Skift Take

The industry blames quarantines for keeping tourists away. Agoda is on a quest to make it a solution, not the problem, to revive international travel to Asia. Here's why and how.

As Asia wrestles with the double whammy of Covid-19 flare-ups and slow vaccine rollouts, quarantine-free travel in much of the region is an elusive prospect.

India, Thailand, Japan, and the Philippines are wrangling with new surges and faster-spreading variants. It is now doubtful if Thailand will lift quarantine for vaccinated tourists as planned from July 1.

With Asia accounting for about 70 percent of travelers for most Asian countries, there will be quarantines unless vaccination leapfrogs rather than snails along. The best the Asian industry can hope for are shorter quarantines if situations improved, while quarantine-free will remain exceptions.

So far, the Maldives is the only Asian destination that does not quarantine tourists, while Australia-New Zealand the only quarantine-free travel corridor between two countries in the region. A second, between Singapore and Hong Kong, will start on May 26, the cities announced today (April 26).

Agoda’s CEO John Brown believes that quarantine will remain a stumbling block to international travel for much of Asia until at least next year, or even become part of the travel landscape, depending on how the virus evolves.

“Asia’s trailing behind much of the world with vaccine roll-out. Most Asian countries have well under 10 doses administered per 100 people. A full roll-out won’t happen for at least a year in most places here and, even if it does, there are so many complications yet to be seen.

“It’s not clear if this virus will become endemic or not, i.e., if it will continue around the year like the flu or if we will get lucky and have Covid disappear altogether,” said the head of the online travel agency, part of Booking Holdings.

Likewise, Bruno Huber, general manager of the first quarantine hotel in Bangkok, Movenpick BDMS Wellness Resort, said given the slow speed of vaccination and Thailand’s third wave, there will “probably be some sort of quarantine in Thailand until the end of this year.”

Cocktail Mix

But if quarantines are here to stay, why not make them less dreadful, more palatable and easy to book without without compromising safety?

Agoda, the first global online travel agency in Asia to digitize quarantine hotel bookings, sees these stays as part of the cocktail mix to facilitate safe reopening that includes rapid testing, health certificates and Covid-19 vaccine passports.

It cited Thailand and Hong Kong as examples of a successful public-private sector partnership to help travelers embrace quarantine.

Thailand mooted its alternative state quarantine program, now well-known as ASQ, in March last year and has since hosted thousands of international travelers on it. As a gauge, the Movenpick accommodated 4,800 guests in 250 rooms on 14-day quarantine from April 25, 2020 to April 1, 2021, said Huber. As of April 1, there are 136 quarantine hotels in Bangkok with 18,014 rooms.

Under the program, a hotel package covering the quarantine duration stipulated by government is needed for approval to enter Thailand. Travelers have the flexibility to choose their own hotel among those that have passed rigorous standards in six categories set by the public health and defense ministries. Hotels are free to set their own prices for the package, which essentially includes room, three meals a day, two Covid tests and airport transfers.

Agoda sees a role in such schemes by doing what online travel agencies do best: make them accessible and efficient for travelers to search hotels and availability, compare rooms and prices in multi languages, and book their stay.

“We generate incremental bookings for partners, but our real value is in technological expertise and speed. Situations are changing so quickly. For instance, if Thailand says as of June 1 quarantine is no longer 14 days but three, we can make that change instantly,” said Brown.

Quarantine hotels in Thailand are now offering seven, 10 and 14-day packages, following government’s move to reduce quarantine from April 1. Technology partners such as Agoda can move swiftly to accommodate any government requirements or changes, said Brown.

So far, Agoda has a dedicated “ASQ” booking platform for only Thailand and Hong Kong. It is in discussions with more governments, including Singapore, on ways to make quarantine part of the solution, not the problem, to revive travel.

Pain Points

A year on since Asia pioneered the use of hotels as quarantine facilities, there’s still much to be done by countries across the region to ease the pain points of a Covid-19 travel confinement while keeping safety the priority.

Given a choice, travelers would rather stay in a hotel than a state facility, which carries the stigma of hardship. Next, they would rather stay in the hotel of their choice, and have the information to guide them in making that choice.

But there aren’t peer reviews, really, which means guests must contact each hotel individually for more details. TripAdvisor does not accept reviews of ASQ hotels, saying they don’t offer “standard traveler or guest services.”

“This position by Tripadvisor makes no sense to me,” wrote a traveler from Vancouver who wanted to share his quarantine experience at Mira Moon Hotel Hong Kong on the platform. “This would seem to me to be a great service Tripadvisor can provide.”

What’s harder for travelers is ASQ solutions aren’t equal. For example, travelers on a 14-day quarantine in Sri Lanka are allowed to choose their accommodation from a list of safe-certified hotels. They may even choose to stay at more than one safe-certified hotel within the 14-day period – a case in point of how valuable an online travel agency can be to secure rooms on one platform. Guests can also go anywhere within the hotel and are even allowed to visit approved tourist sites at allocated times.

In contrast, travelers undergoing a 14-day quarantine in Singapore are assigned by government officials to dedicated facilities, among them hotels, at a fixed cost of S$2,000 ($1,506) including meals and taxes. That is, they won’t know where they would stay, let alone choose their type of room. And they most certainly aren’t allowed out.

“Each government has its own definition of what it deems safe and, absolutely, safety must come first,” said Agoda’s Brown.

That said, it is “well-documented” quarantine programs as launched in Thailand and Hong Kong “is working,” he added.

Why it Works

Thailand’s quarantine has two aims, namely, prevent and control the spread of Covid-19 and help hotels generate income, said Tares Krassanairawiwong, director-general, Department of Health Service Support in Thailand.

On both counts, the scheme delivers, going by insights from the Movenpick hotel.

Of the 4,800 visitors, 25 tested positive, a minuscule 0.005 percent, and were immediately taken to a hospital, which is part of the package, said Huber. None of them were ill. Not a single staff tested positive.

That’s because safety protocols are meticulous and finicky. Here’s an example: Room attendants must remove their entire protective gear after cleaning each room, dispose of the gear as trained, and wear a new set for the next room. Each guest is taken to a disinfected holding room until cleaning is completed and the room is disinfected again for the next guest.

The hotel incurs an additional cost of about one million baht ($32,000) per month to meet quarantine protocols, according to Huber.

Owned by the largest private hospital network in Thailand, BDMS, the hotel has the advantage of its parent’s medical know-how to layer government health protocols onto hotel operations. (BDMS founder and owner, Prasert Prasarttong-Osoth, also owns Bangkok Airways.)

“Safety is the most important factor. We follow protocols so that neither staff nor guests are infected,” said Huber. “But we also want to create a more agreeable stay than the guest expects. We empathize that it’s not the holiday they want.”

So internet bandwidth was tripled. Press Reader subscription was enhanced to Premium so guests could access more than 7,000 newspapers and magazines. Guests could have a treadmill, cross-trainer or other fitness equipment in-room on rental. As much as 40 percent of meals are special request, be it Italian, kosher, ketogenic food, you name it.

Over in Hong Kong, the same sentiments to balance safety and guest comfort are echoed by the Dorsett Wanchai, one of first few hotels to embrace ASQ since March 2020.

Staff view quarantine as a measure to help curb the possible spread of Covid-19 in the local community, thus go the extra mile to ensure their quarantine is bearable, even enjoyable, said the hotel’s general manager Anita Chan. Moreover, Hong Kong’s quarantine duration is lengthy, at 14 days and 21 days.

Dorsett’s latest initiative to increase guest comfort is investing in a Smart IoT UV-C HEPA Air Purifier for every floor for better air quality and circulation.

Income generating?

Given all this, how are the quarantine hotels an income generator?

“The quarantine business won’t make anyone super rich,” said Huber. “It’s just enough to pay bills and leave a little behind.”

But his owner’s motive was not to make money, he said. It’s to keep the hotel open so that staff wouldn’t lose their jobs.

“Our chairperson [Poramaporn Prasarttong-Osoth] even asked me to reduce the price of our quarantine packages so more people could afford them,” he said. Prices were kept under 55,000 baht ($1,753) for a 14-day stay in a superior room.

Not one of the 245 staff lost their jobs. None complained when reassigned to new roles that a quarantine hotel needs. This helps sustain the economics of the business.

As an quarantine hotel is labor intensive, more reservations staff, chefs, kitchen helpers, cleaners and housekeeping staff, among others, are needed, said Huber.

“For example we quickly realized we need more reservations staff because voice calls and email enquiries are pouring in. People don’t know how this whole ASQ works, have questions on a medical questionnaire they must complete, and so on. A phone call can take 20 minutes. So quite a few of my sales people have gone into reservations, which is 24/7,” said Huber.

Since September 2020, service charge is back to pre-Covid levels thanks to the quarantine business. In Thailand service charge is more than salary for staff. This, when thousands of hotel employees have lost their income.

Strategic Partners

For both Movenpick and Dorsett, the business is direct. Online travel agencies account for only 4 percent of bookings in the first four months for Movenpick.

A reason could be Agoda is alone in the game — not even its sister Booking is in it — and started fairly recently in late November. Its competitors are local and smaller online platforms.

But both hotels said online agencies are important strategic partners. “They reach a wider audience and some are strong in certain geographical markets,” said Chan. “We value our collaboration with OTAs in providing accommodation to those in need during these unprecedented times.”

Asked if the absence of other global online players is validation perhaps the business is not worth it, Brown said, “The economics wasn’t the consideration at all. At launch, we knew that not many people would come into quarantine in Thailand, maximum 700 a day. If anybody was doing it on a pure ROI calculation of how much money they would make by doing this, the answer would not have been good. So if companies in the West look at it from that point of view, they’d probably choose to pass.

“We looked at it differently. We’re a Thai company, hotels are suffering, people are suffering, isn’t this the right thing to do to help the government get people coming in safely?”

Agoda, according to Brown, has a lower margin on quarantine hotels. “It’s not done for profit,” he said. “If Asia were to do quarantine for years, and I really hope not, it may be a bigger thing, but that wasn’t the calculus on our mind.”

At present, it sure looks Asia will be doing quarantine for quite some time. Talking to governments to partner hotels and technology companies to do it better is a smart move.


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Tags: agoda, hotel quarantines, online travel agencies, thailand

Photo credit: Quarantine at Movenpick BDMS Wellness Resort Bangkok: Safe and bearable. BDMS Wellness Resort Bangkok

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