Come for the Seven-Star Hotel, Stay for a Nose Job

American Academy of Cosmetic Surgery Hospital Suite
An orthopedic bed stands in a private suite for patients at the American Academy of Cosmetic Surgery Hospital (AACSH) at Dubai Healthcare City in Dubai. Source: AACSH via Bloomberg

Most tourists flock to Dubai for its man-made islands and the world’s tallest building. Marina Ivanova went to the desert city for liposuction.

The Moscow resident had looked for a place that would suit both her medical and vacation needs. While access to top-notch surgeons was key, just as important were the golf courses and spa centers during her monthlong getaway.

“I had always wanted to come spend some time in Dubai, so I thought, ‘Why not combine the trip?’” said Ivanova, who works in the logistics department of a glass manufacturing company. “I heard that cosmetic surgeries here are quite well-known.”

Already one of world’s ten most visited cities, Dubai is counting on more people like Ivanova to mix their holidays with high-end treatments for a luxurious form of medical tourism, rivaling Thailand and India. Now, it’s trying to attract 500,000 such visitors, adding 2.6 billion dirhams ($708 million) to its economy by 2020, according to a Dubai Health Authority plan announced this year.

Clinics like the American Academy of Cosmetic Surgery Hospital are helping. The marble-floored lobby is adorned with sculptures of Greek gods and gold-enameled vases. Saudis sit beside Europeans on a purple velvet couch under a matching chandelier as they wait for nose jobs or breast implants. A private elevator carries celebrities and Arab royalty to a VIP suite as Rolls Royces and Ferraris line the parking lot outside.

Dubai’s Luster

“The presentation and the aura are just as important as the quality of care we provide,” said Michael Stroud, chief executive officer of the hospital, the largest of its kind in the Gulf region. “We are capitalizing on Dubai’s luster.”

For centuries, people have traveled to hot springs and seaside resorts in search of better health. In the 1990s and early 2000s, as rising global trade and tourism converged with the ballooning costs for medical care in developed countries, emerging markets such as India and Thailand set out to recruit patients by providing cheaper care at internationally accredited hospitals. India’s medical tourism industry will reach $6 billion by 2018, according to the PHD Chamber of Commerce and Industry.

Among the challenges Dubai may face as it seeks to capture a share of an industry worth more than $30 billion, is that it’s too expensive to compete on cost with destinations like India, and isn’t highly regarded enough to compete on quality with the U.S. and Europe, according to Josef Woodman, chief executive officer of Patients Beyond Borders, which publishes books on medical tourism. What the desert city does have is a reputation for luxury, and it’s using that to carve out a niche in the medical tourism market.

Indoor Skiing

Lacking the oil and gas of neighboring Abu Dhabi, Dubai racked up $129 billion of debt transforming itself into a tourist destination and the Middle East base for banks such as HSBC Holdings Plc and Deutsche Bank AG. The emirate is the home of the Burj Al Arab, a seven-star hotel, and a 22,500 square-meter (242,200 square-foot) ski resort that pumps artificial snow from inside the world’s largest shopping mall.

“Tourists already come to Dubai for shopping, sight-seeing and luxury,” said Raja Easa al Gurg, deputy chairperson of the board of directors at Dubai Healthcare City, a sprawling 4 million square-foot health-care zone that’s home to two hospitals, and 120 outpatient medical centers and diagnostic laboratories. “We need to scale up our health-care industry anyway, as millions of people flood our city and Dubai becomes a major financial hub.”

Debt Crisis

Such efforts over the past decade have met setbacks and disappointments. The transformation of the local medical system came to a halt in 2009 after Abu Dhabi was forced to bail out its neighbor to prevent a default. When the debt crisis froze investments, Harvard University and the Mayo Clinic, who had been brought in to help upgrade Dubai’s medical system, quietly packed up and left the health-care zone.

In 2011, Princess Haya Bint Al Hussein, one of Dubai Sheikh Mohammed Bin Rashid Al Maktoum’s wives, was appointed to restructure the hub. She hired a new CEO and a new strategy was laid out, including a renewed effort to boost medical tourism, with a focus on elective surgeries such as aesthetic procedures. The approach spurned what had been an emphasis on real-estate leases and instead focused on establishing centers of excellence in areas such as cardiology and oncology.

“It started as a real estate venture,” said Woodman. “Building came up and there were lease agreements. What they didn’t have was a training infrastructure for doctors. Expertise just doesn’t spring up out of the desert. It takes generations.”

Competing Destinations

Today, a gleaming new building at the heart of the health-care zone, the Mohammed Bin Rashid Academic Medical Center, bears the name of Dubai’s ruler instead of a vaunted U.S. university. During a tour of the area’s education and research arm, state-of-the-art training facilities, classrooms and a library were on display, though few people were seen wandering the building halls.

The government is now focusing on branding Dubai as a health-care hub through advertisements as well as partnerships with medical tourism facilitators, who will package deals for visitors, said Laila al Jassmi, who until last year headed the Dubai Health Authority’s Health Policy and Strategy Sector.

Clinics such as the American Academy of Cosmetic Surgery Hospital have promoted their services directly to residents of eastern European and Gulf countries, the main markets Dubai is seeking to target.

Direct Marketing

“Dubai is an 8-hour flying time from two-thirds of the world’s population and has earned a growing reputation as a leading global gateway and hub for trade, logistics and tourism,” Sheikh Ahmed bin Saeed Al Maktoum, who chairs the boards of some of Dubai’s biggest companies, said in a Dubai Healthcare City commercial aired on CNN this year. “Now we are focused on earning a reputation for excellence in health care.”

Dubai Healthcare City representatives say its focus on elective surgeries and a plan to build a wellness center will create a niche market. It’s still working to improve its care in areas such as oncology and cardiology to keep locals from going abroad for more complicated procedures. Demand for such services is rising with the rate of obesity among a population that craves fast food and gives short shrift to exercise.

“With any new country, you basically build up your health system,” said Amer Ahmad Sharif, managing director of the education division at Dubai Healthcare City. “No matter what you do, there will be some specialized types of care that you will not be able to cater for at a certain volume.”

Going Abroad

While Dubai introduced universal health care this year, large gaps exist between state-provided health care and private care, according to Alpen Capital, an investment bank focused in the Gulf and Asia. More than 30 percent of the emirates population still prefers going abroad for care, a legacy of a time when the health-care industry was practically non-existent.

“I know stories of patients going abroad for infertility treatment for a full year,” said David Hadley, chief executive officer at Mediclinic Middle East, Dubai’s largest private health-care company with two hospitals and eight clinics. “The infertility centers are fantastic here, but there are still misperceptions.”

Dubai’s economy is recovering and growth may reach 4.7 percent this year, the fastest pace since 2007, according to Mohamed Lahouel, chief economist for the Dubai Department of Economic Development. That’s led foreign health-care institutions to plant their seeds back in the UAE.

Moorfields Dubai

Moorfields Eye Hospital, the 209-year-old London clinic, opened its first branch in Dubai in 2006 and has plans for another branch in Abu Dhabi. The hospital, which gets as many as 15 percent of its patients from abroad, is betting that wealthy Gulf residents, who for decades have flocked to Europe and the U.S. for medical treatment, will increasingly stay in the region for medical care, said Mariano Gonzalez, managing director of the Moorfields UAE division.

“If we can provide the same quality of service in the UAE as we provide in London, all of a sudden you have Saudis that no longer need to fly all the way to London for care,” said Gonzalez. “It’s a slow process, but it is happening.”

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