What Does a Channel Manager Do for Your Hotel?

The internet has revolutionised the way people book their travel arrangements. Nowadays, many travellers prefer to book their accommodations through online travel agencies (OTAs) and other booking channels. This trend has made it essential for property managers to utilise OTAs and other booking channels to reach a wider audience and increase occupancy rates. However, managing multiple booking channels can be time-consuming and complicated, especially when the property manager has to keep track of availability, pricing, and other critical information across multiple platforms. This is where a hotel channel manager comes in handy. But, what is a channel manager?

A channel manager is a software tool that helps property managers to manage their inventory and rates across multiple channels, including OTAs, vacation rental sites, and other booking platforms.  By using a channel manager, property managers can update rates and availability in real-time. This ensures that their inventory is always up-to-date and that guests can book their properties seamlessly.

Understanding Online Travel Agencies (OTAs) and Other Booking Channels

OTAs typically partner with property owners or managers to list their accommodations on their platform. They then charge a commission fee for every booking made through their platform. This fee can range from around 10% to 25% of the total booking amount, depending on the OTA and the specific agreement with the property owner. For property owners, this can increase their visibility and reach a wider audience of travellers.

One of the main differences between OTAs and other booking channels is property owners’ level of control over their listings. When listing their properties on an OTA, owners must adhere to the platform’s guidelines and policies. This includes control over their pricing or availability, as the OTA’s algorithms may determine these.

In contrast, direct bookings occur when travellers book accommodations directly through the property owner or manager’s website or by contacting them directly. This allows owners to have more control over their listings, including pricing, availability, and guest communication. However, direct bookings may require more effort and resources from the property owner to maintain their own website and marketing efforts.

Managing Third-Party Websites With a Channel Manager

Third-party websites do not charge a commission fee for bookings made through their platform. Instead, they may charge a subscription fee or offer other marketing services for a fee. When it comes to managing bookings across multiple channels, a channel manager can be a property manager’s best friend. With a simple interface, property managers can update their rates and availability in real-time across all their listed channels. This saves property managers time and effort that would otherwise be spent managing each platform separately. Moreover, it reduces the risk of overbooking or under-booking by syncing updates automatically across all platforms.

While partnering with OTAs may increase a property’s visibility, it does come with a cost. The commission fee charged by OTAs ranges from 10% to 25%, making it a challenging proposition for smaller properties with limited margins. Additionally, OTAs are known to prioritise properties that offer the lowest rate to the guests, which can impact a property’s ability to maintain profitability.

On the other hand, properties that choose to focus on direct bookings can increase their profitability by bypassing commission fees altogether. However, this requires more resources and effort, as properties need to maintain their own website and marketing efforts. Furthermore, properties may struggle to compete with the sheer volume of listings found on OTAs, leading to reduced visibility and occupancy rates.

Third-party websites offer a middle ground for properties seeking a balance between visibility and profitability. These websites allow properties to list their accommodations without charging a commission fee but may require a subscription fee or other marketing services to drive traffic to their listings. Properties that choose this route must weigh the costs and benefits carefully before choosing which channels to list their properties on. Overall, a channel manager can ensure the seamless management of bookings across all channels, making it an essential tool for property managers looking to increase their occupancy rates.

Now, let’s take a closer look at the benefits and drawbacks of using OTAs for accomodation businesses:

Benefits

  • Increased visibility and reach: By listing their properties on popular OTAs, property owners can increase their visibility and reach a wider audience of potential guests.
  • Convenience: OTAs offer a convenient and easy way for travellers to compare prices and book accommodations in one place. This can help increase the likelihood of bookings for property owners.
  • Marketing and promotional support: Some OTAs offer marketing and promotional support to their partners, which can help increase bookings and exposure for their properties.

Drawbacks

  • Commission fees: As mentioned earlier, OTAs typically charge a commission fee for every booking made through their platform. This can eat into a property owner’s profits and reduce the overall revenue earned from a booking.
  • Limited control: As also mentioned earlier, property owners may have limited control over their listings, pricing, and guest communication on OTAs. This can be frustrating for owners who prefer to have more control over their properties.
  • Increased competition: With so many properties listed on OTAs, it can be challenging for property owners to stand out from the competition and attract bookings.

How Channel Managers Work with Online Travel Agencies (OTAs)

Managing bookings across multiple OTAs can be a daunting task for property managers, especially when it comes to maintaining accurate availability calendars and pricing information. This is where a channel manager comes in.

The channel manager works by connecting to the property manager’s own system, such as a property management system (PMS) or a central reservation system (CRS). It also communicates with the various OTAs that the property manager is listed on. The channel manager acts as a bridge between the two systems, ensuring that all booking information is synced across all platforms. This includes updating availability calendars, pricing information, and other relevant details such as room types and amenities.

One of the key benefits of using a channel manager is that it allows property managers to update availability calendars, pricing, and other information in real time. This means that as soon as a booking is made on one OTA, the availability calendar on all other OTAs is immediately updated. This helps to prevent double bookings and scheduling conflicts, which can be a major headache for property managers. It also ensures that pricing information is consistent across all platforms, which is important for maintaining the property’s reputation and avoiding negative reviews from customers.

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Benefits of Using a Channel Manager for Online Travel Agency Management

A channel manager allows travel agencies to manage their inventory and reservations across multiple channels from a single platform. Let’s get into the benefits of using a channel manager as a hotelier:

Save Time and Effort

One of the most significant benefits of using a channel manager is that it can save time and effort by streamlining online travel agency management tasks. With a channel manager, property managers can manage their reservations across multiple channels from a single platform.

In addition, a channel manager can automate many of the tedious tasks that come with managing multiple channels. For example, a channel manager can automatically update rates and availability on all channels. It can also provide real-time updates on inventory, eliminating the need for manual updates and reducing the risk of double bookings.

Improve Accuracy and Reduce Errors

Another significant benefit of using a channel manager is that it can improve accuracy and reduce errors in managing multiple booking channels at once. Manually managing multiple booking channels can be a time-consuming and error-prone process. A single mistake can result in overbooking or underbooking, which can be costly.

That’s where a channel manager comes in. By automating many of the tedious tasks that come with managing multiple booking channels, such as updating rates and availability, a channel manager can significantly reduce the risk of errors. Plus, with real-time updates, your inventory is always up-to-date, reducing the possibility of overbooking or underbooking. With a channel manager, you can trust that your online travel agency management is accurate and efficient.

Help Increase Revenue

A channel manager can help increase revenue by allowing property managers to reach a wider audience through multiple channels, including OTAs and vacation rental sites. With a channel manager, property managers can maximise their property’s exposure by listing on multiple channels without having to spend time and effort managing each platform separately.

Moreover, a channel manager can provide valuable insights on revenue and occupancy rates across all channels. This allows property managers to identify trends and adjust their pricing strategies accordingly to maximise their revenue.

Choosing the Right Channel Manager for Your Property Management Business

Choosing the right channel manager for your business is a crucial decision, as it can significantly impact your revenue, efficiency, and overall success. Let’s take a look at the key factors to consider when selecting a channel manager:

  • Pricing: One of the most important factors to consider when choosing a channel manager is the pricing model. Some channel managers charge a flat fee per month or per property, while others charge a commission on bookings. You need to evaluate your budget and choose a pricing model that works best for your business.
  • Features: The features offered by the channel manager is another crucial factor to consider. Look for a channel manager that offers features like automatic syncing of rates and availability, real-time updates, customisable reporting, and integration with property management software and/or accounting software.
  • Ease-of-use: A channel manager should be easy to use, with a simple and intuitive interface. This will help you save time and minimise errors in managing your listings across multiple channels.
  • Support: Good customer support is essential when it comes to choosing a channel manager. Make sure the provider offers responsive and reliable support via multiple channels, including phone, email, and chat.

Popular Options in the Market

There are several channel managers in the market today, each with its unique features and pricing models. Here are some of the most popular options:

  • Preno: Preno is a cloud-based property management system (PMS) designed specifically for small to medium-sized hotels and vacation rental properties. One of the key features of Preno is its channel manager, which allows property managers to manage their listings across multiple channels, including OTAs, vacation rental sites, and other booking platforms. The channel manager is fully integrated with Preno’s PMS, which means that updating rates, availability, and other critical information can be done in real-time across all platforms.
  • SiteMinder: SiteMinder is a cloud-based channel manager that helps hotels and vacation rental properties manage their inventory and rates across multiple channels. It offers real-time updates, automatic syncing of calendar availability, and detailed reporting and analytics to help property managers optimise their revenue.
  • Cloudbeds: Cloudbeds is an all-in-one hospitality management software that includes a channel manager, property management system (PMS), and booking engine. Its channel manager allows property managers to update rates and availability in real-time across multiple channels, including Airbnb, Booking.com, and Expedia.

Tips on Evaluating Providers

  • Research: Start by researching the different providers in the market and their offerings. Look for reviews and testimonials from other property managers to get an idea of the provider’s reputation and quality of service.
  • Test the product: Before signing up, request a demo or a trial period to test the product and see if it meets your requirements. Make sure you understand the product’s features and how they can benefit your business.
  • Consider scalability: Consider whether the provider can scale with your business as it grows. Look for a provider that offers flexible pricing plans and can accommodate your changing needs.
  • Budget: Different providers offer varying prices, and it’s crucial to choose a provider that fits your budget while meeting your needs. Some PMS providers charge a flat fee per month or per property, while others charge a commission on bookings.

Managing multiple booking channels can be challenging for property managers. However, using a channel manager can streamline this process and help property managers maximise their revenue potential by improving occupancy rates and reducing errors. When choosing a channel manager, it’s essential to consider factors such as pricing, features, ease of use, and customer support. By choosing the right platform for your business needs, you can save time, reduce errors, and increase your business’s profitability.

Investing in an effective channel manager is critical for success in property management, and it’s worth taking the time to evaluate different providers carefully. With the right platform in place, you can streamline your online travel agency management tasks and focus on providing excellent customer service and hospitality to your guests.

Enjoyed this read? Dive deeper into the world of channel management with our other related articles:

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About the author

Kendra, the Marketing Content Manager at Preno, brings her expertise in Marketing and Communications to help hoteliers stay ahead of the curve. With a deep passion for the industry, she is committed to providing valuable insights and strategies for success.

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