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Why a Channel Manager is a must have for a hotel

In our previous post Jan Hejny talked about the current trends and challenges of hospitality technology. He explained that these days a hotel needs a tech stack, not just a booking.com listing.  As part of your technology, Channel Managers are key. Here is why they are important.

Firstly, let’s clarify what exactly is a channel manager and how it works.

A channel manager reaches online distribution agents to sell hotel rooms to guests all around the planet. The only effective way to avoid overbooking is to use a well-performing channel manager. Which is basically software that helps you to distribute your rates, availability and synchronize bookings with the online sales channels. These are your hotel’s website’s booking engine, online travel agencies, such as Expedia or booking.com, wholesalers, Global Distribution Systems (such as Amadeus) and metasearch engines. (Who would have even thought that you need to be integrated with so many different online sales channels? Read more about metasearch here.)

Nowadays most of the channel manager systems (CMS) are cloud-based, very few are not. Being cloud-based has its benefits, read about it here.

Data shows that customers trust OTAs

Online Travel Agencies generate about 95% of all online bookings, so if you are not using any channel manager ou can easily lose bookings from these platforms or even your own booking engine not to mention end up being overbooked. The reason for this is that bookings are coming 24/7, but your staff possibly has limited working hours and limited capability to constantly update your availability. Systems work 24/7, most of them without a human touch.

It’s important that you have a fast, two-way integration with online sales channels, so once someone booked your last room in Expedia, your channel manager does not only receive the information but sends back the updated inventory to the other online sales channels. This way you’ll not end up with someone booking the same room 5 minutes later on Booking.com. If a CMS does not have real-time connectivity (meaning that data is exchanged within seconds) then you can still lose out or end up overbooked.

Some channel managers do not work with real-time connectivity, which means you will need to manually download your bookings from the OTAs, save them, and then upload the new information. The risk involved with this process is that potentially, during the time it takes you to perform the tasks, there might have been changes made (new bookings, cancellations, etc). Those changes will not be included in the data you downloaded, meaning that it is already outdated. It is a small risk, but potentially a very annoying one to consider.

So what to consider when purchasing a channel manager?

  • Your type and size (are you a small BnB or a 2000-person hotel?)
  • What are your most important online distribution channels?
  • Does the channel manager able to synchronize with your hotel’s booking engine?
  • Which property management system (PMS) are you using?  – This is especially important because there might not be an integration available.
  • What kind of technology does the channel manager is using? (Do they work in real-time connectivity?)

Sometimes overlooked but just as important factors:

  • Do they have support available, and is that support any good? (Both the location, ticketing system are important)
  • Is the CMS user-friendly and clear?
  • Is the channel manager evolving? Do they update their technology?
  • Reporting – a good CMS will allow you to observe which online platforms are selling and which are not. This will allow you to put more effort into the working ones and maybe drop the less efficient online platforms. Usually, you would get the best report if you connect your PMS with your CMS

Now about upselling…

Your guests would like to get the ultimate hotel experience, which possibly includes a comfortable stay, food options, such as room service or a restaurant and often a transfer. Of course, there are a lot of small extras you could offer. Your goal is to generate more revenue by keeping your guests as satisfied as they can be.

Channel managers coupled with an upsell app can do the deed for you.

If your channel manager works well you will receive accurate and up-to-date guest data. That means you can start communicating with your guests soon after their booking. Here at GuestJoy, we recommend reaching out to guests 3-4 days before arrival.

But what are the benefits of guest communication?
Guest communication can help with:

  1. Overbooking: sometimes people actually just forget to cancel their bookings, or as it happens often with non-EU citizens, they need a hotel booking to support their visa but are not actually planning to stay in the hotel. Once the welcoming pre-stay email goes out they often remember to cancel, therefore hoteliers can allocate the rooms better without (m)any overbooking and without spending valuable time and effort on contacting both guests and other hotels for free rooms.
  2. Upselling services: Maybe some of your guests know about what your spa or restaurant has to offer, but most of them are probably clueless. Make it easy for them! You can make some creative offers that can appeal to guests and they will no longer wonder what they’ll do at your premises in their free time. You can also connect with your Viator and Tourdesk.
  3. Renovations: Scared that your guests will downgrade you because of the noise and inconvenience? They will surely appreciate it if you warn them beforehand and offer a discounted drink or something small to compensate for their discomfort.
  4. Low or too few ratings: Guest communication apps provide a platform for your guests to communicate any issues they encounter during their stay. To curb low ratings, you can immediately solve these and make your guests happy. This feature also helps guests with special requests. Additionally, the post-stay message contains an easy rating where your guests can give you a high score without putting any effort into a long questionnaire.
  5. Masked emails: Guests who are coming from Booking, Expedia or other OTA, have masked emails. We can’t actually reach them without a channel manager that provides us a link between the real and the masked emails, therefore they become reachable.

The facilitated flow of real-time guest communication is crucial to giving your visitors a first-class experience. Guests feel welcomed and taken care of during their stay. Coupled with a CM a guest communication platform does the deed for you.

What else is there for you in more hotel technology?

Smart guest experiences allow you to have better guest data. With online check-in, there is significantly less manpower needed at the reception. Keeping data on offer orders will help you figure out which products or services are popular and which are unnecessarily kept around. You can predict and personalize what guests will need.

New technologies allow you to better manage and monitor your bookings, revenue, and ratings.

If you would like to get more knowledge about what would work for you, check out these links:
Tech for hotel revenue management
The 9 best hotel channel managers in 2019
The best hotel channel manager systems
Why you absolutely need a hotel management system
Hotel management systems compared

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