Raising Awareness: The Importance of Channel Management for Hotels

In today’s competitive hospitality sector, mastering the art of distribution is critical for hoteliers looking to maximize revenue and improve operational efficiency. The hotel channel manager plays an important role in this arena.

This software can help you boost your website’s online presence. It contributes to the growth of new markets by providing many connectivity channels. Furthermore, it eliminates the manual process, lowers the possibility of duplicate bookings, and allows you to accept more bookings than before.

Essentially, a hotel channel manager acts as a central hub, connecting the property to numerous Internet distribution channels and providing real-time information on room availability and rates. The main goal is to maximize revenue by effectively controlling various channels. Here’s a closer look into the importance of channel management in hotels!

How Does Channel Management Impact a Hotel’s Online Presence?

Going digital allows you to connect with travelers worldwide, which old techniques do not allow.

According to a report, more than half of travel reservations are made online. A channel manager improves your online presence and allows you to capitalize on the billboard effect: the ability to sell more rooms by partnering with new Online Travel Agencies (OTAs). The channel manager now automatically updates availability and rates, so hoteliers have little more work to do.

Simply put, a channel manager facilitates interactions with as many channel managers as feasible. This will not only attract locals, but also international visitors. This approach, hotel channel management, improves your website’s online presence.

It will also come as no surprise to property managers that when a hotel receives more reservations from OTAs, Global Distribution Systems (GDSs), and other B2B hotel distribution systems, the revenue generated far outweighs the expense of employing a channel manager.

But it’s not just about booking volume! Aside from the quantity of bookings, these distribution channels allow marketing teams to raise brand awareness and reach clients beyond their target demographic.

Brand awareness boosts the product’s value since customers trust it, and it allows the team to collect data about their target demographic, which helps them optimize campaigns and offer personalized suggestions to customers. Multiple channels allow the team to get input on different marketing initiatives and improve advertisements.

What Channels Are In The Context Of Hotel Management?

Hotel distribution channels are where accommodation providers can sell rooms to customers. Hotel distribution channels include OTAs such as Expedia and Booking.com, GDS, metasearch engines, and direct bookings made through hotel websites, phone, or email.

Similarly, a hotel channel manager is a technology solution that connects hotels to their online distribution channels (OTAs, GDS, wholesalers, and others), allowing them to be handled from a single location in a fraction of the time.

Using a channel manager automates the exchange of rates, availability, and reservations, which can often occur in near real-time. This enables hotels to make modifications once and have them cascade across all the channels they use, saving time, enhancing accuracy, and decreasing overbooking and rate parity difficulties.

It also allows you to broaden your distribution network by connecting you to online platforms you may have yet to consider. Finally, having a channel manager allows you to devote more time to your guests and give them the greatest possible experience.

Types Of Channels

Your hotel can utilize a variety of ways to reach its target demographic. Let’s look at a few of the most popular ones:

1. Direct Booking Channels

   Direct routes can include your website, phone number, or social media. Nowadays, online is preferred over offline. Thus, having a website geared for direct bookings is critical and includes a built-in hotel booking engine. Moreover, direct bookings are the most profitable because you don’t have to pay commissions to other parties.

   To prepare your website for direct bookings outside of a booking engine, you must have a mobile-responsive site because many bookings are made from mobile devices. Use search engine optimization (SEO) tactics to improve your site’s position on Google. The easier it is for customers to browse your site, the more likely you will be able to lock in a booking from your channels.

2. Metasearch Engine

   A metasearch engine processes a user’s query, and returns aggregated results from multiple data sources. This compiles everything for the user in one place. For example, if a traveler types “Hotel in Los Angeles” into Google, the search engine will pull data from other websites to provide the potential visitor with a list of possibilities. Signing up for Google Hotel Ads will help ensure that your hotel is discovered by travelers conducting generic search inquiries.

3. Online Travel Agencies

   There is no way around it: online travel companies are a pervasive and essential element of the hotel booking process. Priceline, Expedia, Booking.com, and Orbitz all have large audiences and are excellent ways to reach customers who would not otherwise be reached. You don’t have complete control over your hotel’s messaging on an OTA. Still, you can improve your listing with photographs, promote certain amenities, and offer appealing prices to OTA audiences. To keep costs down, focus on OTAs that your target audience uses and understands.

4. Global Distribution Systems

   GDS is an important medium for communicating with travel agents. This technology allows travel agencies to explore hotels, view rates, and check availability. Amadeus, Worldspan, Sabre, and Travelport are some of the best-known global distribution systems.

   Also, GDS can assist you in keeping your information updated with travel agent systems worldwide while delivering real-time pricing and availability information. To make the most of this channel, set your pricing at competitive levels with similar properties while also high enough to cover GDS fees.

5. Wholesalers

   Wholesalers are like well-connected insiders in the travel industry. They negotiate rates with your hotel, buy them in bulk, and sell them back to travel agencies or tour operators. Partnering with wholesalers allows your company to reach new market segments, draw a consistent flow of bookings from several channels, and increase repeat business.

6. Travel agents

   Travel agents are seasoned experts who create exceptional experiences for travelers. Collaborating with travel agents allows your hotel to utilize their broad networks and skills in building tailored vacation plans. This collaboration welcomes various travelers wanting customized service and professional recommendations.

7. Offline

   Since the internet is so widely used and convenient, offline channels are becoming less and less significant. However, these channels, such as phone, direct email, offline advertising, and walk-ins, should not be overlooked. Events and strategic collaborations with locals can deliver equal or greater ROI than investing in indirect channels.

How Does Channel Management Optimize Distribution Channels?

Channel managers speed up the distribution process by coordinating room availability and rates among OTAs, GDS, and the hotel’s official website. This guarantees that potential visitors receive correct and up-to-date information, lowering the likelihood of overbooking or underselling.

Here are a few more ways that channel managers optimize distribution channels:

• Time and Resource Optimization: Automation is an important aspect of channel managers, as it automates the distribution process and eliminates the need for human updates on each channel. This saves time and lowers the possibility of errors that can occur during human data entry.
• Enhanced Visibility: Using channel managers, hotels may increase their online visibility by reaching a larger audience across many channels. This greater visibility might result in more bookings and money.
• Rate Parity Management: Keeping room rates uniform across all channels is critical to avoiding rate differences, which can hurt a hotel’s reputation and relationships with OTAs. Channel managers play an important role in guaranteeing rate parity by displaying the same rates across all distribution channels.
• Data Insights: Channel managers provide useful insights to hoteliers via analytics, allowing them to evaluate performance, examine booking patterns, and make informed decisions to enhance their distribution strategy.

Benefits Of Effective Channel Management

A well-functioning channel manager makes it easier to manage room inventory across numerous booking systems. It automatically changes room availability, pricing, and restrictions across all linked channels, removing the need for manual updates and lowering the danger of overbooking or double-booking.

Here are some more advantages of having effective channel management:

1. Increase Visibility

   A good channel management solution connects you with multiple hotel OTA channels, allowing you to reach worldwide travelers. Registering your property in many channels boosts your internet presence and helps you reach more potential clients.

2. Smart Pricing

   An efficient channel manager will also provide excellent packages and specials that assist people save money while remaining focused on the hotel’s strong pricing. Smart Pricing allows you to configure discounts depending on geography, multiple nights, devices, advance purchases, or even a last-minute sale.

3. Automatic Updates

   Manually managing properties across several sites needs multiple daily updates for room bookings. It might lead to errors and inefficiencies when not updated in real time. Some common blunders include overbooking, detail errors, and missing opportunities.

4. Increase Commission-Free Direct Bookings

   Aside from reducing overbooking, a smart channel manager can help increase direct reservations, which is more beneficial for hotels. There is no doubt that OTAs are effective for acquiring new consumers, but repeat customers are the most profitable.

   A channel manager can raise awareness of a resort, but it is ultimately up to the property to encourage direct bookings. Channel management allows properties to grow their visibility in numerous markets while allowing clients to book directly through the brand’s website.

5. Easy and Manageable

   The channel manager software should be simple and manageable. Hotel sales managers, like hotel channel manager software, must always be mobile. The booking engine channel manager software must be cloud-based and mobile-friendly to track frequent rate changes and overbookings or underbookings.

Common Challenges In Hotel Channel Management

Effective channel management frequently involves a unique set of obstacles. Some of the most typical difficulties firms face are as follows:

• Inconsistent Brand Messaging: Keeping a consistent brand image and messaging across all partners can take time and effort. Providing partners with clear branding rules and marketing collateral helps to ensure that your brand and solution are represented consistently.
• Channel Conflict: Conflicts can occur when partners compete for the same customers or feel unfair treatment. To address channel conflict, create defined norms of participation and dispute resolution procedures to improve relationship expectations.
• Performance Management: Evaluating and identifying underperforming partners can be time-consuming and complicated. Implementing defined KPIs and leveraging technology can simplify partner performance management.
• Underexposure to booking channels: OTAs continue to dominate online sales. At the same time, the distribution market is becoming increasingly congested with metasearch entries such as TripAdvisor and Google. Even so, hotels must prioritize direct bookings through their website while remaining mindful of offline channels such as phone and walk-in and the still-relevant GDS network. A strong and consistent internet presence and an understanding of genuine distribution costs are essential.
• Optimization of distribution is not uniform: With the vast number of interwoven interactions between guests, hotels, and travel sites, as well as the diversity of travelers, a blanket method of room distribution cannot be expected to be effective. What works on one channel or region may not function in another. Also, the type of trip taken is frequently the spark for the channel a traveler uses. This makes it difficult for hotels to establish which technique is more successful or cost-effective for room distribution.

Best Practices For Hotel Channel Management

Travel bookings are increasingly made on smartphones and tablets, so having a mobile-friendly website will improve your ability to capture direct business. Along with ensuring that your website loads quickly and is simple to use, include a mobile-optimized booking engine to give a smooth, safe purchasing experience.

Here are a few more best practices for channel management that you can employ in your hotel:

1. Identify Your Target Audience

   Certain demographics and types of clients are more likely to find your brand appealing, while others may not. Your distribution plan should consider your target audience to ensure maximum visibility. Some methods, such as phone reservations, will predominantly appeal to an older demographic, but others, such as direct social media bookings, may appeal to a younger audience.

2. Optimize Your Business Mix

   Understanding the various traveler categories that book at your resort lets you diversify your business mix and optimize your distribution strategy. In most circumstances, travelers can be divided into two categories:

   • Wholesalers usually influence lower-yield segments. These guests will book your rooms early but tend to book them throughout the year.
   • OTAs frequently generate higher-yield segments, including your hotel booking engine. These guests may book their lodgings just before arrival and frequently pay greater room rates due to their last-minute approach.

3. Appeal to International Travelers

   Broadcasting your hotel to a global audience may be overwhelming, but using the industry’s top booking sites is simple. Booking.com, Expedia, agoda.com, and HotelBeds are among foreign travelers’ most popular booking websites.

   Once you’ve reached these international travelers via the leading booking sites, you must make it simple for them to confirm their reservations and process their payments. Chinese travelers, for example, are a major consumer segment in the travel business, and they prioritize secure payment alternatives over most other considerations.

4. Establish Appropriate Tracking Strategies

   Understand where your guests are coming from and how much it costs to obtain them. You should also investigate what factors affect travelers the most when buying a room at your hotel to see how you can optimize your channels.

   You may accomplish this quickly if you have a channel manager or booking engine that generates reliable reports. Over time, you will learn how to balance the channels that bring in most of your clients with your most cost-effective channels. Hopefully, they’re the same person.

Conclusion

Hotel channel managers have developed as a valuable tool for hotels and lodging providers looking to streamline their distribution methods, increase income, and reach a larger audience. As the hospitality industry grows more competitive and technologically advanced, deploying a channel manager tailored to your property’s requirements can dramatically increase your online visibility and operational efficiency.

Hoteliers may successfully negotiate the ever-changing world of online distribution by carefully studying and selecting the correct channel manager, investing in staff training, and continually reviewing performance.

Frequently Asked Questions

Why is effective channel management important for hotels?

Effective channel management is crucial for hotels to widen their distribution reach across various booking platforms and direct channels. It enables seamless inventory and rate management across channels to maximize occupancy and revenues. With automated and centralized control, hotels can optimize online visibility and availability for in-demand rooms.

How can hotels overcome overbooking and double-booking issues with channel management?

Robust channel managers integrate with the hotel’s property management system, providing a unified two-way flow of reservation data between booking channels and the hotel. This enables accurate inventory status syncing across channels, eliminating the risk of double bookings or overbooking.

What role does technology play in channel management for hotels?

Hotel channel technology enables automated rate distribution, real-time rate, and inventory updates to reduce disparities and instant reservations across channels through a hub connection, minimizing manual efforts. It provides actionable data analytics on channel performance and reservation metrics for strategy optimization.

What is distribution channel management in hotel operations?

Hotel distribution channel management refers to the strategies and technologies focused on optimizing room inventory and rate visibility across third-party online travel agencies, metasearch channels, global distribution systems, and a hotel’s website and offline channels. Maximizing occupancy and revenues through widened distribution at optimized costs is the goal.