With Thailand already deemed to be an ageing society, meaning at least 10% of the population is over the age of 60, investments geared towards the elderly have gained significant attention.
New business registrations for elderly care services rose 17.5% in the first seven months of this year, according to the Business Development Department.
Thosapone Dansuputra, director-general of the department, said 67 new businesses in the category of elderly care were registered in the first seven months of this year, up from 57 year-on-year.
The newly registered businesses had total registered capital value of 93.7 million baht, down by 28.7 million baht or 23.4% year-on-year. The department attributed the decrease in capital value to the relatively small scale of these businesses.
"The trend for the elderly care business this year shows a renewed interest level similar to that seen before 2022 and is projected to continue increasing, possibly approaching levels seen before the pandemic," said Mr Thosapone.
He added foreign investors have also shown an interest in investing in the elderly care sector. As of July 31, 2023, the total value of foreign investment stood at 182 million baht, accounting for 5.89% of total investment in this sector. Foreign investment in July alone increased by 24.6 million baht, representing a growth of 15.6% over July 2022.
In terms of the home countries of the foreign investors putting their funds into the country's elderly care sector this year, as of July 2023, the top five comprised Singapore (1); with an investment value of 89.8 million baht, accounting for 49.2% of foreign investment in this sector; Switzerland (2) with an investment value of 36.1 million baht (19.7%), Taiwan (3), with an investment value of 18 million baht (9.85%), China (4) with an investment value of 17.8 million baht (9.77%), and Japan (5), with an investment value of 6.35 million baht (3.47%).
Total investment value in this sector as of July amounted to 3.1 billion baht. This comprises Thai investments worth 2.92 billion baht and foreign investments of 182 million.
Mr Thosapone said the elderly care business is limited by compliance with standards set under the Health Establishment Act, which aims to ensure that businesses maintain standards of quality in terms of facilities, services and safety. This requires obtaining permission before commencing such operations.
Operators are also required to undergo training and examinations, and they must obtain a licence from the Health Service Support Department. These regulations, effective since Jan 27, 2021, require operators to prepare and comply with the law regarding facility preparations, the building premises, restrooms, various ramps, bed spacing, and the employment of specialised staff.
Businesses need to obtain a licence for their operations, and these regulations require higher investment costs, he said.
There is also a shortage of personnel, such as caregivers and nursing assistants. These positions require a considerable number of staff and they tend to have high turnover rates. This situation does not align with the growing population of elderly people.
Most caregivers are trained via nursing schools, completing courses in elderly care and receiving professional certificates and practical training. Additionally, Thai families have been taught according to Thai culture to take care of their elderly relatives, he said.
The number of elderly care businesses established per year over a five-year period had been 103 on average up to 2022. However, registrations fell to 93 last year due to the economic slowdown.
According to Mr Thosapone, given the overall market value of elderly care businesses in Thailand, based on figures reported to the Commerce Ministry in 2022, revenue from elderly care businesses stood at 1 billion baht in 2022, accounting for just 0.002% of total revenue from all types of businesses in the country.
Although elderly care businesses generate revenues exceeding 1 billion baht, it's worth noting that many businesses in this sector still operate at a loss, particularly those in the small-scale category. This could be attributed to the challenges associated with administration and operational costs.