Slow recovery for Thailand’s private hospitals in 2021

The Kasikorn Research Centre (KResearch) predicts that private hospital revenue will recover slowly, as medical tourism competition in Thailand intensifies.

KResearch predicts that private hospital revenue will recover slowly in 2021. This assumes that there is no further major COVID-19 outbreak and that global travel will resume soon.

The government’s planned gradual easing of travel restrictions should allow for more international travellers. KResearch projects that the revenue and profit of listed private hospitals will make a recovery in 2021, partially due to a low base from the previous year, with estimated revenue growing at 1-4% and net profit growing in the range of 15-20%.

But recovery is not expected to reach the pre-COVID-19 levels of 2019, as the pandemic continues to put pressure on the revenue and profit of private hospitals, especially those that are highly dependent on revenue from international patients.

Private hospitals that are reliant on revenue from Thai patients with social security and civil servant cover will likely be relatively less affected.

KResearch predicts that competition in the healthcare market will intensify, mainly due to the rising number of service providers as opposed to the number of potential patients, which has not risen proportionately to the available outlets. This is particularly true for medical tourists, whose numbers have yet to return to normal. As a result, private hospitals are compelled to adjust their business strategies to attract a bigger share of the domestic healthcare market, which has also declined under the pressure of dwindling purchasing power.

Retaining the existing customer base or finding new clients, especially those who hold private health insurance policies, may not be easy. Private hospitals might have to make adjustments to sustain their growth, through keeping medical costs affordable for patients and making preparations for medical tourists who will enter Thailand.