Medical tourism drop hits core of Thailand's Bumrungrad Hospital

[BANGKOK] Bumrungrad Hospital Pcl said the plunge in medical tourists traveling to Thailand amid the coronavirus pandemic has squeezed its business, as the majority of the health-care operator's revenue typically comes from international patients.

"The Covid-19 crisis is a very tough test for all businesses," Chief Executive Officer Artirat Charukitpipat said in a written interview on Monday. "More than 50 per cent of our patients used to come from overseas. They've now disappeared. The most important question is how we will get over this crisis. At Bumrungrad, agility runs in our blood. We have great staff, and they are ready to adjust."

The hospital helped pioneer Thailand's medical-tourism industry about three decades ago. With it's core patient base closed off, Bumrungrad has stepped up telemedicine as well as conducting at-home blood tests, vaccinations and drug deliveries, according to Ms Artirat. The hospital operator, whose flagship is in Bangkok, also implemented new residence programs for those requiring quarantine or physical distancing, she said.

Thailand's borders are mostly closed as part of a state-of-emergency order imposed in March that lasts through May. Foreign tourist arrivals plunged 76 per cent in March, with arrivals for the full year seen dropping by 42 per cent, to 15 million, according to government figures.

In 2019, Bumrungrad treated "632,000 international medical episodes from over 180 countries," with patients from Myanmar, United Arab Emirates and Kuwait accounting for the biggest share by revenue, according to the hospital's website. Two-thirds of revenue came from non-Thai patients.

Bumrungrad "is the most sensitive" of Thailand's hospital operators under current circumstances because it has the highest proportion of foreign patients, said Suwat Wattanapornprom, an analyst at Asia Plus Securities Co. in Bangkok. "We recommend our clients switch to other stocks which focus on local markets."

Among 26 brokerage ratings on Bumrungrad's shares, three recommend buy, 16 hold and seven sell. Asia Plus is in the latter category, and forecasts a 28 per cent revenue drop in 2020 from last year, assuming the pandemic will ease in the second half of this year, Suwat said in a phone interview.

Bumrungrad is currently the target of a pending takeover offer of about 85 billion baht (S$3.67 billion) by Bangkok Dusit Medical Services Pcl, the largest hospital operator in Thailand, according to data compiled by Bloomberg. Bumrungrad said in a filing to the stock exchange on Feb. 27 that it was "surprised" by the bid.

BLOOMBERG