India’s medical travel agency boom

With the Indian government promoting medical tourism in a host of ways under its Heal in India scheme, scores of new medical tourism agencies are being launched. But how many will survive?

More start-ups are entering India’s medical travel sector, offering end-to-end solutions for visa, travel, accommodation, and doctor/hospital ratings in one single package. Others launching are the traditional one-person agency that acts for one hospital only.

The rise of these businesses is due to supportive government policies, quality medical facilities in the country, and the potential to make quick profits.

HealthTrip is a Delhi-based start-up specialising in medical tourism in India and with an office in Bangladesh. It acts as a concierge by picking up customers from the airport, finding them a hotel, as well as supporting hospital appointments and tests.

Other start-ups tie up with hospitals and doctors and list them on a central platform with details including fees and credentials.

Since medical travel not only includes travel but also a stay, visas, financial aid and, at times, translators, drivers, cooks and house helps; some start-ups have tied up with a wider range of service providers to offer customers an all-inclusive package.

In recent months there have been nearly 60 start-ups based in cities including not only Delhi, Mumbai, Bengaluru and Gurugram, but also in in smaller towns and cities such as Malappuram, Mangaluru and Palwal.

Some have found a niche by focusing on a particular treatment. Meditourz specialises only in regenerative and holistic treatments and has tied up with wellness centres that focus on Ayurveda and yoga. The Mumbai-based start-up is targeting markets across Asia, Southeast Asia and the Middle East.

For start-ups, quick growth is common but long-term growth may be harder. Revenue comes from commissions from either the hospitals or the doctors on every case they successfully close. High monthly revenues are achievable from the first year and given the low-cost structure associated with some of these businesses, profitability is not a difficult target.

But the more tech-heavy the agent is, the more money is needed for launch and also for marketing. The segment has attracted interest from institutional investors and angel investors.

Hospitals see these start-ups as a way to reach a larger target group, bringing value-added services which a hospital without an international patient department cannot, such as providing the patient with choice of treatment and helping them with paperwork, visa, travel, foreign exchange and accommodation.

But achieving ever increasing numbers and also being profitable is hard, and if investors are involved, they will look to make their money back, with extra. Few agencies have managed to sell at a profit.

In addition, some Indian hospitals are finding that dealing with agents is risky in terms of quality, efficiency and reliability.  Some are now considering taking back control with their own international patient units.

Time will tell how many new agencies survive, but historically few last more than a year and a five- or ten-year survival rate is minimal. Most investors in agencies have over the last decade lost their money.