Lodging is Filling Up As Medical Tourists Flock to India

Medical Tourism Demand Outpaces Lodging Supply

Medical travel is on the rise, with India being one of its main beneficiaries. Patients from the United States and Europe are embracing the drastically lower costs of outsourced medical care, known as medical tourism. These lower costs entice more and more medical tourists to venture abroad to countries like India, Thailand, and Argentina. Unfortunately, in India, the tourist infrastructure is not yet ready for this surge, leaving a shortage of “star-category” (1 to 5 stars) hotels in metro or tier-II Indian cities. Only about 7% of the countries hotels are in the star category (meaning they have both met the criteria and paid the required fees for the ministry of tourism’s esteemed rating), and medical tourists are competing for occupancy like never before.

Higher Costs Due to Medical Tourism

As long as there is increased demand for lodging due to medical tourism, patients and vacationers can expect to see corresponding increases in lodging costs. For example, luxury accommodations command around $300-400 USD per night. Some four-star hotels, like Delhi’s Holiday Inn, ranges from $150-230 USD per night. According to Michael G Herrmann, Director of Operations, Intercontinental Hotels Group Asia Pacific”

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“Rentals have gone up 15-20 per cent in the past year, and will continue to rise for another two years until the supply catches up.”

The basic tenets of economics suggest that as room and board become scarce, hotel costs will become premium. As those costs rise, however, the land rates will rise just as significantly, heightening barriers to entry for land developers. This means the supply of tourist-quality rooms could take even longer than anticipated to catch up to the still-growing demand. Despite the low availability of rooms, medical tourism still undercuts the high costs of local medical care. A caution to medical tourists though: make your hotel arrangements early when planning medical travel to India.

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