Thailand, known to many as Asia's center for cosmetic surgery and sex-change operations, is beginning to lose its competitive edge in the medical tourism space, according to analysts.
The strengthening Thai baht, which is currently at a 13-year high against the dollar, together with political instability, have tainted the image of a country once viewed to have affordable and accessible medical offerings.
"Thailand is losing momentum and its position. They don't appreciate how much other countries are moving up," said Julie W. Munro, CEO of InterMed Global, a leading website that caters to tourists looking to undergo medical procedures abroad.
For April-May of 2010, many local hospitals reported a drastic drop in the number of foreign patients traveling to Thailand for treatment.
Munro said the country's international health service industry was "very badly hurt" following the violent protests in the country's capital Bangkok earlier this year. "This came on top of the damage done by the global economic crisis and related decline in air travel," she added.
Richard RothHaas of Medical-Tourism-In-Thailand.com, shares her view.
"People aren't going to come here if they can't go home," he said, noting that many of the protests that rocked the city were in close proximity to prestigious hospitals.
The rising price of airfares and hotel rates also means that many medical procedures can now be carried out in the United States at a comparable cost, Munro said.
The cost of breast augmentation in Thailand at a reputable hospital, for example, averages 120,000 baht ($3900), excluding travel and accommodation expenses. A similar procedure in the United States would cost $3,331, according to American Society of Plastic Surgeons.
But not everyone agrees that Thailand's medical tourism, which accounts for $2 billion of Thailand's overall $17 billion tourism sector, is falling behind.
John Lee, vice president of Bangkok Dusit Medical Services - the largest private hospital operator in Thailand - remains upbeat about the sector's prospects.
"Last year our foreign patient growth was next to zero... but they are coming back especially in the last two months," said Lee.
He expects a backlog of patients, who were held back by the financial crisis, to return to Thailand for treatments at the beginning of 2011. Due to strong demand, the healthcare operator is planning to expand two of its facilities in the coming year.
Lee also downplayed the effects of a stronger baht.
"The Thai baht has had no major impact on the industry. From Southeast Asia, all currencies are going up. Between us (Thailand) and Europe the price difference is so much we are about one-tenth of Europe and U.S. prices," Lee said.
Still, Thailand's position is being threatened by new competition.
According to Munro, affordability is the key reason why countries like India and Mexico, are emerging destinations that will challenge Thailand's dominance in the market.
A report by Deloitte Center for Health Solutions, forecasts that India's medical tourism space will expand up to 30 percent annually from 2009 to 2015.
But she added that these countries still have some way to go in terms of developing their infrastructure to effectively compete globally.