Channel Managers Lead The Distribution Revolution
Channel Managers have revolutionised the distribution of accommodation product over the last decade, rapidly becoming a key sales and marketing tool for hotels, holiday parks and serviced apartment operators.
In fact, many operators now generate most of their sales through their Channel Manager, which originally connected properties with Online Travel Agents but have punched through the original boundaries into Global Distribution Systems, bed banks, wholesalers and airlines.
“The evolution of channel mangers been dramatic and the benefits immense for operators, enabling them to seamlessly distribute their inventory,” says Peter Ferris, Head of Global Marketing at RMS, the world’s fastest-growing Property Management System.
But it wasn’t always like that.
“In the old days Revenue Managers had manually to manage rates and inventory on 10, 20 even 30 websites, logging in separately each time,” remembers Matthias Dybing, from Revmandis, a revenue management consultancy.
“With rates it was quite easy, inventory was more difficult because it was moving all the time.”
He says the process was initially laborious but manageable.
“However, as web and OTA bookings grew it became extremely time-consuming, complicated by the fact that bookings would also have to be manually entered into the Property Management System”.
This hurdle was overcome as technology improved, and Peter Ferris from RMS says the biggest current trend is for Property Management Systems to feature fully-integrated Channel Managers.
“It makes total sense because the PMS is effectively the engine running accommodation businesses,” he says, adding that integration means rates and inventory can be updated in seconds not minutes.
Dybing acknowledges the trend and says two-way connections between Channels Managers and accommodation operators are having a profound impact.
“Channel Mangers have also become a data hub, providing price comparison tools allowing operators to see what their competitors are doing.”
Shannon Knapp, from SKNapp Consulting, says Channel Managers have become the primary distribution tool for revenue managers as the volume of sales through OTAs continues to grow.
Knapp says while many properties feel the balance has now tipped too far and are focusing on strategies to boost direct booking through their website, they should never automatically assume that reservations through OTA and GDS are more expensive
“I don’t mean to get all Game of Thrones, but revenue managers and accommodation operators always have to remember that winter is coming,” says Knapp.
“Remember that the channels delivering today may not be the ones delivering in six months or a years’ time. For this reason, it’s very important to have a diverse content management strategy.
“I think it’s more important than ever to have a forensic accounting approach to the cost of distribution.
“The lazy approach to channel management is always thinking the cheapest channel is the best because that’s not always the case.
“Even with direct booking there are costs such as labour, loyalty points if applicable and the marketing associated with attracting that booking.”
Knapp also advises that the true value of each channel is not always reflected in the average per night rate.
Other factors to consider are average length of stay and ancillary spend on things such as food, beverage, movies and other services.
“It’s a matter of finding the perfect balance,” she says.
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The RMS Cloud in-built Channel Manager improves efﬁciency and reduces costs, with real-time distribution, connecting your business to all the world's major booking channels and without the need for a third party channel manager. You can learn more about RMS Channel Manager here.