Economic Update

Published 02 Sep 2020

The outbreak of Covid-19 all but halted global medical tourism, as institutions cut non-essential services and patients stayed at home due to travel restrictions and social-distancing guidelines. However, with flight bans being lifted and many countries tentatively re-opening, there are early examples of how the medical tourism segment might position itself for a rebound.

Extensive testing of both foreigners and nationals will be central to rebuilding patients’ confidence in medical tourism destinations, as will robust hygiene regimes at hospitals. This includes frequent cleaning and disinfection, and increased ventilation and air filtration.

New technology also has a decisive role to play for institutions looking to capture market share: for example, doors that open and close via smartphone app can reduce the physical contact involved in patient visits, while advanced medical technology such as robot-assisted surgery can mitigate the risk of transmission.

In a similar vein, the pandemic may accelerate the ongoing trend of medical complexes operating high-end accommodation. This allows them to capture greater revenue from visiting patients – and, perhaps more saliently in the context of the pandemic, enables patients to remain in a controlled medical environment to sleep, eat and relax.

A test case: Dubai

Dubai, which reopened its borders to international tourists on July 7, offers an early case study for reviving medical tourism.

At the start of August Christian Schumacher, the chief executive of King’s College Hospital in Dubai, told local media that the number of inquiries the hospital was receiving from medical tourists had recovered to roughly 60% of the levels seen in January. In particular, he noted an uptick in visitors from countries with less developed health care systems, such as Nigeria, as well as from other GCC nations.

An important underlying enabler of this resurgent demand is the broader UAE’s commitment to testing.

According to the Dubai Health Authority (DHA), more than 4m PCR tests have been carried out across the UAE since the start of the pandemic – some 950,000 in Dubai alone – placing the UAE fifth globally in terms of testing per capita as of early August.

Dubai’s long-standing focus on developing the medical tourism sector also put it on a solid footing for recovery.

Prior to the pandemic, the Dubai Health Tourism Council was on track to achieve its goal of 500,000 medical visitors per year by 2021: some 337,000 visited in 2018, the most recent year for which data is available. Of these, 33% came from Arab and GCC countries, primarily Kuwait, Saudi Arabia and Oman. Asia accounted for a further 30% and Europe for 16%, mostly from the UK, France and Italy.

While Covid-19 unquestionably dampened visitor flows in the first half of 2020, a combination of digitalisation and government support mechanisms signals brighter prospects for the second half of the year and beyond.

For example, the DHA’s Dubai Health Experience is the region’s first medical tourism portal, enabling tourists to book their entire visit online; Jordan recently launched its own comparable registration platform.

Meanwhile, Dubai Healthcare City, purported to be the world’s largest free economic zone for health care, received a financial relief package in May, comprising both benefits and regulatory fee waivers. Operations resumed there on July 21.

Post-pandemic prospects in MENA

The 2020-21 Medical Tourism Index – which ranks countries according to their attractiveness as health care destinations – was released in July, and considered the effects of Covid-19.

Reflecting Dubai’s recent efforts, the emirate placed sixth overall, and the highest in the MENA region. Some of its neighbours were not far behind, with Israel coming eighth, Abu Dhabi ninth and Oman 13th.

Egypt, which has in recent years been exploring the best ways to reinvigorate its own medical tourism sector, ranked 26th.

“We expect intra-MENA demand to pick up in the fourth quarter, but the recovery from clients outside the region will begin in earnest from next year onwards,” Shady Ali Hussein, chairman of Cairo-based Shiny White Dental Centers, told OBG.

A report by commercial real estate services firm Colliers International, published in late July, identified medical and health tourism as key to rebooting the broader tourism industry in certain MENA countries.

The report recommends that tour and hotel operators in major cities affiliate with local hospitals in order to provide a complete package to tourists. It also argues that the sector needs to expand beyond “traditional” medical tourism and into health and wellness, as well as emerging services related to lifestyle disease and rejuvenation.

If such specialties can be successfully integrated – together with a robust health and safety regime – rumours of the sector’s demise could prove to be greatly exaggerated, and MENA could ultimately emerge from the pandemic in a more competitive position.