What is the best channel management solution for your small hotel?

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In this day and age, all small accommodation providers must find a way to reach more guests through online booking channels.

The problem with this is how to manage it all. When not done correctly, it could drastically affect the success of your campaigns.

Here are what your options are in terms of channel management for your small hotel, bed and breakfast, inn, or guest house.

1. Manual channel management

When you first start your accommodation business, it’s normal to distribute directly to guests and connect to just one or two third party sites.

However, if you want your revenue to grow, it’s necessary to expand your distribution by having more online sales channels.

The trouble is ongoing channel management. Attempting this manually results in unnecessary headaches. It’s just too difficult to effectively distribute your rooms without a system geared for small hotels!

You spend hours updating multiple websites for changes in rates and inventory, and it’s not a one-off job. In fact, each time a booking is made on one of your sales channels, you have to make sure your availability is reflected correctly on all of your booking sites.

What’s worse is sometimes you’re not quick enough. Things get really busy and you don’t get a chance to update everything until hours later. You end up with unhappy, double booked guests. You consider hiring an extra person just to make sure everyone is on the same page.

2. Allocated inventory

There are two main distribution models that you can choose from to sell your small hotel’s rooms online; that is, pooled inventory, and allocated inventory.

  • Pooled inventory. Pooled inventory means that you evenly distribute all your available rooms across a number of sites – including your own website. In this case, all inventory is automatically reduced across all booking sites when booking made from any site.
  • Allocated inventory. With inventory allocation, you give each channel a certain number of rooms. In this case, you limit the amount of rooms each channel can sell, splitting up inventory evenly or according to how much you think they can sell, reserving some rooms for direct point of sale bookings.

While many large hotel chains use room allocation, this is not ideal for small hotels, because…

You could potentially overbook your rooms

For example, you accept a booking over the phone, but within minutes that room gets sold on one of your booking sites – before you get a chance to log in and update it. You then get stuck upgrading your guests (and losing money on the difference in room rates), or worse – having to turn them away completely because you’re at full occupancy.

You could potentially miss out on room sales

For example, if you give Booking.com 5 rooms and Expedia 5 rooms, and Expedia gets booked out, while Booking.com has 2 rooms to spare, those 2 rooms go unoccupied, whereas Expedia could have sold it (but they turned guests away because you only gave them 5 rooms).

Channel management tool

If you want to be able to distribute rooms through as many online channels as possible (without having to worry about double bookings), then a channel manager is absolutely necessary.

For example, your inn may only have 10 rooms, but you’re connected to 5 online travel agencies (OTAs). A channel manager makes sure that your rooms are bookable on all of these sites, and your true inventory at that point in time is what’s being seen by your customers – whether it’s direct on your website or through the OTA’s website.

Make sure your channel manager integrates with the online channels you’re connected to, and gives you opportunities to connect to more channels without any extra cost. For example, Little Hotelier connects to hundreds of third party sites.

Otherwise it will still be very difficult to manage your inventory. This is what John and Karen Newton experienced for their property, Prairie Guest House:

“We had to manually update our availability because our channel manager only worked with some of our online sales channels. 60% of our inventory was connected, but 40% of it wasn’t, so it was very high maintenance. Any time we received a reservation it took 10 minutes to update inventory everywhere.”

This resulted in double bookings.

“It was cumbersome because I would have to double-check on every reservation… and on busy weekends we would sometimes oversell our rooms by accident. Sometimes we would have to upgrade guests because we over-sold our cheapest room. That error made me uncomfortable, because it would be bad for our business.”

Also, your channel manager should integrate seamlessly with your booking engine and front desk system, so that your direct online bookings and phone bookings are included in your inventory.

An all-in-one online booking solution (like Little Hotelier) will combine your booking engine, front desk system, and channel manager, meaning you only have one place to manage your hotel from.

You can update your rates and apply stop-sells at a click of a button. The channel manager will automatically reduce availability when a room is booked on any one of your sales channels.

All your booking sites will display the right inventory without you having to adjust a thing! There’s no lag time in inventory updates, so double bookings are a thing of the past.

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