Ruben Toral, principal with Intermedika Consulting and a specialist in branding, business strategy and medical tourism for hospitals, health resorts, governments and investors worldwide, says Thailand has all she needs to be the Retirement Capital of Asia but a smart strategy is needed.
Thailand is in trouble. The economy is shrinking, unemployment is rising and tourism is crumbling. According to data released by Thailand’s Ministry of Tourism and Sports, foreign visitor arrivals are down 83 per cent from 2019. Any hope of a quick rebound evaporated in late 2020 with a fresh outbreak of Covid cases, triggering a new round of lockdowns and more business shutdowns.
Once bursting at the seams with tourists, resort destinations like Phuket, Pattaya, Krabi and Samui are now ghost towns. Thai authorities talk incessantly about revitalising tourism and pivoting the industry to attract ‘high value tourists’, but the reality is Thai tourism has always been a churn and burn, volume-based game. Size over sustainability.
To stem the bleeding, the government devised a Special Tourist Visa (STV) scheme designed to lure tourists back to the country. The catch, of course, is a mandatory 14-day quarantine. Having gone through this experience myself, I describe it like going through a Rube Goldberg contraption – you are tossed and turned through bureaucratic twists and turns only to end up hermetically sealed in a hotel room paying business class prices for an economy class product.
To be fair, Covid-19 presents a massive challenge for governments around the world and puts authorities in a no-win situation. Open the borders and risk widespread infection or keep them closed and suffer economic strangulation. Thailand has done a great job battling the spread of the virus, but it is losing the war in lost jobs and wages. The longer this Mexican standoff between live and livelihoods continues, the harder it will be to resuscitate the economy back to health.
One area where Thailand can focus attention is retirement living. No country in Asia is better positioned to attract seniors looking for a first or second home. The 50+ market represents a multi-billion dollar opportunity impacting virtually every sector of the economy, and demographics ensure that it will be a growth market for many years to come.
According to a 2018 K-Bank report on aging, Thailand is already home to around 70,000 middle to high income seniors from high wealth source markets like the US, Germany, Switzerland and Japan. These long stay seniors bank, invest, buy property, travel, (play) golf and use medical services – all high value activities that boost foreign direct investment and support key industries.
Thailand has everything it needs to become The Retirement Capital of Asia; yet it is woefully incapable of developing a product that is coherent, customer friendly and market competitive. Arcane immigration policies, restrictive property ownership rules and convoluted banking regulations are just some of the many disincentives that make long-stay living in Thailand onerous and investing in the country a gamble. As a permanent resident in Thailand, I know all too well the frustrations that expats face getting visas and mortgages.
Covid-19 presents the country’s leaders with a once-in-a-decade opportunity to rethink its strategy on retirees and retirement living, like it did with medical tourism after the Asian financial crisis in 1997. As the marketing director for Bumrungrad International Hospital from 2001-2007, I saw Thailand transform itself from a local player to a global healthcare heavyweight in the span of five years.
Medical tourism is a perfect example of how Thailand can create opportunity out of crisis. Thailand’s private hospitals and health resorts gained market share and pole positioning by being at the right place at the right time with the right product at the right price. Thailand wasn’t the first mover in medical tourism; it was the fast mover. Speed to market made all the difference, and now this segment attracts over three million international high value tourists annually and contributes 45 billion Thai baht (US$1.5 billion) to the economy.
The moral of this story is simple. Hope is not a strategy and waiting for the return of mass market tourism is folly. Thailand has a clear competitive advantage in retirement living and should use this downtime to develop smart strategies to gain fast mover advantage in high value, niche segments that are less fragile and more sustainable.
As the saying goes, “Never let a crisis go to waste”.