What is the hotel channel manager?
Channel manager is a software that helps hotels to manage their real-time inventory distribution and rates on different channels and acquire reservations from them.
Here, channels mean hotel booking sites like:
| OTAs | Booking.com, Agoda, Expedia, etc | ||
| GDS | Amadeus, Travelport, Pegasus, etc | ||
| Vacation rental portals | Airbnb, FlipKey, HomeAway, etc | ||
| Meta search engines | TripAdvisor, Trivago, Google Hotel Ads | ||
| Including platforms like booking engine. | |||
Against the bookings made, these sites charge a commission (usually a percentage of total amount) to the businesses listed on them. Accommodation providers like hotels, hostels, resorts, get connected with these portals and list their inventories to sell.
Further, it assists hotels in expanding their reach across the globe by managing their listing (availability) on several platforms. Some of the best hotel channel managers also overcome the trouble of overbooking or rate disparity to a great extent.
How does a channel manager work?
Ideally, a hotel channel manager software provides a centralized platform to properties for managing their distribution across different platforms. As and when the bookings are recorded from any one channel, it automatically updates the latest rates and inventory on all the channels.
Here’s an example to give you a better idea:
Let’s say, you have a hotel with 10 rooms. You're getting bookings from 4 different channels viz OTAs (Agoda, Expedia, Booking.com, or any), booking engine, local tour operator, and meta-search engines.
- Now, you received a one-room booking from Booking.com. Thereafter, you have 9 rooms to offer.
- As soon as you receive that booking, the channel manager updates the revised inventory (i.e. 9 rooms) across all your connected channels.
- Now, you have the latest availability of rooms on different channels.
- Similarly, as and when the bookings are made, the hotel channel manager keeps the availability as well as rates in sync.
To be specific, the two major functions of the channel manager include:
- Updating the hotel details such as rate plans, rates, availability, and others on different connected platforms.
- To fetch bookings
Now, the channel manager has either one-way or two-way connectivity with OTAs, depending on the two main functions as mentioned above.
One-way connectivity: In one-way connectivity, the channel manager pushes only the rates and inventory on different channels, but doesn’t fetch bookings from the platform.
Two-way connectivity: A channel manager with the two-way connectivity with OTAs fetches the bookings, along with pushing rates and inventory.
Other than handling inventory and rate distribution, a channel manager benefits hotels in many ways.
What are the benefits of a hotel channel manager?
The channel manager facilitates the entire hotel management and is a true blessing to hotels. It streamlines various operations of your hotel, such as:
Accurate inventory and rate distribution: Without a channel manager, you have to manually log into the extranets of different OTAs to which your hotel is connected. Again, while you are doing this, you have to be extremely quick and accurate.
A hotel channel manager eliminates all these problems. Simply, configure your property details once. The system then handles the rates and inventory updates. When this entire process of channel management is automated, there are fewer chances of errors.
Overcome underbooking or overbooking: Bookings take place at every fraction of time on the OTAs. So, there are chances that while you are updating the inventories, you may receive a booking from other channels.
If you're not quick enough, you may receive frequent overbookings which can harm your revenue and reputation as well. Since the channel manager updates the inventory and rates in the smallest fraction of time, there are fewer chances of overbooking (provided you have an advanced channel manager that pushes fastest updates on OTAs).
On the same lines, it lets you utilize your inventory to the fullest. In this way, none of your rooms remain vacant.
Expanded hotel’s reach: It is a proven fact that connecting on maximum OTAs works best in any season. And with channel managers, hotels can get sell their rooms on as many channels as they want. You don't have to rely on limited booking sources.
A channel manager with maximum OTA connections can open doors to more revenue and bookings for a hotel. You can distribute your availability to a wider audience, by connecting to local as well as regional OTAs and even hotel global distribution systems (GDS). This will eventually help you expand your reach significantly.
Maintain rate parity: When you list your property on distribution channels like Expedia, MakeMyTrip, and Booking.com, it is mandatory for hotels to maintain rate parity across all channels. This means, regardless of the different commission you pay to different OTAs, you need to publish the same rate for the same room across all distribution channels.
Channel manager systems ensure that any changes you make in your rates are unanimously updated across all platforms in real-time, leaving no room for rate disparity issues. Thus, you can maintain rate parity effortlessly.
Save time and effort: With a channel manager, a lot of your manual efforts and time invested after inventory distribution is saved. The entire hotel channel management is handled efficiently by the software; all you have to do is sit back and relax.
Now that we know how a hotel channel manager facilitates hotels, let's see what are its other common features.
What are the features of a channel manager?
A channel manager comprises a wide range of basic as well as advanced features. All the features are designed to offer you an organized distribution process.
OTA connections: The number of OTA connections is one of the key features any channel manager has. At least, it should have a stable two-way connectivity with prevalent OTAs of the industry. Along with that, it should have connectivity with regional OTAs that are specific to your target audience as well.
One-stop dashboard to manage all your distribution channels: Regardless of the number of channels you are connected with, the OTA management system handles the corresponding operations effortlessly from one place without any lags.
Real-time inventory and rate distribution: No matter how many distribution channels your hotel is connected to, it keeps your availability and rates in sync. Few channel managers also enable hotels to fetch bookings from their Facebook fan page.
Rate updates in foreign currency: There are a few OTAs that operate in foreign currency only. Now, you have to convert your rates in foreign currency to be bookable on those OTAs. However, some advanced hotel channel managers have a provision of currency conversion on such OTAs. So, you can relax and be open to accept bookings from any international OTAs. This is how you can reach international markets as well.
Competitor rate analysis: While performing rate and inventory distribution, you have to consider how your competitors are doing that. The channel manager can bring your competitors’ rates right in the system with a hotel rate shopper tool. Sourcing from various booking sites, it gets the real-time rates of your competitors directly in the hotel distribution system. It helps you figure out the best pricing strategy for your property. So, you can adjust your room rates at any given time to make maximum profit.
Stop sale and updates: There are many instances, where you have to immediately stop the sale of inventories across the OTAs. There could be a sudden requirement of a group booking or some emergency maintenance work in rooms. During those times, you can use the stop-sale feature of the hotel channel manager software. You can stop the sale of inventories distributed across all the channels in a single click.
Yield management: One of the assured ways of driving more revenue is to sell the right room at the right rate using yield management. In a channel manager, you can study the market trends and your hotel’s past data to define different occupancy slabs and set different rates for each slab.
For example; during weekends, festivals and peak seasons, the hotel channel manager will automatically hike the room prices by 15% if the occupancy rate is more than 60%. Similarly, it will slash the prices during the low selling season.
Rate threshold: The channel manager allows you to set the maximum and minimum threshold value of your room rates. Accidental high or low rate updates may lead to losing revenue and bookings. But when the threshold is defined, it controls the minimum and maximum rates. And in case you cross that limit while updating rates, it notifies you to stop the update, and saves you from the possible revenue loss.
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Rollover updates: There is an allocation calendar in the hotel channel manager where you can plan your inventories until a certain time period (12, 18, or 24 months ). Even the OTAs have a similar calendar where the inventories are planned for 12, 18, or 24 months. To ensure that your property remains bookable at least up to the next 365 days from the current date, it performs a date rollover on a daily basis.
For example, Despite your property’s availability being displayed for a year on OTAs, you can configure your property’s inventory up to 2 years in channel manager software.
Meanwhile it fetches the pre-configured rates and inventories of the property, synchronizes it with the OTA calendar, and keeps the property available for the entire year.
OTA vouchers: Mostly after receiving bookings from the OTAs, you’d log-in to each OTA’s extranet individually to get the voucher details that the guests got. The channel manager can get you these OTA vouchers along with the booking notification.
Linked rate plans: It has a distinct feature to configure the master rate plans with the derived rate plans. As a result, any alterations in the master plan automatically update the rates in the derived rate plans as well.
OTA commission and billing management: A hotel is associated with various travel agents and travel sites and all of them have a different commission agreement with the property. Every time a guest confirms a booking at your property through these online travel agents, the channel manager automatically fetches the agreed commission rate with the OTA and generates the bill accordingly. It provides you with all the details of the particular OTA in a ready format, thereby reducing all the manual efforts.
Bulk updates in one-click: Channel manager generally supports the facility to perform bulk updates. You can update your inventory, rate, and rate plan in bulk at a single click.
Online review management: These days many channel managers enable hotels to manage their online reviews as well. You can get the online reviews from different channels, and respond to them right from the system.
Manage pay@hotel bookings: Most of the OTAs give their guests flexibility to pay at the hotel. But when such a booking is made, how to manage the process of deposit collection? How to make sure that these are confirmed bookings? Should you reserve a room or not?
A very few hotel channel managers have the feature of sending an online payment link to your Pay@Hotel guests, to collect booking deposits directly. In this way, you reserve a room only when you receive the deposit amount. In this way, you can get confirmed bookings in spite of offering this flexibility.Automatic credit card charge and verification: It even has a provision to check the CC details. If they’re not valid, it alerts 3 authorities:
- To the OTA through which the booking is made
- To the guest
- To the hotel
You can give a certain time limit to the guests to enter the valid details. If they don't update the details, the inventory is released. This feature also helps you in reducing last-minute no-shows and cancellations.
OTA promotions and messages: A channel manager also lets you manage the OTA promotions and messages on some leading OTAs like Booking.com and Airbnb.
How does a hotel channel manager improve your business?
Other than simplifying your hotel’s room distribution management, the system plays a significant role in your business growth. Let us see how:
Gets you more online bookings: Owing to the issues of double bookings or overbookings, hotels used to restrict themselves to limited channels. In this way, they may lose potential booking opportunities. Furthermore, you can list all your inventories and acquire bookings from as many channels as you want. Thus, you never lose any potential booking opportunity.
Increases your revenue per room: These days, the channel manager for hotels has the feature of configuring different rates as per the different occupancy levels (Yield Management). You can define different occupancy slabs and set different rates for each slab.
As occupancy increases, there is a percentage or amount increase in the basic room rates of a hotel. All you have to do is track the demand and supply. Modifying the rates as per the occupancy levels is taken care by the software itself. Thus, you can always drive more revenue per room regardless of any occupancy levels.Helps you analyse and optimize your performance: The channel manager provides you with a detailed summary of your business performance in one place. You can track the better-performing channels (that bring you maximum bookings and revenue), non-performing ones, total bookings, and many other important details. By reading these metrics, you can make changes in your OTA connections, track the actual earned revenue and make important decisions.
What is the role of a hotel channel manager?
Hotels are listed on multiple channels to sell their inventory and acquire bookings. A channel manager displays live rates and availability across all the channels at the same time. When a booking is received, it automatically updates your property's availability on the other sites.
Here’s a clear picture of what happens to a hotel business with and without channel manager:
| Without a channel manager | With a channel manager |
|---|---|
| You have to manually manage the inventory distribution and rate management across all the platforms to which your hotel is connected with. | Your inventory distribution and rate management get automated. |
| There are chances of delays and errors in manual updating inventories. | Your inventory distribution becomes faster and error-free. |
| It is challenging to manage availability and rates on multiple channels in the smallest fraction of time. | It gets simpler to manage your availability and rates on multiple channels simultaneously. |
| You may receive frequent overbookings. | Your overbookings decrease to a great extent. |
| You may not be able to maintain rate parity. | You can totally overcome the rate disparity issues. |
| Your inventory may remain unutilized. | Proper distribution helps you utilize 100% of your inventory. |
Channel manager’s OTA connectivity
Many OTAs such as Booking.com, Airbnb recognize some channel managers as their preferred partner, considering a wide range of parameters. Few of them are stable connectivity, zero downtime, and fewer errors.
Here are some recognitions an ideal channel manager should receive.
- Booking.com Premium Partner
- Preferred Airbnb Software Partner
- Agoda Innovative Software Partner
- Expedia Elite Partner
How to select the right channel manager for your property?
Every hotel has this ultimate question of how to select the right channel manager.
Certainly, there are 100s of channel management software available in the market. So, to select the right one, the most important parameters are: your requirements and your property type.
To begin with, start listing down your requirements. Then research about the vendors offering channel manager and select 4-5 that fit your requirement. Most of them offer free trials; so take one! Compare their features using the buyer’s guide. Based on the comparison, choose the one that suits you the best.
Questions to ask before choosing a channel manager
There are many channel managers in the market. Each and every channel manager has a set of features. However, there are certain functionalities and features that are imperative. So, before you select, here are some questions you should ask/consider:
- What is the distribution speed of the channel manager?
- Does it have a stable connection?
- What is the number of global and regional connections?
- Up to how many channels can it be connected?
- Does it have a connection with GDS and vacation rentals?
- Can the channel manager be integrated with the hotel software and booking engine?
- Is it user-friendly?
- Is there a free trial period?
- Do they have a subscription-based or a commission-based pricing model?
- What are the awards and recognition?
- Does the system let you monitor your competition on the connected channels and track their performance?
- Do they provide adequate support and training in your native language?
- Does it provide you with a wide range of reports to track the hotel business performance?
- Is the software PCI-DSS compliant?
- Can the product support multiple users?
If you already have one, then compare its features with the below buyer’s guide. You might discover that your current hotel distribution software lacks at some or the other point. So, give it a second thought!
Channel manager mobile app
Today you can perform most operations of routine life from your smartphone. Similarly, you can also take control over your online channel management (channel distribution) on the go.
This mobile app brings all activities related to inventory distribution at your fingertips.
- Monitor your hotel’s online sales.
- Change rates and update inventories from your mobile phone instantly with the app.
- Stop sale with just a single click.
and much more...
Thus, with a hotel channel manager app, entire inventory distribution management is brought down on your smartphone.
Channel manager software integrations
Promoting your hotel rooms on multiple online channels is a significant problem. However, an advanced channel manager can help you to solve this problem to a great extent. It allows you to sell all your rooms on all your connected booking sites at the same time.
It can integrate with your hotel property management system, revenue management system, review management system as well as your booking engine. There it gives you a centralized control system to manage your hotel’s operations.
Here’s a list of must-have integrations of hotel channel management software:
1. Channel manager integration with hotel PMS
The hotel PMS covers all the administration of your hotel, including reservation management, check-in/out, guest profiles management, housekeeping and maintenance.
The seamless integration of your hotel management software and channel manager streamlines your inventory and rate distribution to all corners. Any rate or inventory information you change in your hotel PMS will be recognised by the software and it will reflect the changes on all the third-party booking sites.
The same applies if information is being sent the other way. Without this integration, you’d need to input all the inventory and rate updates every time in the hotel software as well as the channel manager.
How will this two-way integration help you?
- Auto updates inventory and rates across multiple OTAs in real time
- Saves time and reduces errors
- Reflects real-time OTA reservations in PMS
- No more overbooking or double booking
2. Channel manager integration with online booking engine
As you know, an online booking engine makes it simple to acquire bookings straight from your website or social media pages. Since it is acquiring bookings, it becomes one of the channels along with OTAs.
When you have a two-way integration between your channel manager and online booking engine, you can update rates, availability and track performance easily.
How will this two-way integration help you?
- Get synchronized inventory and rates on online channels
- Attract more visitors to your website
- Access reports and analyse booking data
- Stay competitive with hotels and OTAs alike
- Create more ways to upsell or offer promotions
3. Channel manager integration with revenue management system
Hotel revenue management helps hotels to predict consumer demand and optimize their inventory and rates to make more profit.
The purpose of hotel revenue management is not selling a room today at a low price; rather it is to sell it tomorrow at a higher price. Integration of hotel revenue management system with a channel manager can increase your revenue significantly.
How will this two-way integration help you?
- Analyzes your competitors’ rates
- Recommends you the most effective pricing strategy to hotel’s RevPAR
- Saves your time and efforts
- Assists you to increase your revenue
4. Channel manager integration with reputation management software
Hotel reputation management software simplifies your hotel’s tasks of overseeing reviews, responding to them, and everything around it. It brings reviews from all the channels (viz. OTAs, Facebook, hotel booking engine, Google and others) in one place, so that you can respond to them easily.
93% of people use online reviews to book a hotel.
Since reviews have a big impact on a hotel's reputation, they can track, manage and respond to all the reviews (i.e negative or positive reviews) easily with this integration.
How will this two-way integration help you?
- Enhances brand value and increases revenue
- Minimises your efforts and saves time
- Improves guest experience
- Strengthens your online presence
Connectivity is vital. Moreover, the main reason why you would use technology is to make things easier. But if it is not integration-friendly, then you’re actually creating more work for yourself. So, choose the best channel manager to have the most integrations and strongest connectivity.
As you are well acquainted with everything about a channel manager, let's find out,
Is a channel manager worth the cost?
Well, DEFINITELY yes!
Your hotel’s distribution management is not a piece of cake. Channel management, if done manually (without technology) entails several challenges for hotels.
Therefore, in order to guarantee the smooth operation of the channel management process, the investment in the required technology is a must.
Just compare the channel manager subscription amount with the payroll of the personnel managing your inventory distribution. You will know that it is absolutely worth using it.
Besides, with manual channel management, you may face many issues like rate disparity, overbooking, or underbooking. And to solve these issues is another challenge in itself.
To have a better idea,
- Consider the time that personnel or executive needs to update the availability on every single channel that you’re connected with.
- Multiply that by the number of channels you use and the reservations you receive every month
- Compare the salaries that you need to pay with the cost of a channel manager’s monthly subscription.
Undoubtedly, the investment in a hotel channel management system is worth the cost!
How much does a channel manager cost?
As you know, technology like a channel manager is a must-have for hotels. But, before investing into technology, you would definitely consider its cost. Here’s brief information on how much it costs approximately.
Well, generally it is offered on a subscription(monthly/quarterly/yearly) basis or commission basis. Some may charge you for each channel you connect to.
The subscription model is widely accepted by hotels. This is because, with a certain amount of monthly fees, you can connect to multiple channels, and acquire as many bookings as you want.
On average the monthly fee of a channel manager is around US $50-70.
However, the pricing depends primarily on the number of your rooms and the features of the channel manager.
Who can use a channel manager?
Businesses that provide accommodation services and are listed on different travel sites (OTAs, meta search, etc) can use a channel manager to simplify their inventory distribution.
Reservation manager: Using a channel manager, the reservation personnel can easily retrieve information on each reservation, along with all necessary information like payment and guest details. Thus, It saves a lot of his time.
Revenue manager: Revenue managers use channel manager software to perform operations like forecasting, pricing, inventory management, marketing, and channel management.
General manager: General managers use a hotel distribution software to oversee their property’s performance data and analyze it. They use the data from the system to form business strategies and optimize the performance.
Hotel revenue management companies: On top of that, the hotel revenue management companies who manage the inventory distributions and strategize to grow revenue of different hotels use a channel management system.
In small sized hotels having extremely limited resources and operations, the front desk staff looks after the inventory distribution. In that case, they use a channel manager system to handle it.
Frequently asked questions
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Why is channel management important?
Channel management is important for any accommodation property to ensure that their presence remains optimized in the market. Additionally, it is also necessary to be bookable for the travelers, thus acquiring bookings and revenue to keep the business running. Proper channel management will benefit properties at a significant level.
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Can I get a demo of the channel manager?
Yes, of course. Various hotel tech providers give a free trial or a demo of the channel manager system. They let you try and evaluate the system; which makes it easier for you to decide on your purchase. You can enroll for a 14-day free trial of the eZee Centrix channel manager from here.
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Which is the best channel manager?
There’s no such thing as the best channel manager. It entirely depends on your property’s requirements and of course, budget. However, third-party review sites like Capterra and HotelTechReport regularly share a report of the top channel managers in the industry; where you can find one fit for your property.
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What are the other software used by hotels?
Apart from channel manager, there are a wide range of software or technology solutions used by hotels. A few of them are:
- Hotel Management System (Hotel PMS/ Hotel Software)
- Booking Engine
- Hotel Restaurant POS system
- Review Management Software
- Hotel Loyalty Program Software
- Feedback Management System
- Rate Shopper
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What is the difference between a channel manager and a PMS?
A channel manager manages the online distribution of rates and inventories of a hotel on the different channels. Whereas a PMS or hotel PMS is a comprehensive software that automates A-Z of a hotel or any other accommodation establishment. It is an all-in-one system that manages reservations, housekeeping, billing and payments, guest relationship, arrivals, departures and so on.
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What is the difference between a channel manager and a booking engine?
The booking engine is functionally very different. It is a system integrated on a hotel’s website, where your guest can check the real-time pricing and availability of the rooms. And thus book directly with you. Major difference is, the booking engine manages the inventory and rates on the website whereas the online hotel channel manager handles the inventory distribution on OTAs.
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Which different property types does a channel manager cater to?
Channel manager fits the best for small hotels, medium sized hotels as well as large hotels. It caters to all property types viz. hotels, hostels, resorts, guest houses, hotel chains, B&Bs, vacation rentals, and such likes.
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Wide range of FREE hotel resources to strengthen your business
Explore FREE hotel resourcesFurther reading
- 7 ultimate reasons why you should invest in a Hotel Channel Manager
- How to Select the Right OTAs for your Hotel? [Complete Guide]
- Top Hotel Revenue Management Strategies to Adopt
- Yield Management in Hotel Industry: Key Factor of Revenue Generation
- 10 Best Methods to Increase Your Hotel ADR
- Follow 7 effective techniques to increase your hotel RevPAR
- Hotel overbookings: Let us learn to tame them
- How to Perform Hotel Competition Analysis? [Step-by-step Guide]
- 5 reasons to have more OTA connections for your hotel
- How to Respond to Negative and Positive Hotel Reviews? [FREE Templates]
- How to Use Business Insights to Increase Your Hotel Revenue
- Hotel reviews and reputation management: Unveiling the whole ball of wax