8 boxes connected to a single box in the middle reflecting the increased importance of a channel manager to handle otas and metasearch players

The role of channel managers in hotels has rapidly evolved in recent times with the explosion of digital channels and the rising complexities of managing integrated hotel distribution.

NB: This is an article from RateGain

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Traditionally, channel managers were responsible for basic connectivity and content updates to Online Travel Agencies (OTAs) and Global Distribution Systems (GDS). The job was transactional as long as inventory and pricing were synchronized periodically. However, channel management has become vital for a hotel’s commercial success, with increasing reliance on OTAs driving a majority share of room night reservations and the emergence of metasearch players.

Increasingly, heads of distribution and e-commerce are getting elevated to revenue strategy roles while channel managers take greater ownership of formulating and executing distribution plans. Their KPIs now also include contribution margins, not just volumes.

The analytics capabilities required by modern channel managers have heightened dramatically, given the vast data flowing in from online channels and the critical need for intelligence to optimize pricing and partnerships. Mastering revenue management systems, dynamic pricing tools, and bid management technologies is now imperative.

Common Challenges Faced By Channel Managers

The most common challenges faced by channel managers in the hospitality industry are:

  1. Managing Complex Hotel Distribution LandscapesHotel channel managers manage intricate webs of Online Travel Agencies (OTAs), Global Distribution Systems (GDS), metasearch engines, tour operators, and local destination marketing companies – each with bespoke commercial terms, technical connections, and content requirements. Compounding complexity, various region-specific platforms crop up, frequently needing evaluation and onboarding. Channel managers devote extensive effort to assessing new opportunities and expanding network reach.
  2. Balancing Direct Bookings with OTA RelianceAn over-dependence on OTAs for bookings despite high commissions vs trying to drive more direct bookings/loyalty creates tension for hotels. Channel managers play mediator – allocating inventory and rate parities across cores vs. non-cores OTAs to limit guest leakage while respecting contractual obligations. Strategic promotions may temporarily restrict OTA allotments to stimulate direct channels. It requires savvy balancing and transparency with all stakeholders.
  3. Incentivizing OTAs & Local PartnersChannel managers design customized campaigns and incentives, engaging OTA sales teams and external partners to help amplify seasonal demand generation. For example, a 10% bonus commission payout for OTAs delivering over 20% MoM revenue growth during off-peak seasons. Or additional exposure and geo-targeted promotions for destination management companies driving group travel business. Inventive ways to reward performance help mutually.
  4. Enhancing Visibility into Booking PerformanceDisjointed systems and the usage of spreadsheets hamper channel managers from capturing unified visibility into group/channel-wise booking volumes, cancellation patterns, feed failures, etc. Manual collation of reports is frustrating. Channel managers advocate for enterprise-grade systems with robust analytics capabilities, providing rich, real-time insights into reservation data from all connected platforms. This allows optimal decision-making.
  5. Staying Updated on Market ShiftsGiven the hospitality sector’s dynamism, channel managers must continually monitor trends across geographies, given unique regional developments in the OTA and travel marketplace. Sudden macro events or mergers also compel channel managers to work closely with revenue and commercial teams to adapt pricing models and channel partnerships and revisit contracting terms suited to meet evolving customer needs or competitors.

Read the full article at RateGain