The Hotelier’s Ultimate Guide to Channel Management Tools

From maximizing your booking sites and online channels, to setting optimal rates and ensuring a seamless guest experience - it’s a complex balancing act.

However, this process can easily become overwhelming and can be subject to human error, especially if you rely on manual processes for day-to-day operations. How do you ensure your distribution channels remain up-to-date and make data-driven decisions for the growth of your lodging business? That’s where channel management software enters the picture.

A channel manager is the solution to maintaining your balancing act of tasks, helping you to streamline operational processes while continuing to scale and grow your business.

In this comprehensive guide, we'll explore:

1. What a hotel channel manager is and its core functions

2. The key benefits of using channel management software

3. Essential features to look for when choosing a channel manager

4. How to evaluate and compare software vendors

5. Five top channel managers to kickstart your search

Whether you're new to channel management or looking to upgrade your current system, this guide will equip you with the knowledge to make informed decisions and boost your hotel's revenue.

Let's dive in and discover how channel management can transform your hotel's operations and profitability.

What is a hotel channel manager? And what does it do?

If your distribution channel management is like juggling tennis balls, think of your channel management software as your property’s digital juggling assistant. It keeps all of your distribution channels in the air without breaking a sweat.

This sophisticated software lets hoteliers update, manage and oversee all elements of their booking channel listings from a single, convenient interface, eliminating the need to log in and manually update information for each of your listings. Whether you need to update your room availability for Booking.com, refresh your photos on Google Travel, or write on-brand copy for your website, a channel manager does this in real-time from a centralized dashboard.

Why a channel manager is essential

Integrating a hotel channel manager into your tech stack isn’t just smart - it’s essential. It guarantees booking accuracy and consistency for guests shopping across multiple OTAs. It returns precious time in your day to refocus attention on other tasks and saves valuable funds to reinvest back into other areas of your business.

Channel managers apply a much more dynamic approach to updating distribution channels, utilizing robust API integrations to connect to your OTA listings and third-party platforms. Using this real-time connection, your channel manager keeps track of your property listings, tracks your reservations from one central location and updates your property’s availability across all platforms for you as online bookings are confirmed.

In today's fast-paced, digital-first hospitality landscape, a channel manager is no longer a luxury—it's a necessity for staying competitive and maximizing your revenue potential.

Why hotels use software for channel management

Your revenue manager or any employees tasked with revenue management as part of their role is ultimately responsible for channel management. By equipping your hotel with a channel management system, you gain valuable insights into the performance of your OTA listings and improve your ability to make data-driven decisions for the betterment of your property.

Here’s what you need to know about the benefits of using channel management software. From measuring your successes to boosting your hotel revenue, a good channel manager provides many advantages to create a winning guest experience.

Drive bookings

A channel manager increases your direct and OTA bookings by listing rooms on multiple platforms. This includes your high-traffic distribution channels and those less frequented, maximizing your listing’s viewability to as many potential guests as possible.

Channel management software also prioritizes top-performing OTAs and third-party channels, enabling you to drive bookings through channels that pair well with your property. Having greater oversight over your availability also allows you to take advantage of any last-minute cancellations or changes.

Boost revenue

Imagine adjusting your room rates across all distribution channels with a single click - that’s the power of a robust channel manager. It puts you in the driver's seat to take control of your pricing strategy with flexible settings, making it easier to align your property with market demands and tap into diverse revenue streams from various distribution channels.

Crucially, channel managers also help you maintain rate parity, an essential practice that builds trust with guests and ensures they receive consistent rates and pricing, regardless of their booking platform.

Improve visibility

In the competitive hotel industry, visibility is key to boosting occupancy rates and increasing revenue. A well-connected channel manager is your ticket to an enhanced online presence.

By positioning your property front and center on multiple OTAs, a channel manager significantly expands your reach. It ensures potential guests can easily find you, regardless of their preferred booking platform. This increased exposure not only drives up occupancy rates but also strengthens your overall online presence, giving you a competitive edge in the digital marketplace.

Automate processes

You’re likely well-versed in manually updating your listing photos, descriptions, rates and policies. A channel management software with automation offerings streamlines this information to be “pushed” directly to your OTA listings and distribution channels.

From streamlining processes to setting rates and room restrictions, automation saves you time and improves your property’s efficiency by eliminating potential concerns for overbooking or double bookings.

Measure success

Equipped with reporting and analytics capabilities, your channel management software helps you to track and measure the performance of your OTA listings and direct bookings. Utilizing OTA data from your channel manager, helps you to measure the success of your listings and associated bookings, identifies focus areas as part of your distribution strategy and enhances your property's guest experience.

The type of data you’ll look at to measure your success depends on your goals. However, data that will be especially handy includes guest segmentation, duration of stay, country of origin, preferred services and amenities.

Essential features to look for in a channel manager

Here’s what to look for in a top-notch channel manager. From robust booking and rate management tools, solid channel distribution features to powerful reporting capabilities - these essentials will equip you to make smarter, data-driven decisions for your property.

Channel distribution management

A top-notch channel manager should do more than just ensure listing visibility. Look for software that offers robust tools to manage your listings effectively. These tools should track room availability and pricing across all your distribution channels, giving you comprehensive control over your inventory.

Booking management

If your listings are spread across multiple distribution channels and platforms, you’ll need a channel manager that not only helps with your inventory management and confirm your guest bookings, but also any changes or cancellations that may crop up.

Rate management

Eliminate the need for manual rate updates by looking for channel management software that features rate management capabilities. Channel managers with robust rate management functionalities provide data-driven insights into setting appropriate room rates, depending on availability and seasonal demand.

Reporting and analytics

All the features on the market won’t be enough if your channel management software lacks ample reporting and analytics capabilities. Look for a channel manager that mines numerous data sources and offers built-in reports of your overall channel performance and guest preferences.

Integrations

A channel manager with various integrations should pair well with your existing tech stack. Consider how channel management software integrates with other hotel systems you use, like your property management system (PMS), your productivity platforms and your communication messaging systems with guests.

How to shortlist and compare software vendors

While there are many channel manager options available in today’s market, it can be difficult (not to mention, overwhelming) to make your final selection.

To simplify your decision-making, follow these steps:

1. Narrow down your options to the top three to five channel management software solutions.

2. Take advantage of free trials to get hands-on experience with each platform.

3. Request demos or live walk-throughs to see the software in action and ask questions in real-time.

4. Read reviews from fellow hoteliers who have experience with the software to gain real-world insights.

5. Consult with sales teams to address any additional questions or concerns you may have.

During your evaluation process, consider asking software vendors these crucial questions:

1. What does your software onboarding process look like?

2. Is your pricing model subscription-based or commission-based?

3. How do you ensure safety and security compliance with your platform?

5 channel managers to kickstart your search

To help you start your search for your next channel management software, we’ve highlighted five options below, covering their features and functionalities, the type of property the tool is best suited for and limitations to consider.

Lighthouse

Harnessing the power of Artificial Intelligence (AI) to transform pricing and distribution channels for independent hotels, Lighthouse (formerly OTA Insight) kicks off our list with its AI-powered channel manager.

Lighthouse's Channel Manager works alongside its Pricing Manager to automatically push AI-driven rate recommendations to your connected distribution channels 365 days a year. It also makes suggestions for automation based on real-time market demand, competitor pricing and your current occupancy rates.

Lighthouse also automates your rate parity management, monitoring across all distribution channels to ensure your rates remain optimal, competitive and consistent, regardless of the platform your potential guests book with.

Cloudbeds

A 2024 Preferred Partner for Expedia and Booking.com, cloud-based hospitality software Cloudbeds features a built-in channel manager as part of its all-in-one hotel management software.

Its integrated inventory management offerings, particularly its Split Inventory feature, help Cloudbeds stand out in the sea of channel managers. Split Inventory allows hoteliers the flexibility to sell the same physical room under multiple layouts, like transforming a large private room into dormitory-style sleeping quarters.

Hoteliers praise Cloudbeds for its ease of use, variety of features and integrations, and overall value. However, reviews note its customer service leaves something to be desired as well as areas of improvement for its housekeeping, revenue management and group modules.

Little Hotelier

With connections to over 450 booking channels including Expedia, Tripadvisor and Airbnb, cloud-based property management platform Little Hotelier offers revenue management staff a robust channel manager.

Featuring advanced distribution capabilities, Little Hotelier enables revenue managers to set different pricing or distribution channels for each of their rooms, as well as allocate availability to specific direct channels or OTAs.

Little Hotelier is a good option for smaller hotels and independent properties, like b&bs, inns, guesthouses, vacation rentals and more. It also features ample opportunities for demo viewings or signing up for a free trial.

While diverse in its report and statistics offerings, users have reported the platform lacks an intuitive setup and is limited in its available features.

Hostaway

Praised by channels and property managers alike for its user-friendly interface, Hostaway is the ideal choice for vacation rental property managers looking to regain focus on growing their business.

Hostaway’s channel manager offers connectivity to your top distribution channels, as well as smaller niche OTAs like Marriott Homes and Villas as well as metasearch engines like Google Travel. The platform also integrates with many industry-recognized providers, including Zapier, PriceLabs, PayPal, Stripe and VRBO.

Its multi-unit support offerings make it easy to connect multiple room types to a single property and assign guests to specific blocks of hotel rooms, ideal for larger group bookings.

Despite offering top-level functionality and stellar 24/7 customer service, users have expressed concerns over lengthy onboarding processes for the platform.

RoomRaccoon

RoomRaccoon helps independent hoteliers succeed with its all-in-one hotel management system. With zero-added commission, RoomRaccoon lets you connect to your existing distribution channels to receive bookings, without paying extra for using RoomRaccoon's software.

Best suited for independent hotels, RoomRaccoon's direct API connections ensure secure two-way connections with your existing booking channels and the channel manager.

Although the platform features fantastic integration capabilities with Agoda, Stripe, Zero and Toast POS, users report limited OTA connectivity offerings and a higher price point than other channel management solutions.

Request your live demo with Lighthouse

While a channel manager can seem like a daunting piece of software when you’re first getting started, there are ways you can prepare yourself when considering incorporating one into your hospitality tech stack.

Knowing what to look for in an all-in-one channel management solution as well as understanding the benefits of equipping your property with this type of software, can better prepare you when signing up for a demo or free trial. Thorough research like this ensures you fully grasp the functionalities and advantages a channel manager can bring to your operations.

Featuring some of the hospitality industry’s most trusted data and tools, Lighthouse Channel Manager boosts your revenue with AI-driven dynamic pricing and recommendations powerful insights. See for yourself how Lighthouse Channel Manager can maximize your revenue with minimal effort - book a demo with Lighthouse today!