Channel Management Software for Hoteliers & Hosts
Mastering the online booking landscape with Channel Management Software
The number of walk-in guests and phone bookings in the hotel industry drops yearly. The internet has become the most important source for travelers to find and book accommodation. In fact, the online booking market size is estimated to double from $432 billion in 2020 to $833 billion in 2025. [Statista]
RoomRaccoon’s Booking Channel Trends Report reveals a growing preference among travelers to book directly through hotel websites using integrated booking engines. This is followed by high-volume bookings on global platforms like Booking.com, Expedia, and Airbnb, with local channels rounding out the mix.
With travelers booking across so many channels, how do you stay on top of it all? A Channel Manager ensures your rates and availability stay perfectly synced across every platform, helping you maximize visibility, streamline operations, and boost revenue with ease.
This buyer’s guide explores the value of channel management and the key benefits of using channel management software. Plus, we’ve compiled 10 expert questions to ask software providers, helping you choose the best solution for your business.
What is channel management?
Channel Management is the administration of different booking channels to achieve your sales and marketing goals. Distributing your rates and availability through multiple channels, including your own website, is a great way to reach a wider audience and sell more rooms.
RoomRaccoon data reveals that the average hotel uses between 3-5 booking channels to distribute its inventory.
Managing rate and inventory updates across an extensive network of extranets is a huge challenge for hotel staff, leading to time-consuming manual processes often fraught with mistakes and double bookings.
In this day and age, it simply isn’t viable.
A Channel Manager is a software solution designed to simplify and speed up this process through API connections to various booking channels.
The powerful tool automatically updates room availability in real-time when a booking is made and when you make any rate changes to your listings. More importantly, it keeps your reservations calendar synced across your sales channels.
A channel manager automatically imports bookings from third-party websites into your property management system (PMS), centralizing all your reservations for easier tracking and organization.
RoomRaccoon was proudly named the Best Hotel Channel Manager in both 2023
See what sets us apart! Learn more
How does it work?
The moment a reservation is made on any booking channel, the channel manager automatically delivers the reservation details back into the hotel’s reservation or property management system and instantly reduces inventory across all channels, including the hotel’s own website.
5
Quick fact: RoomRaccoon boasts one of the fastest Channel Managers with a top speed of 5 seconds synchronization.
7 Benefits of Using a Channel Manager
Make single or bulk rate updates across all channels from one platform, saving time and reducing disruptions.
Increase your property’s global visibility, driving more bookings and higher revenue.
Boost brand awareness and drive direct bookings by leveraging the OTA Billboard Effect to attract guests from OTAs.
Sync availability in real-time, reducing the risk of overbooked rooms.
Dynamically adjust rates to stay competitive and capture market demand.
Centralize reservations, rates, and channel performance in one dashboard for seamless management.
Identify top-performing channels, helping you refine your strategy for better results.
What are the different types of booking channels?
Online Travel Agency (OTA)
An OTA sells accommodations, tours, transportation, and trips on an online platform. They are third parties who sell services (mostly directly to the public) on behalf of hotels and other accommodation providers.
Agency model: You pay a commission per booking from an OTA.
Metasearch Channel
A metasearch engine is a search tool that sends user requests to several other travel sites and aggregates the results into a single list.
Agency model: Cost-Per-Click (CPC) or Pay-Per-Click (PPC) models charge you for every click, regardless of the outcome.
In contrast, Google Hotels offers a more efficient Pay-Per-Stay model, where you only pay when a guest completes their stay.
Global Distribution System (GDS)
A GDS is a worldwide channel between travel bookers and suppliers. It displays live product, price, and availability data to travel agents and online booking sites. The GDS is often used to tap into the corporate travel market because it can present hotels, flights, and car rentals.
Pricing: You pay commissions for bookings through GDSs. Connecting to prominent GDSs through a Channel Manager prevents you from paying individual connection fees for each GDS.
Wholesalers
A wholesaler sits between travel agents and suppliers to act as a middleman, sourcing products (rooms, rates, packages) in bulk and selling them to various clients (travel agents, OTAs, tour operators).
Pricing: You negotiate prices with wholesalers for rooms or packages.
Booking Engine
A booking engine handles online reservations directly through your property’s website. A mobile-friendly, high-converting booking engine that’s simple to use is your key to driving more direct bookings and cutting down on OTA commissions.
Pricing: Software providers may charge a monthly or annual subscription fee on top of commissions per booking.
At RoomRaccoon, we’re committed to empowering independent hoteliers with commission-free direct bookings.
That’s why our booking engine comes standard with every package—delivering value without added costs.
OTA Billboard Effect
Hotels featured on OTAs benefit from the Billboard Effect—a phenomenon where OTAs act as advertising platforms, showcasing hotels to a wide audience. Many bookers, drawn to find better deals or more details, often visit the hotel’s website and complete their booking directly.
The user enters the OTA and searches for hotels in London.
2
He finds Hotel XYZ, which he likes and fits his preferences.
Before booking, he goes to Google and searches for “Hotel XYZ London” to find out how to get to the hotel, what transportation options are nearby, etc.
He discovers price disparities thanks to Google Hotel Ads.
Clicks on the Google Hotel Ads results to learn more about price differences.
Finally, he makes the booking on the website offering the most economical price.
What is an online distribution strategy?
An effective online distribution strategy is key to achieving your business goals, whether that’s increasing bookings, driving revenue growth, expanding international reach, or boosting overall profitability.
This strategy starts with defining clear objectives and mapping out what you aim to achieve from each channel. For instance, using a Global Distribution System (GDS) can be particularly valuable for attracting international corporate travelers.
Each distribution channel offers unique advantages and limitations, making it essential to understand their differences. By leveraging the right mix of channels, you can build a strong channel management strategy that aligns with your goals and maximizes your property’s performance.
Channel Strategy Criteria
When evaluating channel opportunities for your business, it’s important to consider several key factors. Channels vary widely in terms of their set-up and the type of travelers they attract, making it challenging to align them or draw direct comparisons. However, by stepping back and assessing channels based on these criteria, you can make more informed decisions:
• Cost Structure
Evaluate the costs of using each channel. Are fees transactional, such as commission per booking or pay-per-stay, or are there higher upfront or ongoing costs? Understanding this helps you measure profitability per channel.
• Integration Effort
Expanding to new channels requires integrating additional processes and technology. Ensure your channel management software supports your current and prospective channels, simplifying the expansion and avoiding operational hurdles.
• Market Potential
Look beyond the number of customers a channel can reach. Consider the type of traveler it attracts—business versus leisure—and their booking patterns. Do they book frequent one-night stays or longer package deals? Assess the channel’s ability to meet your property’s revenue goals based on customer profile and buying behavior.
• Engagement Opportunity
Channels vary in how they let you interact with customers. For instance, platforms like Booking.com require active engagement through review responses and guest communications. Think about how each channel impacts your brand image and what effort is needed to maintain a strong brand presence.
Questions to Ask Before Investing in Channel Management Software
Shopping for channel management software? Here are 10 expert questions to ask software vendors to make the best investment for your property.
Do they use a pooled inventory model?
There are two types of distribution models: pooled inventory and allocated inventory.
Independent hotels favor the pooled inventory model because it allows all your connected booking channels, including your website, to access your entire inventory simultaneously. Whenever a booking is made, your overall inventory is reduced in real time across all channels, preventing overselling.
On the flip side, allocated inventory assigns a specific number of rooms to each channel. This can lead to inefficiencies, such as one channel selling out while others have unsold inventory. It also increases the risk of overbookings due to delayed updates.
Does the channel manager support global and
local channel connections?
Your channel manager should connect you to both major global booking platforms (like Booking.com and Expedia) and smaller, regional OTAs popular in your local market. This ensures your property reaches a diverse audience and maximizes booking opportunities across all markets.
Reliable XML Connections
Ensure the channel manager integrates with global channels using reliable XML connections. This ensures smooth, real-time data transfer between systems, reducing errors and keeping your availability, rates, and inventory up-to-date across all platforms.
Think of an antenna with weak reception—hazy visuals and interrupted signals. The same applies to weak connections between software systems. Poor integration can lead to delays in updating rates and availability, increasing the risk of overbookings and missing crucial reservation details.
Is comprehensive reporting part of the system?
A channel manager should provide detailed reports on your top-performing channels, occupancy rates, and revenue. This data helps you track performance, compare results over time, and fine-tune your channel strategy to boost income.
Here are a few important reports to look for in a channel manager:
• Channel Performance Report
• Revenue Breakdown Report
• Occupancy Report
• Booking Source Report
• Booking Trends Report
• Rate Comparison Report
• Cancellation Report
• Conversion Rate Report
• Geographic Insights Report
• Pace Report
Buyer’s Tip: Look for a channel manager that offers clear, easy-to-read reports with insights you can act on immediately to optimize your revenue strategy.
Can you manage additional channel features with the channel manager?
Besides selling rooms, hotels use booking channels like Booking.com and Expedia to run channel promotions and accumulate reviews from past guests. These features are usually maintained within the channel’s own extranet.
Rather than constantly clicking through multiple extranets, the most effective channel management software will allow hotels to manage essential channel features in one place. This makes it easier for them to stay organized and efficient.
Other features that you can manage within a channel manager:
• Channel promotions
• Guest reviews
• Content management (room descriptions and photos)
• Booking confirmation emails
RoomRaccoon simplifies the entire process of selling rooms on Booking.com with a range of API connections that cover promotions, reviews, content, and emails via our channel management software. Learn more.
Can the channel manager integrate with my existing systems?
Before selecting a channel manager, ensure it can integrate with your existing systems and tools. This integration boosts accuracy and efficiency in your property’s front and back ends.
To achieve the best results, many hotels pair their channel manager with these key systems:
• Booking Engine: For direct bookings and a smoother guest experience.
• Property or Reservation Management System (PMS): To centralize and automate daily operations.
• Payment Processing System: For secure and efficient payment handling.
Buyer’s Tip: Simplify your tech stack and maximize automation by choosing an all-in-one hotel management system like RoomRaccoon, which combines these tools into a single, streamlined solution.
Please see comparison table for more details
Feature All-in-One Solution
Subscription/Contract
One subscription covers everything.
Support
Pricing
Staff Training
System Reliability
Single point of contact for all support needs.
All-in-one package includes a channel manager, PMS, booking engine, and payment processing—cost-effective.
Easy to train staff on a unified dashboard with consolidated data.
Built on a unified core system, ensuring consistency and seamless performance across all features.
Single-Use Channel Manager
Multiple subscriptions required for different tools
Separate support lines for each system, leading to potential delays.
Individually priced tools increase overall costs.
Managing multiple interfaces is complex and requires more training time.
Integrations from various acquisitions often have differing underlying systems, leading to compatibility and reliability issues.
How does the software handle Virtual Credit Card (VCC) transactions from OTAs?
Can it automate importing, charging, and reconciling VCC payments to reduce manual work and ensure secure processing?
Your channel manager should automatically import all essential guest and reservation details, including VCC information, eliminating the need to manually retrieve data from OTA extranets. With RoomRaccoon’s integrated payment processing system, this information is securely stored in a dedicated VCC dashboard. The dashboard offers an auto-charge feature, ensuring that VCCs are charged as soon as they’re activated, so you never miss an activation deadline.
Learn more about managing VCCs.
Good to know: RoomRaccoon imports the VCC straight into the guest reservation for easy access and visibility and can auto-charge the VCC when it’s activated, so you never miss out on revenue!
Can it dynamically adjust your rates to stay competitive and capture market demand?
Selling at the right rate and at the right time is key to maximizing occupancy and revenue. A channel management solution with dynamic pricing functionality provides greater control over your pricing strategies.
This functionality enables you to create pricing rules that automatically adjust your rates based on current data (occupancy, time before arrival). For example:
• High demand: Raise rates to maximize revenue.
• Low demand: Reduce rates to encourage more bookings.
• Competitive opportunity: Adjust rates—up or down—based on competitor availability and market conditions.
Dynamic pricing helps you optimize your revenue and reduce the number of unsold rooms by keeping rates competitive and seizing market opportunities.
Learn more about dynamic pricing rules.
Is the pricing model per channel, reservation, or flat fee?
Let’s talk pricing. Independent hotels typically have constrained budgets, and pricing guides their decision-making.
In most cases, the technology will pay for itself through results. However, it’s still important to understand the different pricing models and which are better suited to your budget and property management needs.
• Flat fee ”Recommended”
This pricing model operates on a monthly or annual subscription basis, offering a set number of booking channels depending on your chosen package.
The key benefit is predictability—you’ll know exactly how to budget since your software cost remains consistent. Additionally, you can connect to channels without incurring extra fees. This straightforward approach makes it a popular choice for accommodations of all sizes, from boutique hotels to larger properties.
• Pricing per reservation
This pricing model is based on a commission basis, similar to OTAs. This means that hotels will end up paying a double commission per reservation.
• Pricing per channel
This pricing model charges per channel you connect to. This means budgetconscious hotels will be limiting their reach.
Buyer’s Tip: Most software providers offer a 10%-20% saving when you choose an annual contract.
How long does it take to implement the software?
Most cloud-based providers offer some form of set-up service to help you get started.
RoomRaccoon takes this a step further with a managed onboarding program with a dedicated online session focused on Channel Manager setup. This session guides you through mapping room rates and categories for each channel, ensuring your property is seamlessly connected and ready to maximize bookings.
Are reliable support and resources available?
Quick solutions are critical when issues arise. A dependable channel management provider should offer access to experienced support staff for quick resolutions, along with dedicated success managers to guide you in optimizing your setup and achieving your goals.
Additionally, comprehensive resources like FAQs, help articles, and howto guides should be readily available to assist you in navigating the system and resolving minor issues independently. Robust support ensures smooth operations and minimizes disruptions to your property.
RoomRaccoon Reviews Summary
Take a self-guided tour of RoomRaccoon’s Channel Manager
Managing your rates and availability across multiple booking channels can be a hassle, but not with RoomRaccoon! With instant two-way synchronization, you can update your rates and inventory in one place, and we’ll seamlessly sync them across all your connected channels in real time.
Take a product tour
About RoomRaccoon
Run your property smarter, not harder.
RoomRaccoon is an award-winning, all-in-one Hotel Management System that streamlines operations, enhances guest experiences, and maximizes revenue. Our platform integrates a Property Management System, Channel Manager, Booking Engine, Payment Processing System, and a suite of innovative tools into a single, user-friendly interface.
Trusted by thousands of properties worldwide, RoomRaccoon offers over 400 integrations, making it one of the most connected solutions on the market.
Book a Demo