Medical and Wellness Tourism
Medical and Wellness Tourism
Business Model Description
Through B2C business model, hospitals, hotels and businesses in second tier provinces can invest in medical and wellness retreats to target tourists, which will also promote local businesses and supply chain, such as sustainably produced food, herbal and spa products, local craft products, wellness and hospitality services such as day spas and traditional Thai massages. Target groups may include long-stay foreign and domestic tourists and elders. This IOA will help generate income to second tier provinces and the communities, drive development of local products and economic growth, and help the planet by reducing environmental impact of tourism sector. Investors can invest money in infrastructure and accommodations that will support companies operating medical and wellness tourism.
Chiva-Som, Thailand, is Asia's renowned and pioneering wellness destination, officially opened in 1995. Situated in Hua-Hin, a famous tourist city, the beachfront resort’s programme brings together Western diagnostic skills and Eastern philosophies to revitalise the mind, body and spirit. Chiva-som also expanded to Qatar in the name of Zulal wellness resort by Chiva-Som during the end of 2021 (1).
Ban Sabai Village is a long stay senior care resort and nursing home in Chiang Mai province, opened in 2003. It offers a large selection of spa and wellness treatments, massages, physiotherapy, occupational therapy and more to enhance well-being. It also provides specialist care for Alzheimer’s and other dementia (11).
Suan Sampran is recognized as a popular organic tourism destinationin Nakhonpathom province, officially operated in 1962. It works hand in hand with local farmers to produce organic vegetables, fruits, and health and wellness products for the farmer market. Guests can practise traditional Thai crafts, experience herbal healing treatment, enjoy Thai fine dining, visit farmer market, or tour local farms (20).
Expected Impact
Medical and wellness tourism in second tier provinces create jobs for local communities and improve access to healthcare and contributes to general well-being.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
Sector Classification
Services
Development need
A challenge for Thailand's service sector is the transition from traditional to modern services with high value-added (1). During the pandemic in 2020, up to 8.4 million people became unemployed, of which 23% were tourism jobs and 45% were in other service sector jobs (2).
Policy priority
The 13th National Economic and Social Development Plan (2023 - 2028) aims to promote service sectors ranging from 'comprehensive medical and health services', 'value tourism' as well as 'circular economy and low-carbon society', of which elements are related to high-value services (1).
Gender inequalities and marginalization issues
There is high concentration of female workers in tourism sector (3). In 2019, formal employment in the accommodation and food service industry category consisted of 702,400 female (64.8%) and 380,800 male (35.2%) workers (4). Growth in the tourism sector can help reduce inequalities in both income and employment gap between male and female workers. Due to the pandemic, women risk higher umemployment than men due to the high risk of job disruption in 'accommodation and food service' industry (5).
Investment opportunities introduction
Service sector contributed to 58.6% of GDP in 2019 (6). World Tourism Organization (UNWTO) reported that in 2019, Thailand had the 3rd highest international tourism revenue globally at USD 65 billion, and 12th highest number of foreign visitors globally at 40 million people (7).
Key bottlenecks introduction
Service sector has workforce with limited skills to deliver high-value services, which hinders growth of the service sector (1). Pandemic recovery support programs are also needed as the service sector was strongly impacted (5).
Hospitality and Recreation
Development need
Tourism accounted for about 11% of GDP or USD 66.7 billion (THB 2 trillion) in 2019, creating more than 7 million jobs (20% of total employment) (3). International visitors decreased by 95% in September 2021, compared to the previous year, with only 9% room occupancy for hotels (8). Thailand was ranked 130th of 140 countries in 2019 for environmental sustainability (3).
Policy priority
Second-tier provinces are the focused area of development as per Thailand’s tourism strategies and policies in 2025 and 2020 (9). Thailand Medical Hub strategy was also laid between 2017-2026 (10). Investment promotion measures, such as income tax exemption, is available for companies investing in community enterprises at a grassroot level (11).
Gender inequalities and marginalization issues
Tourism concentrates in the top 5 provinces where major and highly developed cities are located, receiving around 78% of foreign tourists (3). This lead to inequalities in tourism income distribution between wealthy and less developed provinces.
Investment opportunities introduction
In 2019, 3.42 million visits to Thai hospitals were made by foreign patients contributing USD 4.7 billion (THB 140 billion) in revenue. In addition, 2.8 million of those foreign hospital visits were for medical and wellness tourism, with the remaining were expatriates (12).
Key bottlenecks introduction
There can be limited access to finance for low income households and communities to invest in converting their homes into accommodations. Moreover, tourism revenue in Thailand is seasonally concentrated in during high season from December to February, consisting of 28% of all tourist visits (3). As for medical tourism, competition for medical personnel would become more intense in the future (13).
Hotels and Lodging
Pipeline Opportunity
Medical and Wellness Tourism
Through B2C business model, hospitals, hotels and businesses in second tier provinces can invest in medical and wellness retreats to target tourists, which will also promote local businesses and supply chain, such as sustainably produced food, herbal and spa products, local craft products, wellness and hospitality services such as day spas and traditional Thai massages. Target groups may include long-stay foreign and domestic tourists and elders. This IOA will help generate income to second tier provinces and the communities, drive development of local products and economic growth, and help the planet by reducing environmental impact of tourism sector. Investors can invest money in infrastructure and accommodations that will support companies operating medical and wellness tourism.
Chiva-Som, Thailand, is Asia's renowned and pioneering wellness destination, officially opened in 1995. Situated in Hua-Hin, a famous tourist city, the beachfront resort’s programme brings together Western diagnostic skills and Eastern philosophies to revitalise the mind, body and spirit. Chiva-som also expanded to Qatar in the name of Zulal wellness resort by Chiva-Som during the end of 2021 (1).
Ban Sabai Village is a long stay senior care resort and nursing home in Chiang Mai province, opened in 2003. It offers a large selection of spa and wellness treatments, massages, physiotherapy, occupational therapy and more to enhance well-being. It also provides specialist care for Alzheimer’s and other dementia (11).
Suan Sampran is recognized as a popular organic tourism destinationin Nakhonpathom province, officially operated in 1962. It works hand in hand with local farmers to produce organic vegetables, fruits, and health and wellness products for the farmer market. Guests can practise traditional Thai crafts, experience herbal healing treatment, enjoy Thai fine dining, visit farmer market, or tour local farms (20).
Business Case
Market Size and Environment
> USD 1 billion
5% - 10%
Medical and wellness tourism in Thailand had a USD 3.5 billion market value in 2018, with 2.25 million medical tourists were mostly from ASEAN, the Middle East, European Union and United States. There was 11.7% revenue growth from foreign patients, and 61 hospitals with Joint Commission International (JCI) accreditation in 2017 (2).
Indicative Return
> 25%
According to expert interview, the ROI is more than 25% due to high profit margin in the medical service industry and high-end wellness services.
Investment Timeframe
Medium Term (5–10 years)
According to expert interview, the 5-10 years investment timeframe period is due to the high capital investment in hospitality infrastructure such as buildings and equipment.
Ticket Size
< USD 500,000
Market Risks & Scale Obstacles
Business - Supply Chain Constraints
Pandemic
Impact Case
Sustainable Development Need
There is significant disparity in the geographic distribution of human resources in the healthcare sector between the urban and rural areas, predominantly Bangkok and the rural areas. There were 1,794 people per doctor ratio for Thailand and 548 people per doctor for Bangkok in 2020 (3).
Limited domestic demand for sustainably produced foods, herbs and spa products can be a barrier for entrepreneurs of wellness tourism to sustain their business.
Gender & Marginalisation
Majority of the women in the labor force work as unpaid family workers (4). Reportedly, women have more potential to spend their spare time and utilize their network on community projects.
Unlegalized status of Thailand's sex tourism is considered an issue where sex workers are often subjects of exploitations (12). Moreover, as sex work is an illegal profession, sex workers are not covered by social security, and are left without any financial support during the pandemic and lockdown (13).
Expected Development Outcome
Hospitals, long-stay rehabilitation, and wellness centers with healthcare professionals being located in second tier provinces can expand the accessibility of healthcare to people.
The presence of hospitals, long-stay rehabilitation and wellness centers in second tier provinces can increase the demand for sustainably produced foods, herbs, and spa products, which promote the local economy and employment in hospitality-related jobs for local communities.
Gender & Marginalisation
Marginalized women that do not have education and lack of opportunities for employment in the formal sector, can turn to sex tourism. Wellness and medical tourism can reduce exploitation of female workers in sex tourism.
This IOA could promote women employment and narrow income gaps due to the fact that the majority of women workers are concentrated in services and retail sectors or 4.4 million women in 2015 (5).
Wellness and medical tourism are good alternatives to sex tourism that can provide income sources to women workers.
Primary SDGs addressed
8.9.1 Tourism direct GDP as a proportion of total GDP and in growth rate
International tourism direct receipt contributed to 12% of GDP in 2019 and had 6% growth rate from 2018 (6).
According to 20 Years National Strategy, Thailand aims achieve 28% of GDP from tourism by 2032 (7). Also, Thailand set target for revenue from medical and wellness tourism to increase from 2017 to 2037 by 10% (23).
10.1.1 Growth rates of household expenditure or income per capita among the bottom 40 per cent of the population and the total population
Growth rates of income per capita among the bottom 40% of the population was 4.6% in 2019 (14).
Thailand aims to achieve at least 15% average growth rates of income per capita among the bottom 40% of the population by 2022 (14), and to be higher than that of the national average by 2030 (15). Thailand also set target for ratio of tourism income between major cities and smaller cities to be 60:40 by 2037 (23).
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Corporates
Indirectly impacted stakeholders
People
Planet
Outcome Risks
Medical malpractice laws in developing countries are weak compared to developed countries.
The average malpractice recovery in Thailand is roughly USD 2,500 or about 0.8% of the United States average (22). This is an improvement area for Thailand to build trust for medical tourists.
Gender inequality and/or marginalization risk: Wellness and medical tourism can compete for doctors and medical resource from the healthcare sector.
Impact Risks
Unexpected impact risk: Medical and wellness tourism may increase the demand of health workers for tourists leading to the medical staff shortages in other areas, in particular in rural areas.
Stakeholder participation risk: The price of medical and wellness services should be made affordable for the locals in second tier provinces to enable access.
Stakeholder participation risk: The development of a local supply chain, i.e., local sustainably produced food and spa supplies, wellness workers, etc., should be emphasized. Otherwise, the opportunity to contribute to the local community may be missed.
Gender inequality and/or marginalization risk: Wellness and medical tourism can require high investment due to targeting wealthy patients, thus excluding small-scale and low income communities.
Impact Classification
What
Significant and positive outcomes from eco- and community-based tourism are job creation, environmental conservation, sustainable agricultural practices, and cultural asset preservation.
Who
Local communities received benefits from higher income, healthy lifestyle, and sense of community.
Risk
High price of medical and wellness services and exclusion of local supply chain may reduce the benefits for the locals.
Contribution
Additional contribution is likely better than base case as beneficiaries include only include certain communities that are compatible for tourism.
How Much
Scale: NA Depth: 28% of GDP from tourism, of which will create high impact if focused on sustainable tourism (24). Duration: Medium-term. Will have to limit growth to not exceed carrying capacity.
Impact Thesis
Medical and wellness tourism in second tier provinces create jobs for local communities and improve access to healthcare and contributes to general well-being.
Enabling Environment
Policy Environment
Thailand 4.0 Policy aims to support an S curve industry, including affluent medical and wellness tourism (8). This policy supports the IOA by targeting medical and wellness tourism as high value-added industry that the government will focus its effort on.
Strategy to develop Thailand into International Health Center (Medical Hub) (2017 - 2026) has 4 focus areas including wellness hub, medical service hub, academic hub, and pharmaceutical and wellness product hub. The promoted areas range from infrastructure to human capital and marketing (16). This policy supports the IOA by fully promoting ecosystem for medical and wellness tourism.
BCG Model (Bio, Circular and Green Economy) addresses medical and wellness tourism with a target to achieve a Global Wellness Travel Ranking of top 5 by 2026 and increase employment related to the wellness industry by 20% from 2020 (21). This policy supports the IOA by targeting medical and wellness tourism as main industry that the government will support, and also set target that will drive investment.
Second National Tourism Development Plan (2017-2021) aims to improve the quality and diversity of products and services for medical, wellness, and responsible tourism, and promote niche-market branding (19). This policy supports the IOA by promoting medical and wellness tourism as a high value-added type of tourism that also promotes sustainable development.
Other public investment in tourism focuses on infrastructure development and information technology, i.e., Tourism Intelligence Center (https://tic.mots.go.th/app/landing). This policy supports the IOA by helping stakeholders plan and management tourism activities.
Financial Environment
Financial incentives: Medical and wellness tourism is among one of the 10 target industries to be developed through public and private investment (10).
Fiscal incentives: Board of Investment (BOI) Promotion provides Corporate Income Tax exemption, import duty exemption on machinery and raw materials, and other non-tax incentives for specialized medical centers, hospitals (under specific locations) and traditional Thai medical services (18).
Regulatory Environment
Department of Health Service Support (Ministry of Public Health) is the main authority governing the wellness businesses to align with the Health Establishment Act, B.E. 2559 (2016) and other related acts which set forth the standards for wellness service businesses in Thailand (9). These regulations are relevant to the IOA as they establishes the standards and other criteria that medical and wellness tourism must follow.
Hospitals and medical centers in Thailand have accreditation from the Joint Commission International (JCI), a globally recognized standard for healthcare. As of December 2018, there are 64 organizations in Thailand that are JCI-accredited, spanning across every region of the country (17). This standard supports the IOA as it often targets international tourists, which will increase confidence and demand for the medical and wellness tourism services provided.
Amazing Thailand Safety and Health Administration (SHA) audits and grants certification for COVID-19 and disease control measures within tourism facilities and services. SHA is a collaboration between Ministry of Tourism and Sports, Tourism Authority of Thailand, and Ministry of Public Health (22). This standard supports the IOA by increasing tourists' confidence on safety of facilities and services, especially during post-pandemic recovery.
Marketplace Participants
Private Sector
Chiva-Som International Health Resort, BDMS Wellness Clinics, Vachira Phuket Hospital, Physical Therapy Association of Thailand (PTAT) Lanee's Residenz Wellness School: Chiva Som Academy, Wat Po Thai Traditional Medical and Massage School
Government
Tourism Authority of Thailand, Department of Health Service Support, Ministry of Public Health, Thai Traditional Medical Council
Multilaterals
Asian Development Bank (ADB), International Financial Corporation (IFC)
Non-Profit
Thai Medical and Wellness Tourism Association, Thai Spa Association
Target Locations
References
- (1) https://www.nesdc.go.th/download/document/Yearend/2021/plan13.pdf
- (2) https://www.unicef.org/thailand/media/5071/file/SocialImpactAssessmentofCOVID-19inThailand.pdf
- (3) https://www.bot.or.th/Thai/MonetaryPolicy/EconomicConditions/AAA/250624_WhitepaperVISA.pdf
- (4) https://www.mol.go.th/wp-content/uploads/sites/2/2020/06/สถิติแรงงานประจำปี-2562.pdf
- (5) https://www.ilo.org/wcmsp5/groups/public/---asia/---ro-bangkok/documents/briefingnote/wcms_747944.pdf
- (6) https://www.oecd.org/economy/surveys/Economic-assessment-thailand-overview-2020.pdf
- (7) https://www.theglobaleconomy.com/rankings/international_tourism_revenue/
- (8) https://www.mckinsey.com/industries/travel-logistics-and-infrastructure/our-insights/reimagining-travel-thailand-tourism-after-the-covid-19-pandemic
- (9) https://www.jica.go.jp/project/thailand/025/materials/ku57pq00003u68o4-att/survey_202003.pdf
- (10) https://hss.moph.go.th/fileupload/2560-102.pdf
- (11) https://www.boi.go.th/en/grassroot
- (12) https://www.krungsri.com/en/research/industry/industry-outlook/Services/Private-Hospitals/IO/io-Private-Hospitals
- (13) https://data.worldbank.org/indicator/ST.INT.RCPT.CD?locations=TH
- (1) https://www.chivasom.com/hua-hin/about-history
- (2) https://www.kasikornbank.com/international-business/en/Thailand/Intelligence/Pages/201804_Thailand_Medical_Tourism.aspx
- (3) https://bps.moph.go.th/new_bps/sites/default/files/Report%20Health%20Resource%202020.pdf
- (4) http://web.nso.go.th/en/survey/gender/gender.html
- (5) http://library.fes.de/pdf-files/bueros/thailand/15747.pdf
- (6) https://data.worldbank.org/indicator/ST.INT.RCPT.CD?locations=TH,https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=TH
- (7) http://nscr.nesdb.go.th/wp-content/uploads/2019/04/05-การท่องเที่ยว.pdf
- (8) https://www.boi.go.th/upload/content/Thailand,%20Taking%20off%20to%20new%20heights%20@%20belgium_5ab4e8042850e.pdf
- (9) http://www.thaispa.go.th/spa2013/web/web_new/fileupload_doc/2017-11-15-3-17-2523508.pdf
- (10) https://waa.inter.nstda.or.th/stks/pub/2021/20210519-bcg-strategy-2564-2569.pdf
- (11) https://bansabairesorts.com/senior-care-resort-chiang-mai/?lang=th
- (12) https://blogs.lse.ac.uk/gender/2019/10/24/what-you-want-to-see-is-what-you-get-realities-representations-and-reputations-of-sex-tourism-in-bangkok/
- (13) https://www.bangkokpost.com/thailand/general/1922736/sex-workers-left-in-cold-by-outbreak
- (14) http://nscr.nesdb.go.th/wp-content/uploads/2021/01/17_NS_16.pdf
- (15) http://sdgs.nesdc.go.th/เกี่ยวกับ-sdgs/เป้าหมายที่-10-ลดความไม่เ/
- (16) https://hss.moph.go.th/fileupload/2560-102.pdf
- (17) https://www.boi.go.th/upload/content/BOI-brochure_medical_hub.pdf
- (18) https://www.boi.go.th/upload/content/BOI-A%20Guide_EN.pdf
- (19) https://www.rolandberger.com/publications/publication_pdf/roland_berger_the_second_national_tourism_development_plan_2017_2021.pdf
- (20) https://suansampran.com/th/
- (21) https://waa.inter.nstda.or.th/stks/pub/2021/20210519-bcg-strategy-2564-2569.pdf
- (22) https://web.thailandsha.com/about/details
- (23) http://nscr.nesdb.go.th/wp-content/uploads/2019/12/%E0%B8%AA%E0%B8%A3%E0%B8%B8%E0%B8%9B%E0%B9%80%E0%B8%9B%E0%B9%89%E0%B8%B2%E0%B8%AB%E0%B8%A1%E0%B8%B2%E0%B8%A2-Update-04-12-2562.pdf
- (24) https://data.worldbank.org/indicator/ST.INT.RCPT.CD?locations=TH