The global economic slowdown and Thailand's slow growth present challenges for all industries. The IMF estimates that global economic growth in 2024 is likely to be around 3.2%. Ongoing challenges stem from geopolitical risks that have driven oil prices up, leading to soaring global trade costs. Although inflation shows positive trends, policy interest rates remain high, compounded by China's issues with product distribution worldwide, making it increasingly difficult for SMEs in each country.

Nevertheless, there are always "opportunities." Finbiz by TTB presents economic data and opportunities for the healthcare industry, a "niche" trend that is currently gaining momentum and can grow well at this time.

The Thai economy is projected to recover in 2024, with expected growth of about 2.6%. However, domestic purchasing power is likely to slow down, particularly among vulnerable groups, due to chronic household debt and high interest rates. Delays in government budget disbursements make it difficult for regional economies to progress. On the positive side, the gradual recovery of the tourism sector offers hope, yet it must be acknowledged that Thailand's overall economy is growing slowly and below its potential. Nonetheless, consumers continue to prioritize health, and Thailand is entering an aging society, presenting a significant opportunity for the healthcare business.

Healthcare Business Thriving Amid Economic Trends

In 2024, the private medical service market is expected to generate revenue of 400 billion baht, with 72% of this revenue coming from private hospitals, primarily concentrated in Bangkok and its vicinity, which account for 75%. The eastern region follows with 8%.

Key target groups driving the Thai medical service market include foreign tourists, with an estimated 33 million expected to visit Thailand this year. Among them, Middle Eastern tourists have a high medical expenditure proportion. Another significant group consists of legal migrant workers, numbering about 6 million, 40% of whom have insurance.

There are three noteworthy business trends: specialized hospitals, specialized clinics, and medical laboratories, which are experiencing continuous growth. This trend is likely to make it increasingly difficult for general private clinics and hospitals.

Focusing on the demographic structure of Thais aged 40 and over, there are currently 32 million people in this age group, projected to increase to 37 million by 2031. This growth will promote the physical therapy business due to the rise in chronic diseases requiring ongoing treatment, such as office syndrome.

Healthcare is thus becoming a "niche" trend with strong growth potential. Specialized medical businesses will capture a larger market share, growing at over 15% annually compared to the last 3-4 years. Furthermore, when comparing revenues between private hospitals focusing on foreign clients and those targeting Thai patients, the revenue gap is widening significantly, presenting opportunities for businesses catering to foreign clientele.

Medical Tourism: A Sustainable Business Model for the Future

Although the hospitality sector is a strength for Thailand, the limitations in expanding the domestic market make the "H2H Model" (Hospitality to Healthcare) an appealing business model. This model should increasingly target foreign customers and link the healthcare industry with tourism under the banner of medical tourism, which operators can adopt as follows:

• Focus on the quality of tourists rather than quantity, emphasizing retiring foreigners and digital nomads (those who work remotely). Estimated spending per head is between 80,000-120,000 baht per trip.

• Design a customer journey and comprehensively plan the medical tourism supply chain. This includes sharing our information with tour companies, apps, or medical agents to facilitate travel and patient transfers between countries. While patients receive treatment at specialized hospitals or clinics, accommodations and travel programs should be arranged for accompanying relatives.

Thus, looking ahead, future business models will likely adopt a subscription system to create recurring revenue streams, generating consistent customers for businesses by fostering new demands to increase service frequency, such as telemedicine.

Additionally, elderly care centers represent another avenue for creating long-term recurring revenue for businesses. With Thailand's healthcare system ranked among the top five globally and competitive medical costs, along with world-class hospital standards and excellent medical personnel, Thailand is well-positioned to become a medical hub.


Source: "LEAN for Sustainable Growth by TTB" Course, 19th Edition for the Healthcare Industry
Source: Sanook Travel