The idea of privately-run MIQ was first floated in August last year at a Covid-19 business summit, but was rejected by the Government because of the health and security measures needed.
Seymour said it was time to reconsider the idea, saying it was a way to bring back international students and workers - people who would opt to go to other countries if it was too hard to get into New Zealand.
He said he was proposing limiting it to vaccinated people, requiring all staff and contractors to be vaccinated, and requiring saliva tests every two days.
Seymour said hotels wishing to take part would have to be licensed and could lose their licence if they breached the conditions.
However, it would only be a viable option for those who could afford to pay for it: unlike the Government-run model, it would likely be based on full cost recovery as well as a profit margin.
Seymour did not expect it to be cheap, given the costs would include regular testing, security and all meals as well as the room charges.
Several of New Zealand's 330 odd hotels have been mothballed since Covid-19 resulted in bookings crashing.
They include some of Scenic Circle's hotels in the South Island, which were closed earlier this year because of the lack of tourists.
"Private MIQ capacity will be an essential tool when bubbles pop and suddenly thousands need to isolate on repatriation. The simple question for the Government is, do they want to safely reconnect with the world or keep us in crisis mode forever?" Seymour said.
James Doolan, strategic director for Hotel Council Aotearoa, said the council did not have a position on such a move, but hotels were struggling.
He said some appeared to believe the hotel industry was being propped up by the Government's MIQ system, but that was only 31 hotels out of about 350. It was becoming increasingly important to get an idea of when the borders might ease.
"Hotels are such a huge capital asset that the timeline question is increasingly important. Hotel owners are having to have those discussions with bank managers."
There had been little direct communication from the Government with the industry – which needed to stay afloat for when those borders did open again.
The Government is yet to produce its plan for relaxing the borders once vaccination levels are high enough, but is looking at measures such as allowing vaccinated travellers to isolate at home for a shorter period than the current two weeks in MIQ.
When the idea of private MIQ was floated last year, director-general of health Dr Ashley Bloomfield said isolation and quarantine hotels were subject to strict rules which private organisations would have to follow too.
The Government has also previously rejected a bid to set up a private MIQ facility for high-end travellers at a luxury hotel in Northland. It has also turned down bids by companies to set up private MIQ facilities for students or workers, citing limits on health services and staff and the rigorous health and security standards that had to be met.
The Government is now wrestling with the longer-term options for MIQ.
In July, Covid-19 Response Minister Chris Hipkins floated the prospect of the Government buying some hotels for MIQ, saying it was likely the isolation system would be needed in some form for the medium-term future.
He has also suggested a purpose-built facility was possible but would take time to develop and build. Some health experts have called for a facility, saying there were many shortcomings in using hotels as quarantine facilities, including ventilation requirements.
