And it was well on its way. Rising awareness of quality and more affordable healthcare options in other destinations and the guarantee of a terrific patient care experience perked up by congenial environment and beautiful tourist attractions were the key drivers of the flourishing business.
In Asia, countries like Thailand, India, Singapore, Malaysia, and South Korea became favorite healthcare destinations for millions of Americans seeking quality and affordable dental care, cosmetic surgeries, elective orthopedic procedures, and bariatric surgeries. European countries including France, Germany, and Poland swiftly leveraged key healthcare travel drivers to model thriving medical tourism markets that garnered millions of dollars in annual revenue for them. The momentum soon spread to the middle east, with Dubai, Abu Dhabi, and Saudi Arabia establishing centers of excellence and specialist expertise to compete in the global health tourism market.
Governments and healthcare providers began to expand their strategies, incorporating key players to build a more competitive brand. In 2015, Turkish Airlines announced a 50% discount on flight tickets for people entering the country to seek healthcare. In 2017, the Indian government also offered a medical visa that allows international patients to stay up to 60 days in the country, with a chance to visit the country up to three times every year. Likewise, the UAE amended its visa policy to offer seamless and more affordable medical travel to international patients. The country’s health authority subsequently launched a medical tourism package that covered treatment costs, accommodation, transportation, and recreational activities for international patients and families that accompany them.
The strategies paid off for these countries, as air traffic into these countries for medical travel continued to soar, with the market expanding from about AED 8 billion ($2.2 billion) in 2014 to more than AED 12 billion ($3.3 billion) in 2018 in the United Arab Emirates. India’s health travel market also exploded by 18%, reaching $9 billion by the end of 2019.
But the coronavirus pandemic hit the brakes on the industry’s expansion. With a record decline in airline demand, closure and shut down of medical tourism agencies and widespread financial hardships that have wrecked many industry key players, medical tourism came to a screeching halt.
During the pandemic, almost all international flights were canceled. Although there has been a slow recovery in air flight demand since coronavirus restrictions were gradually lifted, demand still remains abysmally low. During the week of June 1, 2020, the number of scheduled flights in the US had dropped 65.1 percent compared to the demand within the same week of June 2019. Similarly, Chinese passenger travel dropped by almost 87 million passengers. According to the International Air Transport Association (IATA), air traffic revenue loss has reached $314 billion globally.
This economic contraction resulted in severe financial setbacks for many airline operators, some of which were forced to cut down jobs or shut down operations. In May, Air France KLM announced that it would retire all its Airbus A380, Airbus A340, and Boeing 747-400 fleets and that it would lower its flight capacity by 70-90%. China Airlines, the national carrier of the Republic of China, also announced plans to retire its entire Boeing 747-400 fleets without plans to replace them. Some experts have argued that the airline industry will be ravaged for years to come.
All of these come as many governments began to adopt COVID-19 immunity passports as a pre-requisite for entry into their countries in the post-COVID-19 era. Countries such as Chile, Germany, and the United Kingdom have considered using these certificates to stem influx of coronavirus-infected patients into their countries. However, not only do these certificates wrongly determine who’s protected from a second infection, it may pose a serious barrier to medical travel when air travel fully reopens.
In the midst of these, many healthcare providers have suspended elective procedures, the money maker in the medical travel business, with many top medical tourism centers struggling to stay afloat. One of Thailand’s top healthcare providers for medical tourists, Bumrungrad Hospital reported a 93.87% decline in revenue in the second quarter of this year, dropping from 724.99 million baht ($23.2 million) during the same period last year to 44.43 ($1.4 million). The hospital, which has more than 50% of its patient base from other countries, estimates that revenue would fall by 46% as international borders remain largely shuttered.
Amid these uncertainties and widespread economic slump, what’s the future of medical tourism?
Industry players are scrambling to remodel the business to fit current realities. Healthcare providers have launched telemedicine platforms to connect with both local patients and international buyers. The airline industry is also leveraging digital approaches to accelerate recovery by offering travelers digital platforms to plan their itinerary and building a data-driven operating model for the post-COVID era.
Governments and tourism companies are also beginning to offer mouth-watering travel packages to international visitors. For instance, Mexico launched the #Come2MexicanCaribbean in mid-June that offers travlers freebies including free hotel stays, car rental, and discounts at tourist attraction sites to woo travelers into the country. The same thing is happening in the southern Island of Sicily where officials offer to pay half of visitor’s flight costs and a third of hotel expenses to lure tourists into the city.
Healthcare payers are also making moves to revive the business and enhance their stake in the market. Many are now offering covid cover to support the industry. Aetna, for instance, is working with its partner hospitals to waive cost-sharing for inpatient admissions for treatment of COVID-19 or complications of the disease. Geisinger Health Plan also launched new virtual and telephonic services to allow members direct access to doctors across more than 70 specialities across the world.
But the future remains uncertain. Especially, as the trajectory of the coronavirus pandemic remains unclear. Will there be a vaccine to, at least, slow down the spread? Or will the virus become a seasonal illness that continues to infect and kill hundreds of thousands every year? The answers to these questions will determine how soon the medical tourism market will recover.
However, what is certain is that the market will be hinged on newer strategies and different models as global key players would scramble to pull millions of medical tourists to their destinations.