Intro to Channel Managers

Channel Managers are essential to just about every hostel that sells its beds online over multiple websites. They are almost as important as the Property Management Systems (PMS, read more about them here), however not everyone should use one because many PMS’s have one built in already. However, if you do not use a PMS or want more control over your channels than your PMS offers, then a Channel Manager is a must have for you.

Consider all the websites you sell your beds on: Hostelworld, Hostelbookers, Booking.com, Expedia, HostelClub (maybe), Open Travel Exchange (maybe), perhaps even your own website, and more. Each of those sites is considered a channel. When you log into the extranet of each of those, and update your rates and availability, you are then distributing your inventories across the internet. That is why channel managers are crucial to your distribution. Think of your channel manager as a master gateway between your inventories and the internet channels in which those inventories can be distributed and kept current.

Now there are some hostels that are proficient in doing things old school with no PMS, using spreadsheets, GoogleDocs, or even a pen a paper to keep track of it all. Power to you guys. You got operations and staff training down tight! Even still, a channel manager will change your life, so look into it!

Here is a simple breakdown of how most of them work, just keep in mind there are many other variations but the end result is still the same. Plus there are some tips for those old school types:

1. First they connect you your PMS, and read your inventory/availability and prices. Every time a price is changed and/or a reservation is made or changed over the phone, email, or in person as well as current guests changing their stay, the updated prices and inventories are used to update the channel manager. If a hostel does not have a PMS, the channel manager will need to be updated manually by a staff member logging in and making those changes.
2. The channel manager will usually continually pull the new rates and availability from your PMS. Each has its own capabilities, but in most cases it is flawless and fast, in a manner of minutes.
3. When changes to the inventories or rates are recognized, the channel manager will then push those changes to all the channels.
4. When a reservation is made through a channel, it is then pulled from the channel, and pushed to the PMS if you use one so your inventory is updated. The deduction is then made across the other channels as well. The same thing happens for reservation changes that are done through a channel as well. If you do things manually, you will need to update your sheets when a reservation comes in, but not your other channels.
5. Also note, there are other features you can play with, such as restrictions, length of stay pricing, etc, but that could be dependent on your PMS, and it gets complicated. Now for hotels, the channel manager usually works with a central reservations system. Some even maintain  PPC campaigns on the metasearch sites like TripAdvisor, Trivago, Google Hotel Finder, and Kayak). But for everyone’s sake, let’s keep it simple.
6. Finally, you just sit back and relax. Focus on your guest experience rather than constantly updating your channels.

If you have not set one up already, what is wrong with you? Ok, just kidding, but here are some things to consider if you are looking into it:

• What channels do you need? If they do not work with the channels you use the most, perhaps it is not worth the hassle. Can they integrate to a new channel easier? What is the cost to you for a new channel?
• What direct booking tools do they work with?
• How much time is there between updates?

For some reason, some PMS’s will charge you to add a channel, even though all they have to do is change a small bit of code because they already built that channel integration for another customer of theirs and have used it for thousands of more.  There are costs involved here, but usually the bulk has already been covered as the channel has been integrated before. Channel managers realize this pain-point and do not charge per channel set up, because, as mentioned, it has been done already.

On top of that, they make room linking a simple task. This is where the PMSs say the workload lies, where they have to do it in the code, where as through a channel manager, you will do it though a simple, innovative user interface. Because managing channels is their core product, they are the masters of distribution, where some channels are even covering the costs of the integration builds, so they aren’t passed on to you. This is the main reason why, even if you use a PMS, you should always consider a third party channel manager.

That focus on distribution only means they aren’t busy working on anything else. This really helps if you like to be edgy, and distribute through new channels. They seem to integrate rather quick, because the are able to read and react to the demands of many of their customers. Many even have a simple “request a new channel” button or something like it, and sooner than later, there it comes.

For some reason, the third party channel manager selection for hostels is rather limited, either way, here are some of the popular third channel managers hostels use (just keep in mind you can also find channel managers from many of the PMS providers as well):

• Myallocator
• RateTiger
• Siteminder

Just like any other software as a service provider (SaaS), you should always evaluate the team behind them and the relationships they maintain with their customers. So ask around, so who your peers use, and if they are happy with them. Often the salesman is great, but the support staff could be quite the contrary.

If you know of any other channel managers, please mention them in the comments and I will add them to the list.