Online Hotel Booking Site Agoda Says Their Ready for the Long Haul

Singapore based online hotel booking site Agoda says the online travel agency is maintaining stable cash flow despite covid-19. Chief Executive John Brown said Agoda can weather months or years of travel restrictions thanks to the strength of domestic hotel and travel bookings.

In May the online travel booking platform laid off 1,500 of its 5,500 employees globally. Above all because of a sharp drop in hotel bookings, following covid-19l lockdowns. Of its 4,000 remaining employees, over 2,200 work in Thailand.

Agoda also cut salaries of senior leadership team by 20%. Chief executive John Brown also said he will not be paid for the remainder of the year.

“It was one of the hardest days of my professional career,” Mr Brown said regarding the layoffs. “But from a cash flow perspective we are okay now. Furthermore we won’t have to cut more staff even if the situation continues for 1-2 more years.”

Despite bottoming out to near zero bookings due to the lockdown in April, he expects domestic hotel bookings this year to match 2019 levels. International hotel and travel bookings, which are often for longer stays at upper-scale accommodations, have dropped significantly.

Domestic trends in hotel booking

Mr Brown said in 2019 there was a near even ratio of domestic to international hotel bookings in Thailand. However this year international hotel bookings account for only around 3%.

Domestic trends in hotel booking show that consumers are booking better 3-4 stars quality hotels. Mainly attributed to people who usually travel abroad redirecting their travel funds to domestic travel.

The duration of hotel stays is just 1-2 nights over the weekend, a far cry from 1-2 weeks for inbound travellers.

In a recent survey of Agoda users, 78% of Thais say they will travel locally this year, the highest of any market.

According to the Bangkok Post the top domestic hotel destinations for Thais are Bangkok, Pattaya, Chiang Mai, Hua Hin and Phuket.

Agoda also sees emerging secondary cities such as Nakhon Si Thammarat; Nakhon Nayok; Khon Kaen; Udon Thani and Chanthaburi. They are increasingly playing a more important role in domestic tourism.

As the first Online Travel Agency to feature in the government’s domestic tourism stimulus. Agoda has delivered some 1 million hotel room-transactions by zeroing out all commission fees for hotels listed under the campaign.

Three programs with hotel partners

The industry standard for commission fees on Online Travel Agency websites sits at 10-15%. He said as 80% of hotels in Thailand on Agoda are small and medium-sized enterprises (SMEs). The stimulus campaign has been effective in helping these hotel businesses.

Agoda has adapted to changes in consumer preferences by adopting three programs with hotel partners.

To ensure consumer confidence in health and safety measures, the site implemented “Hygiene plus”, a verification feature that allows travellers to identify hotels that meet a checklist of standardized health and safety measures.

The site also offers an easy cancellation feature, offering higher flexibility for travellers.

Lastly, Agoda has implemented a “go local” campaign in addition to the government’s stimulus campaign, offering up to 25% discounts on selected accommodations.

Agoda is among the most successful tech companies started in Thailand with its headquartered in Singapore.

The company was purchased by Bookings Holding in 2007, which also owns Priceline and Bookings.com. Bookings Holding has a market cap of over US$70 billion.