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10 Aug 2022

Econ Digest

Nursing home business expected to grow well despite facing high cost of living as boosted by seniors-patients with purchasing power


        Although consumer purchasing power is under pressure from the high cost of living and facing the uncertainties of COVID-19 outbreaks, the nursing home business is still one of the businesses that may grow due to users’ demand for services and adequate purchasing power. KResearch projects that spending on nursing home services will reach THB12.7 billion in 2022, an increase of 3.5% YoY. Major users are still Thai patients and seniors who require long-term care and have moderate to high purchasing power; numbers are estimated at around 130,000 people per year. Even though the percentage of international patients is still small, the number of international patients will gradually pick up as tourism confidence increases after Thailand opens up to foreign tourists. However, world issues that affect international travel must be monitored, including the Russia-Ukraine crisis and increasing travel expenses due to rising fuel costs.  

        There are currently at least an estimated 2,000 nursing home operators, over 95% of which are classified as small businesses, covering both nursing home operations and home care services (by providing caregivers in home).Customers can choose to use a short-term service with daily/hourly rates or a long-term service (3-6 months or more). However, due to purchasing power constraints i.e. the average monthly service fee is not less than THB30,000, most nursing homes are still concentrated in Bangkok and nearby areas namely Nonthaburi, Samut Prakan, Ayuthaya, as well as tourist cities like Chiang Mai, Phuket and Surat Thani that can accommodate some foreign patients. Looking ahead, the nursing home business could also expand into second-tier cities of interest, as well as invest in areas promoted by the government. The nursing home business remains an attractive business opportunity for existing and new players to meet the growing demand as Thailand is approaching a fully ageing society and due to the increased risk of diseases such as chronic non-communicable disease. With intensified competition for this limited potential customer segment, the long-term success factors of the business depend on service quality, advantageous location, travel convenience and reasonable service charges.

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