According to the HotelTech Report, 86% of hoteliers consider revenue Management systems, property management systems, and channel managers critical to their everyday operations.

Furthermore, the hotel channel management market was valued at $687 million in 2022 and is expected to reach a market worth of $1,618.23 million by 2033, rising at an 8.1% CAGR from 2023 to 2033. This is primarily driven by the increase in revenue and streamlined operations that channel managers bring to a hotel.

But what is channel management?

Channel management is the primary function of employing a system to sell and manage your hotel rooms across many booking channels. It is a method for simplifying and speeding up selling hotel rooms and the auxiliary offers that go with them.

A profitable hospitality business relies on effective hotel distribution. Whether you run an independent hotel, bed and breakfast, vacation rental, or hostel, you must always keep your inventory in front of prospective guests. Travelers, after all, can’t book something they can’t find!

This is one of the many reasons hotel channel management is essential. Continue reading as we discuss more about the role and importance of channel management in hotel revenue management!

Who are the Channel Managers in Hotel Revenue Management?

Channel manager for hotels is an online management tool that lets you centralize and manage your diverse distribution channels from one location. These systems can be cloud-based or software-based, with real-time management capabilities.

All parties distributing guest rooms or other hotel services can obtain live access to critical information, such as prices and availability, using a distribution channel manager. It automates and updates your hotel’s inventory in real-time, transmitting reservation data between booking channels and the hotel’s management system.

This implies that the channel manager will update your inventory on all your connected channels, including Goibibo and Agoda, and communicate this information to your property management software (PMS) if a room is reserved, for instance, on MakeMyTrip.

This procedure ensures that your hotel’s inventory is constantly accurate and up to date, lowering your risk of multiple reservations and eliminating human error. You’ll also be able to manage updates and monitor performance from a single dashboard.

Role of Channel Managers in Hotel Revenue Management

A hotel channel management software program assists hotels in managing inventory and rates across many online channels. These include online travel agencies (OTAs), global distribution systems (GDS), metasearch, and hotel brand websites. It also aids in the consolidation of bookings from numerous web sources into a single location. A channel manager is a technology intermediary between the hotel and the OTAs.

Here are some other roles that channel management solutions play in hotel revenue management:

1. Increases Booking Rates

   Fewer overbookings entail fewer associated expenditures regarding a hotel’s image and paying to accommodate customers elsewhere. Furthermore, the most excellent hotel channel manager introduces your property to new guests.

   It is only possible to be on some platforms you want when managing rates and inventory management manually. There must be more time to investigate new online sales channels while also working rates and availability across other platforms.

   Additionally, a channel manager provides new options for exposure, which will enhance occupancy, provide you with greater price control, and aid in rate parity if your property is subject to such a policy.

2. Improves Operations

   A channel manager integrates internet booking channels with your PMS. Once you’ve configured and linked your account to your PMS, the channel manager solution will automatically display room availability and prices across multiple booking websites.

   It also syncs any alterations made on the PMS, such as new reservations, cancellations, or availability changes. This way, you can be confident that your hotel’s internet representation is always current and that you are appropriately undercutting your business.

3. Saves Time

   For revenue managers, updating the inventory and price of each room on each platform is not only time-consuming but also tiresome and prone to error.

   A channel manager provides a single dashboard from which you can change the availability and rates of multiple properties and room kinds. Rates can be changed with little effort. This also assures rate parity because you can intervene promptly if rates on separate OTAs diverge.

   Moreover, you can quickly change limits and inclusions while processing new, amended, and canceled reservations. You can also manage several properties from one platform.

4. Optimises Bookings

   Overbookings might hurt your business because you can only please all of your guests if you have enough hotel inventory. They will be dissatisfied with the hotel for failing to inform them of the non-availability of rooms. Simultaneously, uneven or incorrect allocation of hotel inventory can result in under-bookings.

   The simplest way to avoid overbookings and underbookings is to invest in a hotel channel manager. The channel manager will notify you when the inventory on all your platforms has been booked. This way, you can keep track of everything and learn about each channel’s performance. You can then allocate the inventory accordingly.

5. Speeds up Stop-Sale

   Even though hotel bookings follow a seasonal pattern, they can sometimes be highly unpredictable. For example, a party of ten people may appear out of nowhere and request ten rooms. Because the other inventory is dispersed to an OTA, only eight rooms are accessible for that group.

   So, what can you do to avoid such situations? A channel manager will breeze through these scenarios; you can click the ‘stop sale’ button on the platform, and all inventory on that platform will be frozen.

6. Analyzes Performance

   When your hotel’s inventory is distributed across several channels, the booking performance can vary. A channel manager system provides detailed information on the effectiveness of each track, allowing you to change your marketing strategy, negotiate commissions, and even terminate relationships.

   Moreover, you can strategically modify your business operations to fit channel success and reservation trends if you have such essential knowledge.

How do you use channel management for revenue management?

To get the most out of your channel management solutions, ensure that you:

• Integrate with an online booking system to manage your reservations directly alongside third-party bookings in real time.
• Connect to more than five different distribution channels.
• Use a business intelligence solution to augment your channel management data so that you can generate pace reports.
• Create and examine performance reports like channel mix.
• Connect to your property management system to centralize and automate your regular operations.

How to Choose Channel Management Solutions?

A channel manager can help you reach new guests whether you own a small, family-owned hotel or a substantial worldwide chain. Furthermore, channel managers provide various services that may be adjusted to your company’s needs, such as price optimization tools, multi-property management, and multilingual support.

But how do you ensure that you’re choosing the right channel manager for your solution? Here are some points that can help you out:

1. Integrations

   Check that your channel management has two-way integration and API relationships with all existing (and future!) hotel channels and technology. When a channel manager is directly connected to a PMS, your hotel website automatically updates your inventory.

2. Cost

   In most cases, the channel management solution will pay for itself in terms of results, but it is still critical to understand what you are getting into with your new software. Pricing models can differ. Some, like OTAs, may charge a fee per commission, while others may charge you for each channel you connect to.

   Another preferable strategy is to pay a fixed monthly price for system use. This way, the cost of your software won’t change, so you know exactly how much to spend each month. It also means that you can connect as many channels as you want and accept as many bookings as you want without incurring additional fees.

3. Customer Support

   Customer assistance is a must when using any software, but it is more critical when using channel management. Things can go wrong, and you want someone to resolve the issue immediately. So, when comparing channel managers, inquire about customer assistance.

4. Multi-Currency Support

   Quality channel managers enable you to take control of your currency policy and distribute it to OTAs in whichever currency you want – Booking.com in US dollars, Agoda in Euros, and your website in Rupees. Leading channel managers handle it all and automatically update rates and conversions numerous times daily, ensuring your accounting is unaffected.

5. Accessibility

   The channel manager should help you with your distribution strategy, existing online channels, and new channels. The objective is to have your inventory available to all audiences across popular OTAs, metasearch, and specialty OTAs. It’s even better to test new distribution methods quickly and easily using little time.

Related Read: GDS vs Channel Manager: Choosing the Best Distribution Tool

Wrapping Up

Since a channel manager displays accurate rates and availability across all of your channels simultaneously and immediately changes upon receiving reservations, you can approve bookings faster and nearly eliminate the possibility of multiple bookings. Furthermore, the data you may obtain from your channel manager can ensure that your rates and channel connections are always optimal.

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