There’s a new player in town, and there’s no doubt many travel services will welcome it with open arms.

Taiwan hospitals the new Taj Mahal?

OK, medical tourism wasn’t born yesterday — insiders estimate there are thousands of companies doing this around the globe, many of them mom-and-pop operations — but pretty darn close. More importantly, it’s growing up quickly, with Formosa Medical Travel predicting a 14 percent growth in Asian markets alone from 2009 – 2012. In a year when any growth at all elicits applause, that’s a dazzling future. What’s more, Formosa says high-cost surgeries like orthopedic, cardiac, and cosmetic top the list of drivers for medical tourism.

So American-owned Formosa has quietly built a travel niche from this trend, signing agreements with leading hospitals in Taiwan, and recently earning the backing of the Taiwan External Trade Development Council. Taiwan’s health care system is currently considered  one of the most efficient in the world, with administrative costs below 2 percent.

“While the debate over health care reform in the United States continues, the costs of medical care in Taiwan remain among the lowest in the world,” said Don Gilliland, Formosa’s chief operating officer, in a November 30 press release.  For example, the price of total knee replacement surgery at a JCI-accredited hospital in Taiwan, including all surgical costs, VIP accommodations, concierge service, transportation, and round-trip airfare, is generally less than $15,000, while the price in the United States is often upwards of $60,000.

At the moment, Formosa specializes only in arrangements for knee and hip replacement surgeries. And, sticking to the traditional travel agency format, it does not charge a fee for its role in the planning.

Meanwhile, the Medical Tourism Association is busy certifying members with similar services  — think Healthbase, Surgical Trip and WorldMed Assist — in an effort to shed light on the quality services such businesses can provide.

The real question for the travel industry is how to get in on this compatible profession before insurance agents seize the bigger slice of the economic pie. My suggestion: the larger travel agencies need to quickly open a division and recruit former medical employees to join as their staff. They already have the skills to book airlines, hotels and transportation. But it will take a different expertise to jump into choosing hospitals and surgeons.

Photography: Kazuaki.h (courtesy of Flickr)

In a surprise announcement on Wednesday, 25th Nov, 2009, Dubai made it public that it was seeking a 6-month delay from creditors on about $60 billion worth of debt – mostly held by Dubai World and its real estate division  – Nakheel Builders.

In the US, their hospitality investments include the Mandarin Oriental and W hotels in New York, and a $375 million investment in the Fontainebleau Miami. Their biggest investment in the US hospitality sector is with MGM Mirage, where they plowed in nearly $6 billion in 2007 for a 50% stake in the City Center project and a 9.5% stake in MGM Mirage. 

City Center, Las Vegas

The 67 acre, $8.6 billion project is too big to fail, with the fortunes of tens of thousands of people in Las Vegas riding on it, not to mention the future of MGM Mirage, Las Vegas tourism and the political future of Sen. Harry Reid (D-NV).

For the record, MGM Mirage has put out a statement asserting that Dubai World’s decision to delay debt repayment does not change anything, including the phased opening schedule and operations which begin on Tuesday. The last thing that City Center needs now is talk about uneasy lenders.

To make matters worse, Dubai World has already tried once before to back out of its funding committments for the project. Dubai World’s subsidiary Infinity World, which is the on-paper partner with MGM Mirage, filed a lawsuit earlier this year in March, asking to be freed of its obligations.

Their reason for backing out was an SEC filing made by MGM Mirage on March 17  which stated that they “cannot provide assurance” that City Center would generate sufficient cash flow from operations to meet future payment obligations and other liquidity needs. Dubai World wanted out because they apparently believed MGM and City Center was heading in a -quote “unsustainable direction”.

Or they already knew Dubai had a big debt crisis about to blow, and the City Center lawsuit was one way of starting disengagement. Either way, MGM Mirage was in a soup.

Sen. Reid's City Center ad

Sen. Harry Reid and investor Kirk Kerkorian (who has a 37% stake in MGM Mirage) stepped in, and made calls to the banks and lenders, cobbling together a $1.2 billion financing package, which helped stave off a crisis at that point in March.

Sen. Reid has been running a campaign commercial touting how he saved City Center from being shut down by the banks and saved 20,000 jobs.

But now, as Dubai’s debt crisis hits Las Vegas, and Kerkorian – one of Sen. Reid’s close friends, says that he might reduce his stake, MGM Mirage is officially on it’s own now, with a massive project being unveiled one week after it’s partner country goes broke.

City Center photo by snowpeak

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According to a new survey from AirPlus International, a global provider of corporate travel payment solutions, more than 60 percent of the travel management professionals it surveyed are not aware of the U.S. Travel Promotion Act. There’s no good news to follow that: 29 percent of those who have heard of it are unsure of the details, 53 percent were unsure how the money collected would be used and another 73 percent believe other countries will be glad to reciprocate on fees for U.S. travelers.

Ouch.

The breakdown

For the record, the TPA will create a non-profit corporation and a new Office of Travel Promotion within the Department of Commerce. The funding comes from charging $10 per visa waiver and the private sector will match the money dollar for dollar (20 percent cash, 80 percent goods and services).

“This Act will certainly have an impact on the travel industry overall, not just business travel … Clearly, the results indicate that there is not enough awareness of the Act,” says Richard Crum, AirPlus’ president.

But don’t mistake ignorance for rejection. Acceptance among those who do know the score is running high:

• “I think it’s very much what everyone envisioned,” Joe McInerney, president of the American Hotel & Lodging Association told his trade press. “It’s a no-brainer. It’s a win-win situation; doesn’t cost the government anything. It attracts more people and creates more jobs.”

Graph of responses

• Oxford Economics estimates anywhere from $1.8 billion to $4 billion of new revenue will be brought to the U.S. These estimates are based on the revenue that was generated in comparable campaigns in other countries. Studies in the U.S. show that previous one-off travel campaigns have pulled in $117 for every $1 invested.

Perhaps the folks answering AirPlus’ survey have tapped into Europe’s reaction to the looming law. According to VIPs in the European Union, “The key is these procedures are irksome, and making them more irksome is generally risky. Travelers don’t care if it’s $10 or $20, the whole business is just an additional procedure.”

The bill is now in the Senate for approval.

Photography: AirPlus Community

Hosting the Olympics isn’t exactly all that its made out to be, in terms of visitors and tourism. Turns out that Vancouver and Whistler are suffering from something known as the ‘Olympic Avoidance Effect.’

The Westin Resort & Spa in Whistler

Hotel occupancy rates have tanked in Whistler and Vancouver in advance of the games, with year on year rates down by as much as 9.5%. The Westin Resort & Spa in Whistler is struggling to overcome a measly 10% occupancy rate, as of last week.

The drop in visitors is mostly attributed to American travelers hesitant to cross the border for fear of getting caught up in the bedlam and construction of the preparations for the Vancouver 2010 Winter Olympics.

With a woeful occupancy rate months ahead of the games, and the virtual certainity of an even bigger drop after the games, the only way the hotels in Vancouver and Whistler could have made up for the loss would have been high prices and occupancy during the Olympics. The occupancy they have, the prices not so much.

VANOC – the Olympic organizing committee, has a pact in place with most hotels under which they have all agreed to limit rates for Olympic visitors. To make matters worse, some of the hotels in Vancouver, who didn’t sign on to the pact, have gone rogue and are now fleecing travelers for as much as possible.

One of these hotels is The Robsonstrasse in downtown Vancouver. This hotel, which usually calls itself a discount hotel, is charging as much as $1200 for a suite which normally goes for $280, according to an article in the Globe & Mail. Media reports about how hard it is to get hotel rooms and the steep prices mentioned ($450 to $700) have turned off non-Olympic visitors well in advance of the games.

To clarify – these rates are only for the duration of the games (Feb 12-28, 2010), and mostly because all the cheap rooms have already been booked for these dates. But the stories add to the perception of chaos and price gouging, which non-Olympic travelers don’t want to get mixed up in.

End game – Other the high occupancy for the duration, the Olympic Games have created more problems than revenue for area hotels.

Westin Photo courtesy Starwood Hotels & Resorts

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