Channel Managers are essential for just about every hostel that sells its beds online across multiple websites. They are almost as important as Property Management Systems (PMS; read more about them here). However, not everyone needs to use a Channel Manager because many PMSs already have one built in. 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 where you sell your beds: Hostelworld, Hostelbookers, Booking.com, Expedia, HostelClub (maybe), Open Travel Exchange (maybe), and perhaps even your own website, among others. Each of these sites is considered a channel. When you log into the extranet of each one to update your rates and availability, you are distributing your inventory across the internet. That is why channel managers are crucial for your distribution.
Think of your channel manager as a master gateway between your inventory and the internet channels where your inventory can be distributed and kept current. Some hostels are adept at doing things the old school way, using no PMS and relying on spreadsheets, Google Docs, or even pen and paper to keep track of it all. Power to you guys; you've got operations and staff training down pat! Even so, a channel manager will change your life, so look into it!
[caption id="" align="alignright" width="305"] Myallocator's illustration on Channel Management. This image just about sums this entire article up.[/caption]
Here is a simple breakdown of how most channel managers work. Keep in mind there are many variations, but the end result remains the same. Plus, here are some tips for those old-school types:
First, they connect to your PMS and read your inventory, availability, and prices. Every time a price is changed or a reservation is made or changed over the phone, by email, or in person—along with changes to current guests' stays—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.
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 works flawlessly and quickly, within a matter of minutes.
When changes to the inventory or rates are recognized, the channel manager pushes those changes to all the channels.
When a reservation is made through a channel, it is 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 process occurs for reservation changes made through a channel. If you handle things manually, you will need to update your sheets when a reservation comes in, but not your other channels.
Also, note that there are additional features you can utilize, such as restrictions, length of stay pricing, etc. However, this could depend on your PMS, and it can get complicated. For hotels, the channel manager typically works with a central reservations system. Some even maintain PPC campaigns on metasearch sites like TripAdvisor, Trivago, Google Hotel Finder, and Kayak. But for everyone's sake, let's keep it simple.
Finally, you can sit back and relax. Focus on your guest experience rather than constantly updating your channels.
If you haven't set one up yet, what are you waiting for? Okay, just kidding! 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, it may not be worth the hassle. Can they easily integrate a new channel? What is the cost for you to add a new channel?
What direct booking tools do they work with?
How much time is there between updates?
For some reason, some PMSs will charge you to add a channel, even though all they have to do is change a small bit of code, as they’ve already built that channel integration for another customer and have used it thousands of times. There are costs involved here, but usually, the bulk has already been covered since the channel has been integrated before. Channel managers recognize this pain point and do not charge for each channel setup because, as mentioned, it has been done already. Additionally, they simplify room linking. This is where PMSs claim the workload lies, as they have to do it in the code, whereas through a channel manager, you can do it through a simple, innovative user interface. Since managing channels is their core product, they are the masters of distribution, where some channels even cover the costs of the integration builds so those costs 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. Their focus on distribution means they aren't busy working on anything else. This is particularly beneficial if you like to be edgy and distribute through new channels. They seem to integrate relatively quickly because they can read and react to the demands of many of their customers. Many even offer a simple "request a new channel" button or something similar, and before long, there it is.
For some reason, the selection of third-party channel managers for hostels is rather limited. Still, here are some popular third-party channel managers that hostels use (keep in mind you can also find channel managers from many PMS providers):
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 to see who your peers use and if they are happy with them. Often, the salesperson is great, but the support staff might not be as reliable. If you know of any other channel managers, please mention them in the comments, and I will add them to the list.