Hotel Channel Manager System

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Hotel Channel Manager System - Complete Guide

30/08/2024

Harman

In this day and age of the internet, online presence is paramount for a hotel business. This presence can help a hotel reach a wider audience for marketing campaigns as well as bookings and reservations.

A hotel channel manager streamlines the booking and reservation process for a hotel, prevents overbooking, and significantly reduces human errors. Let’s learn about this hotel channel management solution in depth in this blog.

Hoteliers, please note that a channel manager is a boon in the contemporary, digitally-driven hospitality industry.

What is a Hotel Channel Manager?

A channel manager is a hotel technology solution/software that displays, manages, and updates different booking channels simultaneously, through a single dashboard.

It lists hotel room inventory on multiple channels and automatically updates availability, rates, and other booking information in real-time.

With more and more travelers making reservations using online channels, the hotel channel management solution streamlines revenue and distribution management for a hotel, reducing the need for human resources and costs whilst boosting hotel occupancy and profits.

Diversifying Hotel Distribution: Exploring Multiple Channels

Online booking channels such as OTAs, retail travel agents, metasearch engines like Yahoo and Google, global distribution systems (GDS), wholesalers, or direct channels (hotel website and social media pages) are managed by a hotel channel management technology.

Metasearch engines

Metasearch engine platforms like Google hotel ads and TripAdvisor allow travelers to compare different pricing options and book accommodation directly from the hotel website or through third-party channels. With the help of metasearch advertising, hotels can increase their visibility as well as attract direct bookings while competing with other distribution channels.

Global distribution system

GDS platforms are responsible for connecting hotels to travel agents and corporate booking systems operators like Amadeus, Sabre, and Travelport. Through these platforms, hotels can promote their inventory to a wide range of travel professionals facilitating bookings for business travelers and tour operators.

Online travel agencies

Expedia, Booking.com, and Airbnb are some of the OTA's examples, which provide online facilities for hotels to list their rooms and reach a bigger audience. Online travel agencies usually charge commissions for bookings made through their platforms, but in return, hotels get access to a greater pool of travelers.

Wholesalers

Hotels work with wholesalers to clear their rooms in bulk while possibly aiming at a particular market, such as leisure travelers or groups of customers. That partnership can be very beneficial in filling the empty rooms and finding guests, who like to buy a package deal.

This technology allows a hotel to successfully manage revenue as well as distribution strategies to make maximum profit.

Why does a Hotel need a Channel Manager?

In the digital era, online research and bookings have become a common phenomenon. Thus, hotels have an existence on multiple booking platforms and online channel managers to capitalize on this trend.

The global hotel channel management market was valued at US$ 687 million in 2022 as per the Future Markets Insight report. Furthermore, the market is expected to grow with a CAGR of 7.8% between 2023-28 and reach US$ 1074.9 million by 2028.

To manage these multiple online channels smoothly, hotels need to have a centralized, single interface automation solution as manual management can cost huge amounts of resources as well as time. And not to forget, the manual way of doing things also brings the risk of errors and mistakes with it.

This is where a channel manager comes in handy. It facilitates seamless hotel channel management in a busy hospitality market; allowing hotels to prevent overbooking or double booking and eliminating human errors that can cost a hotel its potential as well as current guests.

By automatically updating inventory, room rates, and other specifics across all the channels, in real-time, a hotel channel ensures that the channel visitor views all the up-to-date information and makes an informed decision.

For example, if a guest has booked a room through say, either Booking.com (Improve Booking.com Ranking) or your hotel website, the same would be updated across all booking platforms. That particular room would be closed for sale on all the other channels, and price revisions would happen automatically. All the other potential guests would view the updated inventory and rates.

This automation also happens at the time when bulk changes are made to hotel inventory. And this all is done without any human intervention. Had this been done manually in a fast-paced hospitality industry, errors were bound to be made due to excessive workload and time constraints or pressure.

A channel manager, on the other hand, eliminates the room for any ambiguity and hence, future conflicts or disappointments.

Benefits of using a Hotel Channel Manager

The importance of a channel manager could not be emphasized enough. From streamlining the hotel booking management to optimizing revenue and distribution strategies to creating a smooth and positive booking environment for guests, a hotel channel management solution does it all.

Some of the key benefits of a channel manager for Hotels are:

1. Smooth hotel booking and reservation management

In a hotel, the staff is, more often than not, on its toes. This is because hotel management involves multiple complex as well as detailed functional as well as non-functional tasks.

In such a vibrant environment, a solution such as a hotel manager simplifies booking management across multiple platforms for a hotelier.

Manually updating hotel inventory and rates in real-time requires dedicated resources and could lead to over or under-booking and ruin a guest experience at one of the first guest touchpoints; tainting a hotel’s reputation.

2. Increased bookings

Since an increased number of travelers are leveraging the internet to plan and book their vacations or trips, online channel managers that are managed well put a hotel in front of these travelers, increasing its visibility and chances to get booked.

The ease of connecting to new and multiple booking platforms, metasearch engines, etc., makes pushing a hotel inventory, a low time and resource investment and a lucrative task. Online channels allow properties to access global markets and diverse travel segments which were restricted with the manual channels and management.

3. Optimum distribution

Every hotel needs to have its mix of booking channels and share of allocated inventory according to its target audience and objectives. This is important because every OTA or platform has its own costs and commission policies.

The hotel channel system strategizes a diverse mix of high-performing channels for a hotel and allocates inventory as per its objectives.

For example, a hotel can make a more prominent presence on niche OTAs that sell to a particular travel segment similar to the hotel and reduce visibility from the more general OTAs for more optimized channel distribution.

This can be done by carefully analyzing the data-driven insights for the most profitable sales channels, most lucrative room types, etc., gathered through a hotel channel.

4. Revenue maximization

Through channel managers, hotels can find new ways to sell the existing inventory.

Leveraging pooled inventory (a model that aggregates inventory into a single place to allow all the bookings to be pulled from one “pool” based on real-time availability updates to/from the property management system or PMS), discounted rates, or non-refundable rates and upsell options, a hotel can increase revenue by implementing optimal pricing strategies.

Additionally, hotels tend to sell rooms using the shared inventory technique wherein the same room is sold or listed under multiple room types. With traditional or manual channel managers, hotels run the risk of selling the same room twice.

However, with the modern channel managers, listing shared inventory is a safe bet. The system ensures that any linked room will not get double-booked or sold twice.

Real-time updates further enhance the search performance on OTAs. These booking platforms rank hotels higher if the latter has real-time updates of the Average Rate Index (ARI). This improved visibility and higher search rankings lead to better ROI for hotels.

5. Costs and time savings

All rooms are listed, and availability is updated across each channel simultaneously without any human intervention using a pooled inventory model. This saves hotels the time to log into each channel’s extranet and update ARI multiple times in a day.

Additionally, the costs paid to a resource to do this manually also get saved with an automated ots channel manager. That time cost correlates closely to the financial cost of paying someone on staff to manage distribution manually.

How does a channel manager work for hotels?

A channel manager updates the property’s distribution data across all the connected channels, in real-time. Every time a hotel updates its central calendar or modifies its nightly rates in the channel management dashboard or any of the integrated systems such as PMS, central reservation system (CRS), etc., the same gets automatically updated across all the connected booking platforms.

Additionally, when a new booking is received through an OTA, the same will be reflected on the hotel channel, and the connected systems and the room will be no longer available on any of the distribution channels. Cancellations work the same way.

A channel manager shares reservation data on a two-way basis. Using two-way sync via XML, it connects each channel’s extranet and pushes ARI updates to the particular channel as well as imports bookings/cancellations into the hotel's Channel Manager, PMS, and/or CRS dashboard.

With all the updated reservations/cancellations data visible on a single dashboard, in real-time, the risk of overbooking or double booking is eliminated and rates are charged and updated correctly. Furthermore, through the pooled inventory model, all inventory is put in a single place which prevents a room from being booked more than once on any of the booking channels/platforms. Therefore, the primary functions carried out by a channel management system in the hospitality industry include:

A channel manager allocates hotel inventory across multiple high-performing channels as per the hotel's objectives.
A hotel channel management solution maps room types according to each channel’s formatting requirements. This eliminates the need for manual reconciliation and prevents duplications.
A channel manager directly connects with the PMS and supplies all the relevant, and updated reservations/cancelations data in real-time for smooth property management.

Also read: Difference Between Hotel PMS and Channel Manager

The hotel channel management should thus have the following integrations with other hotel technology systems:

Property Management System: As you know and we have mentioned above, this is the most crucial integration. The real-time updates offered by this integration eliminate the need for manual entries and thus, the room for errors is reduced significantly Property management system gets centralized to offer maximum control, flexibility, and speed.

Revenue management systems (RMS) : This integration facilitates smooth as well as profitable revenue management. The channel manager and revenue management system should be integrated as the latter studies market demand, competitor's rates, and other elements instrumental for pricing strategy and makes suggestions.

Hoteliers can maximize income by linking their Revenue Management System (RMS) with their channel management system, enabling them to leverage this data across all channels.

Central Reservation System (CRS) : This integration facilitates smooth operations and a bird's view of the property as the channel manager shares data with the central reservation system which then links with other hotel technology systems.

Additionally, the integration of the channel manager software with the customer relationship management (CRM) system or a review management system can improve the user experience and thus, benefit the hotel.

This integration could enable individualized interactions with visitors/potential guests, effective review management, as well as targeted marketing efforts.

Ensure any provider that you are considering has the integrations your hotel requires to set your hotel staff up for success.

What makes a Good Hotel Channel Management Software?

Choosing a channel manager for hotels requires careful consideration to maximize the software's potential and optimize the invested resources.

The following are crucial considerations while choosing the most suitable hotel channel management solution:

PMS compatibility:

A channel manager with a two-way synchronization with the hotel PMS is an ideal choice. This eliminates the need to manually add reservation details in the hotel’s internal systems; bookings get automatically managed. Choose a channel manager that works well with your property size and booking frequency and syncs best with your PMS.

The modern channel managers offer API connections with a 2-way synchronization. It’s all cloud-based where updates are made in real-time, and millions of bookings are managed easily.

In case, you already have a PMS, the provider will be able to suggest or recommend some of the most compatible channel managers.

Also read: Importance of Property Management System in Hotel Industry

2. Channel partners: A hotel must go for a channel manager that connects to suitable booking platforms and global markets based on the hotel’s distribution strategy, targeted segments, and existing channels.

A hotel should check out big brands and niche OTAs, meta-search engine websites, and GDS. Lastly, a hotel should also check if there are additional costs or commissions for connecting with more channels.

3. Centralized content management: This is another important feature that a good hotel channel should offer. A hotel should be able to update property pictures, amenities, points of interest as well as promotional offers, all centrally in one place. This feature helps a hotel keep the information updated, at all times across all the channels.

4. Automatic Updates: Keeping your internal systems updated is crucial for maintaining security and providing guests with a safe platform for booking and payments. It's recommended to update the hotel channel management software regularly, ideally on a quarterly basis, to ensure security and access to advanced features.

5. Pooled inventory: Centralized inventory management is essential for effective channel management and represents a key feature that many hotel management solutions provide. Opting for a system with pooled inventory not only saves time but also reduces manual errors, making it a valuable choice for hotels.

6. Booking engine integration: Integrating the channel management system with the hotel booking engine is vital for maintaining synchronization across all hospitality management platforms.

7. Analytics and reporting: In the competitive hospitality industry, hotels need access to detailed insights on booking volumes, revenue, and competitive analysis. To achieve this, they rely on management software that provides robust analytics and reporting capabilities. Leveraging data-driven insights allows hotels to optimize their revenue and distribution strategies effectively.

8. Maintenance and support: A good channel manager software should always come with maintenance and support services. Evaluate the support level offered as well as the costs associated and then choose the most suitable option.

Which is the Best Hotel Channel Manager Software?

Selecting the appropriate provider for your revenue and distribution strategies is critical. Additionally, ensuring the right integrations are in place is essential. Without these integrations, even the most suitable product may not yield results and could instead introduce unnecessary complexities and costs.

Thus, begin by identifying and defining your hotel details:

The number of rooms and types
Number of channels you would want to connect to
Target audience
Other hotel technology systems
The budget allocated to the channel manager solution

Now, identify your unique needs as well as prepare some more detailed strategies:

Ideal channel mix
Profile optimization
Dynamic pricing and its frequency
Promotions you wish to run
Additional/extras offered on direct channels
Competitive analysis and strategies

Post identifying and planning these pointers, a hotel must consider the following while choosing the most suitable provider:

Pricing models: Evaluate the pricing models offered by the potential vendor. Does it work on a pre-booking commission basis, as per a lock-in contract, or a subscription model basis? Does it charge any setup fee? All of this needs to be asked and considered before making a decision. This is because commission or channel-based pricing might cost more and get complicated.

Also, always look for or ask for free trials or free use of demo accounts before making the big investment.

Onboarding and running support: The time taken to start, the guidance and support provided for the same as well as the ongoing support services need to be considered.

Additionally, with a new system, user questions and issues are expected to come. These issues might need troubleshooting and thus, training and constant support are non-negotiable.

Industry standing: Some big OTAs offer and run programs for industry-recognized software partners. Additionally, each year they give recognition to Preferred Partnerships. Therefore, consider these accolades before choosing a partner.
Safety and security compliance: Ensuring data security is essential for any hospitality management solution, given the sensitive nature of guest data and hotel information it handles. Inquire about compliance with standards such as PCI DSS, SCA, Guest data compliance, and GDPR to safeguard your data effectively.
Reviews and feedback: Check for reviews, client testimonials, and feedback for the software company on websites such as Capterra, Software Advice, and Hotel Tech Report.

Tips for Maximizing ROI with a Channel Manager Software

To make sure that your hotel stands out from the crowd, here are some tips to maximize the performance of channel distribution for hotels:-

Maximize your content reach - Make full use of the capabilities of the channel manager software by ensuring that the content you publish reaches the widest range of audiences. This is done by optimizing your listings with good pictures, catchy descriptions, and accurate pricing across all channels.
Dynamic Pricing Strategies - Utilize the dynamic pricing tools of the channel manager software to determine rates that are in demand, seasonality, and competitor pricing. real-time time pricing adjustments can maximize your hotel revenue and occupancy rates.
Monitor performance metrics - Take advantage of the reporting and analysis tools that are built into your channel manager software to measure essential metrics like booking volume, revenue generated, and occupancy rates. The use of such data could help display the trends, give insights, into how hotels can improve their offerings, and guide you in making wise investments to obtain the maximum ROI.
Integrate with other systems - Make sure that your channel manager software is smoothly integrated with other systems like property management systems (PMS), revenue management tools, and customer relationship management tools (CRM). This promotes. better data sharing between systems and improves synchronization, leading to smoother operations and guest experience.

These tips will help you to determine using channel manager software to its full capacity and invest in the hospitality industry with great ROI.

Conclusion

This was the full guide for a hotel channel manager. A hotel must first identify and define its structure and needs. Afterwards, it should look for a partner that offers the right and required integrations, training, and support as well as safety and security for the software.

The right software partner is important for the adoption of such crucial hotel technology software. Only reputed industry names such as BOTSHOT should be trusted with technology this instrumental in a hotel’s success.