With the Indian government promoting medical tourism in various ways under its Heal in India program, many new medical tourism agencies are being launched. But how many will survive?
More and more start-ups are entering the medical travel industry in India, offering end-to-end solutions for visa, travel, accommodation and doctor/hospital assessments in a single package. Other launches are the traditional single-person agency that acts for a single hospital.
The rise of these businesses is due to favorable government policies, quality medical facilities in the country, and the opportunity to earn quick profits.
HealthTravel is a Delhi-based start-up specializing in medical tourism in India with an office in Bangladesh. He acts as a concierge by picking up clients at the airport, finding them a hotel, as well as taking care of hospital appointments and tests.
Other startups partner with hospitals and doctors and list them on a central platform with details like fees and credentials.
Since medical travel does not just include travel, but also accommodation, visas, financial assistance, and sometimes translators, drivers, cooks, and housekeepers; some start-ups have partnered with a wider range of service providers to offer customers an all-inclusive package.
In recent months, nearly 60 start-ups have been based in cities such as Delhi, Mumbai, Bengaluru and Gurugram, but also in smaller towns such as Malappuram, Mangaluru and Palwal.
Some have found a niche by focusing on a particular treatment. Meditourz specializes only in regenerative and holistic treatments and has partnered with Ayurveda and yoga focused wellness centers. The Mumbai-based start-up is targeting markets in Asia, Southeast Asia and the Middle East.
For start-ups, rapid growth is common, but long-term growth can be more difficult. Revenue comes from commissions from hospitals or doctors on each case they successfully close. High monthly incomes are achievable in the first year and given the low cost structure associated with some of these businesses, profitability is not a difficult goal.
But the more technically heavy the agent, the more money is needed for the launch and also for marketing. The segment attracted interest from institutional investors and angel investors.
Hospitals see these start-ups as a way to reach a wider target group, providing value-added services that a hospital without an international patient service cannot, such as offering the patient a choice of treatment and the help with paperwork, visas, travel, currency exchange and accommodation.
But it’s hard to reach ever-increasing numbers and be profitable, and if investors get involved, they’ll be looking to get their money back, with a premium. Few agencies have managed to sell at a profit.
Moreover, some Indian hospitals find dealing with agents 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 longer than a year and a five- or ten-year survival rate is minimal. Most agency investors have lost their money over the past decade.