BALI REBIRTH The next top center for Medical Tourism

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BALI REBIRTH
Illustration: LEONARDO A. PUTONG

IO – The passage of the Agrarian Law in 1960 and the Foreign Investment Law in 1967, both of which attracted a large flood of foreign and domestic investment in many sectors, including tourism, cannot be isolated from the expansion of the post-independence domestic tourism industry. The vast amount of new capital made available to tourism stakeholders at the time, particularly for investment in Bali, fueled massive expansion, putting Bali on the map of global tourist attractions and attracting millions of domestic and international visitors. President Soekarno even authorized the construction of a prominent hotel on Sanur Beach, which opened in 1966. Tourist arrivals quickly increased, rising from 51,000 in 1968 to 270,000 in 1973. In the 1970s, surfers spread the word that there were many ideal surfing spots all around the island, boosting Bali’s tourism sector even more. During this time, they served as unofficial “ambassadors” for Bali, marketing the island to an international surfing community. Bali is known for its rich and unique culture, which includes white sand beaches, a tropical island vibe, majestic mountains, rolling hills, terraced rice fields, gorgeous river, and a breathtaking underwater scenery. No wonder it quickly became a famed tourist destination around the world, often covered by international media. Bali now is awash with hotels, villas, resorts, bungalows and homestays, as well as restaurants and eateries, all of which have been built to cater the holidaymakers.

To further increase the island’s tourism, the local government has issued regional government regulation (Perda) 10/2015 on the masterplan for tourism development of Bali Province, 2015-2029. According to data from the Bali Bureau of Statistics (BPS), the number of tourists visiting Bali has continued to rise year after year, topping 6 million in 2018.

Unfortunately, the Covid-19 pandemic brought Bali’s tourism to a halt, with visitor numbers plummeting as a result of border closures and other travel restrictions imposed by many countries, including the Indonesian government, in an attempt to halt the spread of the potentially fatal novel coronavirus.

On March 2, 2020, the virus made landfall in Indonesia. An Indonesian resident in Depok, West Java, became sick after having close contact with a Japanese citizen who had contracted the virus two weeks previously in Malaysia. The number of Covid-19 cases rapidly increased, from 533 on May 9, 2020, to 1,043 on July 9, 2020.

The tourism business in Indonesia has been ravaged by the outbreak. When compared to a year earlier, the number of international tourists dropped by nearly 75% to a meager 4.052 million in 2020. This had an immediate impact on the hotel industry. The room occupancy rate was still around 49.17 percent in January and February of that year. When the virus was initially discovered in Indonesia in March, it had dropped to 32.24 percent and had continued to fall to 12.67 percent. The introduction of large-scale social restrictions (PSBB) and border closures that followed resulted in a significant drop in state revenue from the tourism sector. Around 12.91 million workers in the sector have started working fewer hours, and nearly a million have been laid off. According to BPS statistics, the pandemic will have displaced 409,000 tourism employees in 2020 alone. (FIGURE-1)

FIGURE-1

Several efforts have been initiated to save Indonesia’s devastated tourism industry. The Ministry of Tourism and Creative Economy devised a three-stage plan: emergency response, recovery, and normalcy. To survive the pandemic, the tourism industry will need to adapt, innovate, and collaborate – even more so given changing customer behavior and the business itself.

Spying this opportunity, a number of hospitals in Bali have begun to seriously attempt to attract the medical tourism market, by establishing the Bali Medical Tourism Association (BMTA), consisting of 17 international hospitals and clinics. “Medical tourism” or “health tourism” presents vast opportunities, as it is quickly becoming a lifestyle, entailing a journey abroad to obtain health care, including general check-ups, treatment and rehabilitation. In the healthcare industry, patients are more inclined to seek safe, comfortable and quality services. The pursuit of cross-border healthcare services has become a steadily-rising trend. Patients from developing countries traditionally go to developed countries to seek higher quality, more advanced treatment. On the other hand, patients from developed countries travel to developing countries to seek more economical and prompter healthcare.

The government has been no less enthusiastic. On December 27, 2021, President Joko Widodo attended the groundbreaking ceremony of the Bali International Hospital, located in Sanur, Denpasar, a popular beach and resort south of Bali. Of the 41 hectares of land earmarked for development, 21.2 hectares will be dedicated for a medical tourism center that will consist of an international hospital, ecopark, commercial area, art market, hotel and hotel school. It is expected that once this is completed, it will be able to capture a market of around more than 2 million Indonesians who annually seek treatment abroad and of course, foreign patients from developed countries, as Bali International Hospital has concluded a collaborative agreement with Mayo Clinic, one of America’s top hospitals.

According to Medical Departures, there have been large investments in recent years in the quest to turn Bali into a “medical tourism hub”. For example, Bali Mandara Hospital, Sanur, received Rp190 billion from the regional budget to build a healthcare facility equipped with advanced medical technology and world-class service. It is also fully backed by expertise from the Royal Darwin Hospital, Australia. It is expected that many foreign nationals will come to Bali to seek health service, while enjoying the natural beauty and fascinating cultural traditions of “the Island of the Gods”.

Indonesia is, Indeed, a latecomer in this field. Neighboring countries have become popular destinations and made massive profits from this industry. For instance, around 2.5 million traveled to hospitals in Thailand in 2013. One prominent hospital alone, the Bumrungrad International Hospital in Bangkok, received more than 520,000 foreign patients.

With 850,000 medical tourists arriving in 2012, Singapore has long been a highly established medical tourism center in Southeast Asia. However, according to a report published in January 2019 by RHB Research, due to significant variations in healthcare costs in surrounding countries such as Malaysia and Thailand, those countries have attracted medical tourists from the area, reducing Singapore’s market share. The number of medical tourists in Malaysia has doubled in the past five years. Malaysia has become a well-known destination, with 770,134 medical tourists as early as 2013. In 2016, the Malaysia Healthcare Travel Council (MHTC) was awarded the titles of “Health & Medical Tourism Destination of the Year”, “International Hospital of the Year”, “International Cosmetic Surgery Clinic of the Year”, “International Dental Clinic of the Year”, “International Fertility Clinic of the Year”, and “Best Marketing Initiative of the Year” by the International Medical Travel Journal.

Further afield, there is India, which has quickly become a medical tourism spot, with 166,000 international patients in 2012. India is known to have highly-skilled doctors and an upgraded medical infrastructure. In 2016 the number continued to rise, with more than 170,000 medical visas granted. This represents only a small fraction of the total medical tourist numbers entering the country.

In another part of the world, Latin American countries such as Costa Rica and Panama are also rapidly becoming a destination for medical tourism. Around 40,000 foreign patients sought health care in Costa Rica in 2011. Thanks to its proximity to the US, Mexico has become one of the top medical tourism destinations, with some 40,000 to 80,000 senior citizens in the US spending their sunset years in Mexico’s nursing homes and health care facilities.

Meanwhile, in Europe, Spain is a powerhouse. Marbella, a city in southern Spain, alone generated more than €330 million per year in medical tourism revenue. Quirón is Spain’s largest medical provider, treating up to 20,000 foreign patients per year, the majority of whom come from the UK, the Netherlands and Finland.

It is hoped that the Indonesian medical tourism industry will follow in the footsteps of other countries to become Asia’s premier medical tourism hub in the near future, by offering more cost-competitive healthcare services.

The Medical Tourism Index (MTI), a global non-profit association for medical tourism and international patients, has ranked 46 medical tourism destinations worldwide, based on 41 criteria across 3 key areas, namely, destination attractiveness, safety and quality of treatment. (FIGURE-2)