The quiet but growing economic ripple of medical tourism

2026-03-17 - 00:33

The Malaysia Healthcare Travel Council aims to quadruple medical tourism revenue to RM7 billion by 2030. (Bernama pic) PETALING JAYA: When a foreign patient checks into a Malaysian hospital, the economic impact does not end at the ward door. It spills into hotel lobbies, café counters, Grab fares and shopping receipts. In a post-pandemic economy still regaining momentum, medical tourism has quietly emerged as a stabilising force — extending its impact to a host of Malaysian businesses well beyond healthcare. In 2023, Malaysia’s healthcare travel industry generated around RM2.25 billion in hospital revenue. That grew to RM2.72 billion the following year, and surpassed the RM3 billion last year. Yet those figures do not reflect medical tourism’s true economic footprint. With a multiplier effect estimated at four times that sum, medical tourism has pumped between RM10 billion to RM12 billion annually into the national economy over the last three years. And that is where the real story lies. A different kind of visitor These are not your typical holidaymakers, says Mint Leong of the Malaysia Inbound Tourism Association (MITA). “Medical tourists typically spend more and stay longer than regular leisure tourists. They rarely travel alone, often coming with family members, and combine treatment with sightseeing, shopping, food and wellness activities,” she told FMT. Tourism data reinforces this trend. Shopping dominates visitor spending, followed by accommodation and food & beverage, with medical expenses anchoring their overall expenditure. The multiplier effect A hospital visit by a medical tourist often triggers spending across multiple sectors, even benefiting businesses that have little to do with healthcare. Official figures largely capture direct medical bills, but patients and their families also inevitably spend on accommodation, transport, meals, shopping and other services — and repeat their expenditure during subsequent visits for follow-up care. In 2024, Malaysia’s central region brought in some RM1.14 billion in medical receipts, representing roughly 42% of the national takings. However, medical tourism has not been concentrated in the central region alone, with the northern region — at 40% — emerging as a major destination. Elsewhere, the southern region contributed 12%, with the East Coast states, Sabah and Sarawak pulling in the remainder. That fourfold effect and geographic spread matter. They allow medical tourism to support employment in multiple sectors, especially in retail, food services, transport and hospitality, channelling income into regional economies. As Leong notes, medical tourism has evolved from a “niche segment” into “a key pillar alongside leisure tourism,” supporting an entire ecosystem beyond hospitals. Macroeconomic perspective Medical tourism cushioned Malaysia’s tourism recovery after Covid-19. Following the April 2022 border reopening, pent-up demand for delayed treatments spurred a surge in healthcare travel, driving revenue past expectations in 2022 and fuelling a sharp rebound by 2023. “Medical tourism recovered largely in parallel with leisure tourism after the pandemic,” said Leong. “As overall tourist arrivals surpassed pre-2019 levels, medical tourism accounted for a meaningful share of that recovery.” From a macroeconomic perspective, this matters because medical tourists are typically higher-spending and less seasonal than mass-market visitors. They help smooth tourism receipts, reduce volatility and contribute to a more resilient services surplus. Fiscal effects, talent retention Critics often argue that medical tourism benefits only private hospitals. However, foreign patients account for a relatively small share of inpatient discharges in private hospitals, suggesting that healthcare travel complements rather than crowds out domestic demand. There are also fiscal effects. Taxes generated across hospitals, hotels and service businesses flow back into the national budget, indirectly supporting public services, including public healthcare. Dr Thirunavukarasu Rajoo, president of the Malaysian Medical Association, acknowledged that medical tourism has played its role in keeping top talents in the country. “Medical tourism can help retain specialists in Malaysia by offering professional opportunities and competitive income,” he told FMT. However, he warned that the industry must be managed carefully to avoid widening disparities between public and private healthcare. “Without proper safeguards, there is a risk that growth in the private sector could draw specialists away from public hospitals, where the need is greatest. What we need is a structured, well-regulated approach that supports both systems.” A broader view In 2024, medical tourism contributed RM2.72 billion (or 0.14%) to Malaysia’s gross domestic product (GDP) of RM1.9 trillion. By 2030, the Malaysia Healthcare Travel Council aims to boost medical tourism revenue to RM7 billion — raising the industry’s contribution to 0.26% of the projected national GDP, estimated to be in the region of RM2.7 trillion based on annual growth rate of 5% per annum as projected in the 13th Malaysia Plan. Factoring in its multiplier effect, medical tourism is not that luxury add-on to the economy that many assume. It is in fact a quiet economic engine, growing in power — supporting jobs and spreading benefits far beyond hospital corridors.