Are small industries a bad thing?

Ian Youngman has been studying the broader aspects of global tourism, and is fascinated to see the number and variety of existing and new market niches that exist. So, where does medical tourism rank as a tourism niche?

Many of you will have heard of religious tourism and eco-tourism; some of you will be familiar with sports tourism, food tourism, film tourism, or dark tourism. Each has risen from nowhere to earn the destinations that promote them a substantial income. On a global scale, many of these tourism niches are substantially larger than medical tourism.

I am ploughing through scores of tourism reports for a major research project. When medical tourism does get a mention, it is usually ion the context of health and spa tourism. In one 500 pages plus tome, medical tourism did get a mention in a footnote on page 490!

This does not mean that medical tourism is not an important and growing niche. But it does mean that when selling the concept to governments and travel authorities it is easy to overplay your hand.

How small a niche?

Let’s take an example. In a recent article that that Germany gets 70,000 medical travellers a year, making it one of the major destinations in Europe. The official number of international travellers to Germany in 2011 was 28.35 million – 2013 projections are over 30 million. So medical tourism is 0.23% of the total.

Let’s take another. The Turkish Department of Health reports 262,000 health tourists to Turkey in 2012 (not use of health, not medical) out of a total of 32 million tourists. So, health tourism is 0.8% of tourism activity.

So, medical tourism is clearly a very small niche in terms of the tourism sector. And thus of relatively little importance to many governments and tourism board.

The advantages of being niche

The tourism niches I mentioned in my introduction are valuable market niches because:

• Not all countries offer them.
• Only certain destinations within that country offer them.
• Only certain countries are targeted.
• Only certain people are targeted.
• The average age, class, spending value and characteristic of the niche customer are well understood by the travel trade.

By comparison, medical tourism lags behind in its understanding of the niche. With a fragmented market that has no dominant players either globally or even in any one country, medical tourism is a market with hundreds of hotels, hospitals, clinics and agencies all seeking to make money.

Within medical tourism, the areas that have performed consistently well in the last few years are the niches of dental, fertility and cosmetic; and regional niches such as Africans seeking major surgery in countries with better health facilities.

This is where many go wrong. They send the same marketing message to people who are well-off and seek high price luxury cosmetic care as they do to the bottom of the price range people needing heart surgery; as they do to the middle range people who want to save money but on a short dental trip.

The message here is that medical tourism a small niche within global tourism. AND, it is itself made up of many sub-niches which each have different target markets and offerings. It is a very complex market. Those seeking to sell “medical tourism ‘ as a concept are struggling against how modern tourism is sold.

What does the modern global tourism market say about how things are changing? A few sound bites:

• The old methods of national advertising campaigns and a presence at trade fairs are giving way to online and social media.
• Countries and destinations have to prepare for the short-term impact of natural disasters and political changes.
• There are rapid but long-term shifts in where travellers come from and go to.
• Targeting cut-price budget travellers risks breakneck competition and unprofitable investments that never pay off.
• Many countries keep targeting the “old markets” of America and Europe rather than the developing markets of Asia, Russia, China and Latin America.
• Demand and profiling segmentation within target countries is essential.
• Countries should identify key areas and core capabilities that differentiate it from competitors.
• A positive attitude from government is vital.
• Bringing down visa barriers to entry is essential.
• Online reviews offer travellers total transparency in price versus quality.

None of the above sound bites are my words; these are just a few random picks from travel experts. If you look at them, all apply equally to medical tourism, but do not reflect what many medical tourism countries actually do.

Those that ‘get’ the volatility and fast changing nature of medical tourism marketing… and apply the skills to growing it, will succeed. Those that do not will fall away. As brokers warn when selling investments – “Past performance is no guide to future prosperity.”