Channel Management introduction to Online Distribution


Claudiu Simina

February 17, 2015

The travel and hospitality industry is striving since years to define the concept of channel management and at the same time to sensitize (apartments, villas, holiday houses)owners, (hotel, resorts) directors and marketing managers, of the benefits that channel management is bringing to their day to day work. To quote a marketing owner from a medium size property ( 19 rooms) ‘I do not know how I managed before without a channel manager solution. It is a must have, for every property owner or distribution manager’.

Recently, I encountered an article wrote by Andrada Crangus, expert in the tourism industry. She has explained in an easy way the ….

She has tried to understand how modern technology enables hotels to optimize and thus to grow their business using distribution channels connected directly with the online consumers.

Indeed, channel management it is more of a science than an art , counting increasingly on technological solutions available on the market.

It is clear to everyone that the Internet today is the source of online bookings with the highest growth rate. When it seams that dozens or even hundreds of hotel booking websites emergence. I mentioned, just seems, because the big one is eating the middle and small fish. Expedia has bought Orbitz and Travelocity.

As hotels want to access the online world, to achieve a smooth online distribution, efforts are needed, along with financial, time and human resources that have a substantial cost. Rate plans change, differentiated pricing, continuous up-dating manually the availability and rates on each of these sites are part of the daily work. Wanting simplify the online distribution with a minimum cost and to maximize profit, was born the need for an aggregate product.

The technology moved fast enough and responded to this need by creating the channel manager” tool, which is an important component of revenue management (and thus the yield management, as a branch of the latter).

What is a channel manager?

Is a tool that comes to the aid of hotels, so they more easily manage their distribution and room rates available online on each channel separately. Online channels can be: on the one hand online booking websites: Booking, Agoda or Venere (websites targeting the global market or local markets), on the other partner travel agencies online.
The Channel Manager makes the product distribution (prices and room types allocations) automatically to the online booking websites and transmits information regarding the configurations of the property: some can take a large number of products (early booking, special offers, packages with or without meals etc. ), others are more rigid and limited to simple assumption packages (accommodation + breakfast, for example).From a technical standpoint, a Channel Manager is reduced to a web interface that can be easily understood and used by anyone without the need for technology trainings. There are no mandatory technical conditions for the hotel in order to implement this system, it makes sense to have knowledge of online distribution and even the existence of online sales strategies.

In addition, a channel management solution can provide: monitoring online competition with a revenue management software.

What does a Channel Manager does not do?
Does not contact with online booking sites for contracting or negotiating commissions, allowances, payments. These actions are solely the responsibility of the hotel.

A following article will be mentioning the differences between 3 Channel management solutions present in the market. Stay posted!


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