Channel Managers – Where Would You Be Without Them?
Imagine running a distribution strategy without a Channel Manager. It simply wouldn’t be possible.
They are the conduit through which most bookings now pass and a key sales and marketing tool for hotels, holiday parks and serviced apartment operators.
So, choosing the right Channel Manager is a crucial decision that every operator must make.
But it can be confusing – there are so many choices.
Peter Ferris, Head of Global Sales & Marketing at RMS, the world’s fastest-growing property management system, says the first step is for operators to decide on the type of Channel Manager they want.
He says operators essentially have two choices: a standalone product or the increasingly popular alternative of a Channel Manager that is already part of a property management system.
“Switching to a fully-integrated channel manager is the biggest trend we’re seeing,” says Ferris.
“It’s just so much more efficient – there’s no going backwards and forwards between different systems, which adds a layer of complexity and takes more time than it’s worth.”
He says speed is paramount and using a fully integrated channel manager also means rates and inventory can be updated in seconds not minutes.
“That can be the difference between taking or losing a booking - small things can have a big impact on the bottom line.”
Matthias Dybing, from Revmandis, a revenue management consultancy, says channel managers have rapidly evolved and are much more than simply a product pipeline to the Online Travel Agents.
Now channel managers are linking with most of the distribution chain including Global Distribution Systems, bed banks, wholesalers and airlines.
“Channel Managers have also become a data hub, providing price comparison tools allowing operators to see what their competitors are doing,” says Dybing.
Shannon Knapp, from SKNapp Consulting, says there’s no question channel managers are the primary distribution tool for revenue management professionals due to the increased range of connections and continued growth of online bookings.
That said, Knapp acknowledges the recent focus by operators to increase the proportion of direct bookings but suggests a balanced approach is best.
“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.”
She believes “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.