Medical tourism injects more growth

MEDICAL tourism continues to thrive in Malaysia notwithstanding recent reports that rising healthcare costs continue to be of concern albeit limited to the local populace.

The continued strength of the healthcare sector is seen to give local private hospitals a good base to build upon as they head into the new year – especially with 2026 being Visit Malaysia Year.

Some RM20mil is being allocated by the government next year to enhance health tourism programmes by the Malaysia Healthcare Travel Council (MHTC).

The MHTC is a government agency that helps bridge medical tourists to various private hospitals in the country, and this is useful in an age that’s fraught with deceptive scams and trickery.

The additional allocation for the MHTC will likely be spent on promotional campaigns since this would potentially lead to stronger gains for medical tourism.

Based on forecasts, the ringgit will also likely continue its rise against the US dollar but this has not hindered healthcare tourism since the local currency is still considered undervalued, well below its historical averages.

Data by the MHTC reveals most medical tourists are from the Asia Pacific, constituting close to 90% of medical tourism revenue in 2024.

The healthcare tourism sector continues to achieve new highs – going way above pre-pandemic figures, growing by 21% year-on-year (y-o-y) in revenue for the country or almost RM500mil to a historical high of RM2.72bil in 2024.

This growth was facilitated by strong healthcare demand supported by the increase in local supply that was able to cater to this extra need, the MHTC says in a statement on the sector’s 2024 performance overview.

Healthcare travellers correspondingly rose by 14% to 1.59 million last year, the data shows.

For 2025, the Health Ministry says it is targeting some RM3bil in revenue from the medical tourism sector this year, with the arrival of 2.5 million health tourists.

If these forecasts are accurate, medical tourism this year is anticipated to see a y-o-y revenue growth of 10.3% from 2024.

Based on historical trends, about half of medical tourists are from Indonesia, with better healthcare infrastructure in Malaysia the lure.

This segment continues to thrive, with the case in point being IHH Healthcare Bhd’s Island Hospital, which has seen good gains from medical tourism in the year-to-date period, as most foreign patients are known to be from the archipelago.

The larger number of tourists expected next year could further fuel growth of private hospitals, which are strategically located – especially in the major cities and larger towns.

Malaysia’s medical tourism’s revenue intensity in 2024 was the highest at the central region at 41.7% and the northern region at 40.1%, the data shows.

Further gains are expected for the two main public listed domestic private hospital players on this front – IHH Healthcare and KPJ Healthcare Bhd; including the Columbia Asia Hospital group, which is privately held, and Sunway Bhd.

KPJ, the biggest domestic private hospital group by the number of beds, which also sources for growth from medical tourists, saw slight gains of 9.2% y-o-y in net profit in its latest third quarter ended Sept 30, 2025 (3Q25) to RM616mil as the quarter’s revenue grew by a larger quantum by 16.5% y-o-y to RM6.57bil.

KPJ Healthcare appears to have seen margins impacted, attributed this to the payor pressure that has impacted its profitability for the quarter.

Meanwhile, the Malaysia segment had led gains for IHH Healthcare in its 3Q25 and it appears that centralising procurement processes for the global hospital group is now bearing fruit.

IHH Healthcare’s Malaysia segment led growth for the group in its latest quarter with y-o-y earnings before interest, taxes, depreciation and amortisation rising by 22% to RM353mil while the country segment’s quarterly revenue rose 8% y-o-y to RM1.26bil.

IHH Healthcare chief executive officer Dr Prem Kumar earlier said Malaysia grew strongly as it pivots towards a daycare focus and as medical tourism share rises despite payor pressures and cost inflation.

Higher contribution was noted by Prem on gains from Island Hospital in Penang.

Interestingly, there may be less demand for brick and mortar type of inpatient hospitals moving forward as trends shift since IHH Healthcare anticipates more demand from daycare services instead.

“While the demand for quality healthcare remains resilient, the group recognises that the healthcare landscape is continually evolving.

“Advances in medical technology and improved clinical outcomes are driving greater demand for ambulatory services and day surgeries, reducing the need for inpatient admissions and shortening inpatient length of stay,” the hospital group says in a note accompanying its recent 3Q financial results.