SLUMP AT INDUSTRY LEADER BUMRUNGRAD HOSPITAL
Bangkok’s Bumrungrad Hospital, known as the grand-daddy of all internationalhospitals, has slumped 17% since early March after patient volumes from the United Arab Emirates (UAE), its second-biggest source of overseas visitors, fell 20% in the first quarter of the year.
More than one in three foreigners treated at Bumrungrad are from the Gulf states and Kasikorn Securities says declining growth in the region and a rise in competition fromclinics in the UAE, where the government is encouraging its citizens to stay home formedical care, are curbing demand.
Kasikorn Securities downgraded its earning forecasts for Bumrungrad by 8% to 13% in 2016 to 2018 to reflect the weak economic outlook in the Gulf and rising competitionfrom Abu Dhabi’s Al Noor Hospitals Group, according to a May 19 note by analystJitima Ratanatam in Bangkok. The UAE’s economy has been hit by the plunge in oil since mid-2014 and is forecast to expand 2.5% this year, from more than 7% in 2012.
Other Thai hospitals are also under pressure. Chiang Mai Ram Medical Business reported a 41% slump in first- quarter profit. Bangkok Dusit Medical Services, the largest company in the Thai medical tourism sector, was downgraded to neutral from outperform by Credit Suisse Group AG last week.
10-YEAR PLAN TO PROMOTE MEDICAL TOURISM
Recognising the importance of health care to the Thai economy, Prime Minister Prayut Chan-o-cha’s military government has drafted a 10-year plan to promote the sector.
As part of the plan, the staying period for medical treatment for patients from China, Laos, Cambodia, Myanmar and Vietnam has been tripled to 90 days.
Even if Middle East demand keeps declining, growth in patients from Southeast Asian countries with less-advanced medical technology such as Myanmar will support theindustry say some experts.