The healthcare and medical devices markets of many emerging economies are poised to benefit from a revival of medical tourism in 2022 as strict travel restrictions around the world are relaxed.
Medical tourism is the term used to describe people seeking elective and non-emergency treatment in a country other than where they reside. It is driven primarily by consumers in developed economies that have high healthcare costs, and by consumers in developing economies seeking better quality treatment abroad.
While medical tourism is ubiquitous across the world, many countries stand out as key destinations for medical tourists and are supported by specific policies by national governments to drive growth. They include developed nations such as the United States, Canada and the United Kingdom and significant emerging markets such as Thailand, Turkey, Brazil, Mexico, India and Malaysia.
Tourist numbers in 2022 are expected to rebound significantly following two years of disruption as a result of the pandemic, although arrival numbers will likely still be below pre-pandemic levels in many countries.
Over 2022, we forecast arrival numbers to increase substantially in many of these leading emerging markets for medical tourism. However, in many emerging markets such as Thailand, Malaysia, South Africa, Brazil and India, arrival numbers will still be depressed compared to 2019 levels. Mexico and Turkey will see the greatest recoveries, with forecast arrivals for 2022 comparable to pre-pandemic 2019 levels.
Governments and businesses are taking measures to support and revive their respective medical tourism sectors. Thailand is a leading destination for medical tourism, supported by its highly developed tourism industry and low-cost, high-quality treatment services.
The Thai government in November reopened the country to foreign tourists as part of its strategy of learning to live with Covid-19. And while the emergence of the Omicron variant has led to a suspension of quarantine-free entry, the Phuket Sandbox programme remains an option and bookings for the province are said to be healthy.
Hospitals and businesses in Thailand are offering Covid-related services as well as seeking to revive medical tourism, with some providers offering alternative high-end quarantine resorts for incoming medical tourists.
Turkey is another major destination for medical tourism supported by its strategic location at the intersection of three continents, hosting around 700,000 medical visitors each year pre-pandemic. The government has sought to promote the medical tourism industry through the creation of a new state-owned agency, International Health Service (known locally as Ushas) in 2019 to promote and regulate health tourism.
Revenues from medical tourism can be a substantial source of income for some emerging economies and the resumption of medical tourism will support short-term growth in healthcare and medical device markets.
In Turkey, the share of health expenditure in tourism increased from 1% in 2002 to 4.5% in 2020, according to data from Ushas. The country recorded over US$1 billion in revenues in 2019 for foreign visitors and citizens living abroad visiting for health and medical reasons. This figure dropped to just over $500 million in 2020 amid the pandemic and decline in international arrivals.
In India, the government has sought to attract visitors seeking healthcare and expand the country’s medical tourism industry, which the Ministry of Tourism estimated could be worth as much as $9 billion. India is a popular medical tourism destination for neighbouring countries, with the highest medical tourist numbers coming from Bangladesh, Afghanistan, Iraq and Oman.
Mexico’s medical tourism industry benefits strongly from its close proximity to the US, with many border towns key destinations for American medical tourists. Over one million visitors from the US alone are estimated to travel to Mexico for medical treatment each year, representing a substantial source of income for Mexico’s healthcare and medical device markets.
Rises in Covid-19 case burdens or the emergence of new variants and subsequent travel restrictions remain a risk to the recovery of the medical tourism sector over 2022.
The tourism industry overall will continue to be exposed to Covid risks for the duration of the pandemic, specifically from potential restrictions on travel resulting from high case numbers. Travel restrictions will impede tourists seeking medical treatment abroad and may weigh on the growth of healthcare and medical device markets in many key emerging markets with a greater emphasis on medical tourism.