What Is a Channel Manager?

01What Does a Channel Manager Do?

A hotel sells a room in many places at once: on its own website, on several online travel agencies, through tour operators and by phone. Without a channel manager you have to log in to each channel's panel separately to update rates and availability. That takes hours, and forgetting one channel leads to a double booking.

A channel manager does this update from one hub. You change a rate or allotment once and the change goes to all connected channels. New, changed and cancelled reservations from the channels also drop into the system without anyone entering them by hand.

The result is less manual work, fewer errors and consistent rates across channels. Consistency is also the foundation of trust in the guest's eyes.

02How Does a Channel Manager Work?

Behind a channel manager there is a two-way data flow. In one direction, rate, availability and rule information goes from the hotel to the channel; in the other, reservation information comes from the channel to the hotel. This flow runs over the API connections the channels provide.

1. Your rooms are mapped to the room and rate plans on the channels.
2. Rate, availability, minimum stay and stop-sell information is entered in the panel.
3. The system sends this information to the connected channels.
4. When a reservation comes in from a channel, the room is deducted from stock and availability on the other channels is updated.
5. The reservation is processed to the guest card and guest account like a normal booking.

03How Is Overbooking Prevented?

Overbooking is selling the same room for the same night to more than one guest. For a hotel it is a problem of both reputation and cost: you have to place the guest in another property, pay the price difference and face the negative review.

A channel manager reduces this risk with real-time stock updates. But to eliminate it completely, you also need to follow a few rules:

• Connect all channels to the same single stock pool; do not leave any channel outside.
• Enter phone and walk-in reservations into the system right away.
• Close rooms set aside for maintenance or groups with a block.
• For the last rooms, consider leaving a safety buffer on the channels.
• Keep connection error notifications on and check them daily.

04The Difference Between API Connection and iCal

Some platforms offer iCal calendar syncing instead of a two-way API. iCal shares booked days as a calendar file; it carries no rates or rules and transfers only booked/free information.

The weak point of iCal is the update interval. Because calendars are read at set intervals, the same date can be sold on two platforms between two syncs. For this reason an API connection should be preferred on channels with heavy sales, and iCal should be seen as a supporting route mostly for villa and apartment rental platforms.

05Booking.com Integration and Other Channels

The channels hotels connect most often are the big online travel agencies such as Booking.com, Expedia and Agoda. When setting up a Booking.com integration, room types and rate plans must be defined in the hotel's channel account and then mapped to them in the channel manager.

Every channel has a different commission structure, cancellation policy and guest profile. Seeing side by side how much each channel produces and how much commission it takes is the first step to building the right channel mix. We cover this topic separately in our What is an OTA article.

Aurora's hotel software offers a step-by-step setup wizard and a room mapping screen for Booking.com, Expedia and Agoda. Airbnb and Vrbo calendars are synced via iCal; for properties that use Channex, reservations coming from there are also pulled in automatically.

06Integrated with the PMS or Separate?

A channel manager can be used in two ways: as a module inside the hotel management system or as separate software. With separate software, the channel manager also has to talk to the PMS; that second connection means one more point of failure.

In an integrated setup, a reservation from a channel flows directly into the room calendar, the guest card and the invoice. The channel guest is recognized on their next stay and their spending is reflected correctly in reports. We explain the general logic of data flow between systems on our integration page.

Whichever route you choose, make sure the connection is built over the channels' official APIs and that there is a notification mechanism that warns you in case of errors.

07Channel Rates and Revenue Management

A channel manager is not only an availability tool; it is also the point where price strategy gets applied. Some hotels use the same rate on all channels, others pass the commission difference on to the channel rate. A system that allows a channel-specific rate provides this flexibility.

A channel-based rate calendar helps you see that when you change prices according to demand, the change reaches every channel correctly. We explained which indicators to base pricing decisions on in our hotel revenue management article.

08What to Look for When Choosing a Channel Manager

There are many channel managers on the market, and their demo screens look alike. The difference is how the system behaves in the busiest week of the season. Before deciding, question the points below one by one.

Connected Channel List

Ask whether the channels you sell on, or plan to sell on, are really connected. For any channel named on the list, also ask whether it is connected through a two-way API or only through calendar syncing.

Update Speed and Error Notification

What matters is how long it takes a rate or availability change to reach the channel and, when a push fails, who is warned and how. An update that fails silently means selling at the wrong price until someone notices.

Bulk Operations and Undo

At season opening, the prices of hundreds of nights are entered at once. Being able to apply a bulk rate over a date range, preview it before applying and undo a faulty operation with one click noticeably reduces the workload at the start of the season.

Reporting

Without reports on production, cancellation rate and commission by channel, you cannot decide how much effort each channel deserves. Reports that can compare against the previous period and last year make season planning easier.

09Balance Direct Sales with Channels

Channels provide visibility but take a commission on every reservation. In the long run a healthy hotel balances channel sales with direct bookings from its own website. This needs a fast site and a reliable booking engine; details are in our online reservation system article.

One leg of growing direct sales is advertising and search visibility. To show your hotel to the right guest on Google and social media you can get digital marketing support, and to discuss a setup that suits your property you can reach us through our contact page.