dilemma
666 days ago
 

Eleven tips when picking the best channel management technology for hotels

Channel management has become an important discipline for every hotelier – but it is now maturing.

Thousands of hotels around the world have used channel management tools on a daily basis for years. Step-by-step the hotel industry is starting to realize that it requires best of breed tools as part of a solid hotel revenue management operation.

For years we have seen a race to the bottom in the rapidly developing world of channel management software and new channel management systems seem to pop up like mushrooms.

There are at least 50 different providers active in the market space, and each system seems to come with a lower price. Many existing players in the field participated in a pricing war and nowadays there are some standalone channel management solutions pretty much available for free.

Whilst many of these tools may seem incredibly cheap, most of them are performing far below hotelier expectations. Using the tools is cumbersome, and logically hoteliers continue the search for better channel management tools.

But the hotel sector appears to be smartening up and is making a shift towards tools that offer simply better technology.

But selection is still a massive headache.

Nowadays a channel manager is a key component of hotel distribution and revenue management, and therefore it’s worth spending some time figuring out which is the best solution out there.

To help you find the best channel management tool out there, here is a list of types of functionality that only the best of breed solutions will be able to provide.

The list is quite large and has been divided in two sections. We’ll have a second selection coming out shortly, and combined we’ll cover off a total of 21 features.

Here we go:

1. Number of connected channels

Can a channel management tool manage your rates/ inventory across all of the channels you need to manage?

How many connected channels are there available in total?

Not that you are looking to connect all distribution channels that exist around the globe, however this number does give you good insight in the dedication to develop connections based on hotelier demand.

In addition this will allow you to see how many channels that you are already working with you may still have to manage separately.

2. Number of simultaneously manageable channels

How many channels can you manage simultaneously via the channel management tool? And how many room types can you manage simultaneously on each of these channels?

The more channels and the more room types you manage simultaneously, the more information will be transferred through a channel management system towards all kinds of extranets, each operating at a different speed.

The more information is transferred, the higher the pressure on performance and speed.

There is a limit. There is always a limit. Ask for it.

3. Ease of connecting a new channel

Three questions to keep in mind here:

  • How long does it approximately take to add a channel to the set of channels that you are managing?
  • What if you want to add a new channel that’s not in the list of connected channels yet? This is more complex as building a new connection between a channel management tool and a distributor takes more technological effort and time for programming.
  • On what basis does the channel management provider select channels that they will build connections to? Are there any requirements, for example a minimum number of hotels that requested the connection to be built?

4. Connection type

What type of connections does the channel management tool have with 3rd parties?

Please do realize that there are plenty of channels out there, and many of them are not capable of building XML links to send rates and inventory to channel management tools.

So are the connections XML-based? Or is it maybe a spider technology (also known as screen scraping) that sends and/ or retrieves data from extranets?

5. Push versus pull and push

Items to consider:

  • Can the channel management system pull data from extranets easily and quickly?
  • If it does not pull data, how can you get an overview of your inventory and rates distributed over all extranets?
  • Consider, that if you can’t see how many room you have left on your sales channels, how do you know whether you’re visible on the channel for sales? What if your top channel sold your rooms, and you forget that you need to replenish inventory?

If you use a push-only system, you will simply not be able to read what data you have loaded across different channels.

6. General Extranet functionalities

Can you manage the following information simultaneously and easily?

  • Rates
  • Inventory
  • Minimum Length of Stay (MLOS)
  • Stop sell (option that avoids cancelled rooms to be returned into inventory available for sales)
  • Closed to Departure/ Arrival

7. Advanced extranet functionality

What if there are other restrictions available at extranet level, specific to 1 extranet only, how is that displayed in the Channel Management tool? Ideally the rules of each individual extranet are built in. Examples of this type of restrictions would be:

  • Closed to Departure (COD)
  • Closed to Arrival
  • Minimum stay through
  • Per person supplement
  • Free sale
  • Breakfast option

8. Event management

Can you mark event dates in the system, so that people that use the system are notified about the importance of certain dates they’re managing?

9. Managing periods of time

Ask the following:

  • How far out can you manage your inventory? Can you manage inventory as far as you have loaded inventory? Can you load new inventory and new rates for extranets that allow this specifically?
  • How many days can you manage simultaneously? Is there a limit? 3 days? A week? A month? More? The more days are managed simultaneously, the bigger the challenge to maintain system stability.

There is a logic behind this stability challenge. First of all, the more dates you manage, the more data need to be sent out simultaneously. A quick calculation, covering rate changes for:

  • 25 days
  • 15 channels
  • 3 room types per channel
  • 2 rate plans per room type

That’s a quick total of 2,250 changes. That is a lot of information running through your internet connection to all these extranets.

Things get really tricky when passing the 30-day limit. Most extranets do not accept data for more than 1 month simultaneously. This obviously has a huge influence on system speed.

So beware when you’re told that you can manage an unlimited amount of days simultaneously through your channel manager.

10. Training and support

Is a systems training provided after you purchase the system? By whom? Can you get multiple trainings if required for your team?

And what kind of customer support is provided when you have technical challenges? How does support work? How can you report technical challenges? And how will you be notified about solutions? How fast?

11. User levels and access rights

Find out:

  • Can you have multiple user levels for different people or departments?
  • Can you for example create a user level that allows access to inventory management only? For example for the front office if they need to close sales on a last minute basis?

We’ll be back with more detailed insight in rate and inventory management via a channel management tool.

NB: More on channel management via Xotels.

NB2: Dilemma image via Shutterstock.

 
 
Patrick Landman

About the Writer :: Patrick Landman

Patrick Landman is a contributing Node to Tnooz and founder and CEO of Xotels. This hotel management group assists independent hotels with revenue management, online marketing and internet distribution strategies.

They offer outsourcing services, coaching, consulting and training. In his blog, Patrick challenges hoteliers to think out of the box and not to accept the established order.

Through a passionate drive for growth and improvement he brings creative tips, ideas and best practices to the table that can help hotels drive up their bottom line.

In previous roles he has helped to develop businesses like RateTiger and Hotels.com into industry leaders. 

 

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  1. Nakul Kapoor

    Yes, I would like to second Laiza.
    Patrick, let’s have a new version.

     
  2. Laiza Thomas

    Great Read! Many new things have come up since this article was written. Patrick may be time for new version of the same :)

     
    • Bnimbhal

      Hi Liaza,

      Can you plz provide and details about the new version, I am working on it, I also checked your website but not found any details about the technical part of a channel manage.

      Thanks

       
  3. TravelWired.com

    Great read. I enjoyed reading this. Many thanks Patrick!

     
  4. Zahir

    After reading this, its seems like one should take a good decision before buying a new Channel Manager,

    Can anyone suggest a good Channel Manager for a small business.

    Thanks in advance.

     
    • Ryan C Haynes

      SimpleDistribution channel manager may suit a small business not doing much online distribution at the moment. But channel managers are tailored towards the hotel size anyway. Patrick of Xotels uses Rate tiger for his clients, worth checking his blog to see some examples of hotels.

       
  5. Chris T

    whilst all questions are essential to determine what differs one solution from another, I would recommend focusing on 4 [Connection Type]: anyone developing clean and solid 2-ways XML strings surely must guarantee stability and strong foundations – and justify the investment . The market is abundant with spider-based options yet if the Major IDS’s themselves certify what technology guarantees maximum uptime and stability, I’d follow their advice.

     
  6. Adam Garlock

    Thank you for posting. Many valid points. I have gone through the process of implementing channel managers for several properties. One important point to consider as well is how extranet promotion management will be handled.

     
  7. Robert Gilmour

    This is a great article, many thanks

     
  8. marc

    Thanks for the article. Does somebody point out the most used channel managers?
    I checked rate tiger, rategain, ezyield all of them seem reliable, so it will depend on attention and pricing.

     
    • Ryan C Haynes -

      Good question – hard to say since some publish numbers, others don’t. the two largest have in the region of 6,000 hotel property customers each…so hardly a percentage of the entire global hotel market.

      For pricing, consider the functionality involved and whether it fits your hotel. How much do you want to do with your hotel sales, how much flexibility in the product. A Channel manager is not just a room and rate distributor but can be much more than that and begin automating distribution.

      Also – what’s involved in the price, is it just a product and technical support, do you get ongoing training for all staff, provided with consultancy and account management, does it speak your language etc etc

      Either way – head to WTM and they will all be there and you can ask directly.

       
    • Susan Spencer

      Excellent article and all very valid questions to ask your current or prospective channel manager or technology partner. As Patrick points out, the system needs to meet your specific needs and channel requirements. Price is a factor and should be reasonable enough to fit into your budgetary requirements so that your ROI on the product is feasible. Also ask for agreements that do not lock you in for 1 to 2 or more years. If the product is realible, you not be locked in without an out clause.

       
      • Ryan C Haynes -

        Certainly a non-fixed contract will give a hotelier flexibility, however may only provide basic technical support and initial training. If you are to be fixed into a longer term contract, make sure you know what you are getting – business growth advice? analysis of channels and production? support to increase bookings and not just the use of the product?

         
  9. Ryan C Haynes -

    It certainly seems to be in our products too :-)

    Oh and we have even more to come next week – how I can’t wait :-)

    Thanks for simplifying it for hoteliers Patrick!

     
  10. Simon Taylor

    Excellent piece Patrick, you sum up the state of the channel management software market perfectly. There is an abundance of choice (which does lead to deals being had) but you rightly say most products do not even begin to meet the hoteliers expectations. Needs change on a constant basis and therefore the technology you use has to also.

     
  11. Rishi Ranjan

    Hey,

    Nice write up indeed, after reading this i realized that all the functionality are there in our products.

    Great knowledge to share!

    Thanks,

    Rishi

     
 
 

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