Have you recently started a hospitality business or are thinking of getting into serviced accommodation in the near future? No matter how large or small your vacation rental business, you may still be doing things manually or linking channel calendars up to each other via iCal. You may have heard of channel managers or PMSes. However, you may not be sure about why they are needed. Perhaps you’ve already done your research but now are left with one burning question. At what point do I need a channel manager? Do I get one before starting my business? If I’m running one unit, do I wait until I have 5? Hopefully, the points raised in this article will help you make up your mind.
What is a channel manager or PMS and why do I need one?
In brief, they are pieces of software which, either on their own or in conjunction with each other, allow you to automate parts of your business. They help you distribute your rates and availability to multiple OTAs or listings sites such as Airbnb and Booking.com. Some of them, like Zeevou, also provide you with a website for direct bookings and a whole host of other useful features.
Do I need a channel manager?
If you are serious about running a successful hospitality business, the question is probably not whether or not you need a channel manager, but at what stage you need one. We frequently get asked this question by people who are just starting off or who are only managing a handful of units. Of course, it is possible to do without one. Perhaps, you could even be led into thinking that you can just save the amount it would cost you each month to pay for one.
Once you start researching channel managers, it will soon become clear that at some point or other you probably want to start using one, the question is when. It might seem a good idea to minimise your costs as you start off and leave signing up with one until further down the line, however both in the short run and in the long run, that could end up costing you a lot more.
At what point do I need a channel manager?
We recommend you sign up for a channel manager from the word go. Yes, you can manage without one. However, there are a few reasons why you should not wait before you choose one:
1. If not now, when?
When are you going to draw the line and convince yourself to invest in your business? It’s likely to be one of the smallest investments you make but could be one of the most rewarding ones if done right. The argument that you’ve only got one apartment doesn’t stand. Why is 2 any different than one? Or 3 any different to 2? Does anything change at 5, 10, 50, or 100? The only time there’s a marked change is when you go from 0 to 1! And if you’re thinking that it will be worth your while whenever you need a VA and can save on your VA costs by getting a software, then you’re suggesting that your time is worth less than that of a VA up to that point, which is most definitely not the case.
2. Get direct bookings from the start.
One of the aspects of your business that you need to pay sufficient attention to is getting direct bookings. Many channel managers will provide you with a booking widget to add to your own website, some will even provide you with a full website with an integrated booking engine. This means you’ll be able to save on commission fees. It will also help you get on the ladder of search engines immediately. The savings can far outweigh the cost of your channel manager. Make sure to ask the channel managers or PMSes that you are considering how good their direct booking website actually is. Is it SEO optimised? Does it have rich snippets built-in? Can you specify your own keywords and other metadata? Are you able to run a blog off it? How about adding custom pages?
3. Keep your data clean.
The other thing that your channel manager or central reservation system (CRS) is likely to become, is your main database. It will contain all your guest data and contact information. You want to make sure that you have all your booking data in one system too. Doing so will allow you to run year-on-year reports in the future to analyse trends in your business. At the same time, you want to make sure that the channel manager you go with automates the collection of guests’ real email addresses. This will enable you to start building up your very own direct email marketing list from the word go. Check that the channel manager can also take care of GDPR opt-in/unsubscribe requirements for you.
Data migration between channel managers is extremely difficult as most providers only allow you to export a very limited amount of information if you’re trying to leave them. Hence, it is even more important to pay great attention to choosing who you decide to go with from the start. This will ensure that you can build your business on a safe base. It will give you confidence that the information that you are gathering is systematised and won’t be lost in the long-run.
How do I decide which provider is the right one for me?
If you’ve decided to start using a hospitality management software, make sure to look into every claim in detail. This way you can ensure that it does what it says on the tin the way you want it to. Check their full feature list. Try to find out how dynamic they are in releasing new features and keeping up with the times.
Figure out how much time using one is going to save you. Calculate how much you are going to be able to save in OTA commissions. Finally, look at their pricing. See if it makes sense as the good value per money, rather than absolute cost. Make sure you get yourself the best channel manager out there for your needs. You don’t want to regret it further down the line! (For a full blog post on what the difference is between a PMS and a channel manager, and how to choose one, click here.)
Should you need any help in choosing a channel manager that suits your needs, drop us a line and a member of our team will be happy to guide you.