Hospitals get post-Covid growth injection from foreign medical tourism

Robust growth in H1FY24 signals rebound in medical tourism, fuels bigger expectations

Major Indian hospital chains reported a huge increase in international patient revenue in the first half of the current financial year (H1FY2024). The steady year-on-year (Y-o-Y) increase in foreign tourist arrivals and medical visas has helped revive the medical tourism industry that was faltering in the wake of the Covid-19 pandemic.
 

The rise in revenue through medical tourism has also raised expectations for similar growth in H2FY24.
 

Speaking on the reasons for the growth, Anas Abdul Wajid, senior director and chief sales and marketing officer, Max Healthcare, said the availability of top-notch healthcare infrastructure, a pool of well-trained medical experts, and cost-effective treatment alternatives make India an appealing destination for those seeking high-quality healthcare services.
 

“India has become a popular choice for medical value travel in recent times and the country's potential in this sector is expected to grow further,” he added.
 

High growth in H1FY24 fuels bigger expectations from H2
 

Max Healthcare saw a Y-o-Y growth of 25 per cent in its international patient revenue, whose share in the overall hospital revenue stood at 9 per cent during H1FY24.
 

“Overall share of international business in our topline (overall income) is 9.5 per cent. However, for flagship hospitals that are Max, Saket and BLK-Max, this hovers at 20 per cent of their toplines,” Wajid said.
 

“We expect the business to grow at 25 per cent Y-o-Y in the next 3 to 6 months, in line with the growth we have seen in H1 of the current financial year,” he said.

A similar growth was witnessed by Fortis Healthcare, whose international patient revenues stood at Rs 126.7 Crs, a YoY growth of 15.6 per cent. 

Speaking on the contribution of foreign patient revenue, Anil Vinayak, group chief operating officer (GCOO), Fortis Healthcare said that International patient revenue contribution increased to 8.3 per cent of hospital revenues versus 8.0 per cent in the same quarter last financial year.

Refusing to disclose the split and further revenue details, Harinder Singh Sidhu, senior vice president and head, international business, Apollo Hospitals said that Apollo is one of the most preferred destinations for treatment and care and continues to be trusted by many patients from outside India.
 

In its earnings call for Q2FY24, Apollo had reported a 20 per cent growth in international patient revenue.
 

“Apollo has been in constant lookout to increase the reach to newer geographies for business development. We expect to see a growth of 18 to 20 per cent in H2FY24, compared to last financial year,” Sidhu said.
 

The top specialties at these hospitals that attract the most medical tourists are organ transplants (liver, bone marrow, and kidney), cardiac surgeries (including pediatric cardiac surgeries), oncology and orthopedics and neurosciences.
 

A rebound in medical tourism?
 

Government figures suggest that the medical tourism industry is showing signs of revival after the Covid-19 pandemic. The latest data from the Ministry of Tourism reports that the number of Foreign Tourists Arriving (FTA) for medical reasons has increased substantially from Calendar Year (CY) 2017 to CY2021.
 

The FTA number was reported to be 495,000 in CY2017. It increased significantly to 644,000 in CY2018 and then to 697,000 in CY2019. However, the industry witnessed a downfall on account of the Covid-19 pandemic, with FTA figures crashing to 182,945 in CY2020.
 

Figures from the tourism ministry show that patients from Bangladesh, Iraq, The Maldives, Afghanistan and Oman are the top 5 contributors of medical tourists in India. According to data reviewed by Business Standard, medical visas to citizens from these five countries witnessed a 73 per cent drop from 563,913 in CY2019 to 147,370 in CY2020.
 

The number of FTA for medical purposes rebounded in CY2021, with 304,578 medical visas being distributed, a Y-o-Y increase of 65 per cent, on account of a reduction in international travel restrictions.
 

According to monthly tourism reports available with the Ministry of Tourism, the figure of medical tourist arrivals in H1FY24 (March to September 2023) stands at 453,475. The government of India has started to extend e-medical visa facility to the nationals of 156 countries to promote medical tourism in the country.
 

Further expansion of international services
 

Hospitals are lining up to increase the number of international offices to serve as their ‘embassies’ in foreign countries. Max Healthcare currently has 9 operational international offices in different parts of Asia and Africa.
 

“We are planning to add 2 more offices in the current financial year,” Wajid said.
 

Explaining the need for expansion, Wajid said that Max receives patients from over 100 nations every month. Patients mostly come from the Middle East, Central Asia, SAARC countries and Africa.
 

Apollo Hospitals runs over 20 outreach offices in multiple countries under the name Apollo Hubs.
 

Sidhu pointed out that Apollo is looking to add five more outreach hubs in Congo, Kazakhstan, Mauritius, Liberia and Iraq by the end of the current financial year.

Speaking on Fortis’s expansion plans, Anil Vinayak said that Bangladesh has emerged as a strategic focus for Fortis’s future growth, with plans to expand existing facilities in Kolkata to cater to the growing number of patients from Bangladesh.

“Fortis is also exploring opportunities to establish a direct presence in Dhaka and Chittagong, with a gradual expansion strategy planned for other cities in Bangladesh,” he added.