What is a Channel Manager and Why it’s Important

As a vacation rental host, you’ve probably heard the term channel manager. It’s a common term that many hosts throw around on Airbnb Facebook groups and community forums and is discussed on vacation rental podcasts, but what is a channel manager, really?

In this article, we define what a channel manager is, what it’s not, and how it differs from other systems like a property management system (PMS). We will also explore how vacation rental software companies like Hostaway have blended channel management and property management systems creating an all-in-one solution.

What is a Channel Manager and What Does it Do?

A channel manager is a software solution that enables multichannel distribution, i.e. distributing your listing onto multiple online travel agency websites (OTAs). If you want to be seamlessly listed on Airbnb, Vrbo, Expedia, Booking.com, Hopper, etc, you’ll need to be using a channel management system.

Channel manager software operates independently from, but in connection with, a property management system. Essentially, your channel manager is your marketing/distribution and your property management system is your operations.

Historically, the hotel industry has had both a channel management system and a property management system, but the new age of hospitality has revolutionized how vacation properties operate. Now, the top channel managers are becoming an all-in-one solution. This means you can operate your vacation rental, communicate with guests, update pricing, adjust availability, list across dozens of websites, and monitor performance, all in one system.

Hostaway is an excellent example of an all-in-one vacation rental management system which means you get the benefits of both a channel manager and a property management system within one easy-to-use platform.

What are the Benefits of Using A Channel Manager?

1. Improves Your Online Exposure Resulting in Higher Occupancy and Rates

Have you ever wished you could be in two places at once? Well good news, that is exactly what a channel manager allows for. In fact, not only can you be in two places at once - you can be in hundreds. Channel managers are essentially bridges that connect your PMS to a network of different online travel platforms.

This improved online exposure, when done right, will significantly increase occupancy and average daily rate (ADR).

Distributing across several will increase your listing visibility to potential guests providing you more selling opportunities.

More views mean more inquiries which ultimately results in more bookings.

Diversifying your sales channels both improves revenue and minimizes risk. Many vacation rental hosts are 100% dependent on Airbnb bookings; this creates inherent risk. What if all of a sudden you stop receiving bookings on Airbnb? What if your account gets locked down temporarily or permanently?

By using a channel manager you can spread your risk across various OTAs. It means you can incorporate a direct booking website. This will let you diversify and rest easy knowing that your vacation rental is not reliant on just one platform.

2. Removes the Risk of Double Bookings and Mitigates Cancellations

One of the key functions of a channel manager is synchronizing your calendars across sales channels.

If you're listing yourself on multiple websites without a channel manager you leave yourself open to a lot of risks. It’s an all too common occurrence that hosts receive overlapping bookings on Airbnb and Vrbo which could have been completely avoided with the use of a channel manager.

Good channel managers have built robust API connections that remove the risk of double bookings. Never again will you have to cancel on a reservation because you double booked the dates.

Cancellations on OTAs like Airbnb and Vrbo are detrimental to listing performance and search ranking. On Airbnb, for example, you will lose out on Superhost status, have the dates permanently closed, and receive an automatic review added to your listing that indicates you’ve canceled a reservation.

Channel managers remove the risk of double bookings and therefore help minimize the need for cancellations.

3. Communicate with Your Guests, No Matter Where They Booked From

By having a unified inbox, managing guest communications across several booking sites is easy. A channel manager eliminates the need to log in and out of websites in order to respond to guests who booked on different sites.

With Hostaway, you can configure automated messages that trigger based on rules you set. Want to never miss sending check-in details? That is an easy fix: Just set an automatic message that delivers one day before the check-in date.

Additionally, you can create templated answers to common questions. Do your guests regularly ask how to adjust the thermostat? With a channel manager, you can create a button response to quickly help guests.

4. Seamlessly Updates Your Content, Photos, and Rates Across Sales Channels

One of the major benefits of a channel manager is the ability to push data directly to multiple sales channel websites at once. This data could be photos, listing descriptions, rates, and more.

Never again will you need to worry that you forgot to update your policies on each of your sales channels. Nor will you need to worry that the photos were not updated. This synchronization of your online presence will easily save hours of work each and every week.

Consider the hours it would take to adjust pricing across dozens of OTAs. Without a channel manager this process is painful, time-consuming, and open to human error. Instead, with a channel manager, you can update the pricing on one calendar and it will automatically take care of the rest for you.

How to Distinguish Between Strong and Weak Channel Connections?

Not all systems are built equal. This is especially true in the vacation rental software industry. It can be a real challenge to distinguish between competitors in the industry. They all seemingly have the same or similar technology but the reality is they don’t.

Many companies advertise channel management but few have strong connections and fewer can honestly advertise it as a strength of their technology.

When evaluating the different systems on the market, it’s important to develop some basic knowledge. Fortunately, you don’t need to be a technology expert. With the right questions, you can quickly distinguish between strong and weak systems.

What are the Differences Between 1-way and 2-way Channel Connections?

When evaluating a connection you must know the differences between 1-way and 2-way connections.

• In a 1-way connection, the system is sending data to the sales channel.

• In a 2-way connection, the system is sending data to the sales channel and the sales channel is sending data back to the system.

What does this mean in practice? Well if the system is 1-way it is probably pushing rates and availability to the sales channel but not receiving booking confirmations back. If it’s 2-way it is sending rates and availability and receiving booking confirmations back directly into the system. Not surprisingly, a 2-way connection is the best option, so make sure your channel manager has two-way integrations with every major sales channel.

What is an iCal and is it the Same as a Channel Connection?

An iCal is a file format that exchanges simple calendar data. An iCal is the weakest connection possible and would not be considered a true channel connection.

If a channel manager advertises only an iCal connection, run the other way! What it really means is they have a weak, ineffective connection with the sales channel, and won’t save you a lot time.

That being said, iCal does have its place. iCal allows for some additional connections beyond what is often marketed. For example, Hostaway can export iCals which can be imported into nearly all, less populartravel website calendars, for example TripAdvisor.

What Is the Limit of a Channel Connection?

A channel connection can mean a lot of different things. Most vacation rental software will have a connection that allows you to push calendars and rates to Airbnb, Vrbo, and other websites. However, this is not the limit of what a channel connection can mean.

Hostaway has mapped a greater connection than competitors which allows users to push data such as descriptions and photos, not just calendar availability.

When evaluating different channel manager products, consider what are the limitations of the connection. Can you upload photos, descriptions, titles, etc?

Tips for Evaluating Vacation Rental Software

Evaluating vacation rental software can be difficult without in-depth knowledge of technology and the vacation rental industry. However, we have a couple of simple tips for easily determining if the technology you're considering is strong or weak.

LinkedIn

One of the simplest and quickest ways to evaluate new technology is by checking the company LinkedIn page.

Look at the list of employees and see how many have technical titles such as developer or engineer. Does it appear as though the company prioritizes its technology through its hiring practices?

Check out the backgrounds of the CEO and CTO. Do they have experience building strong technology?

If the company you’re considering doesn’t seem to have a strong technical background and team, that’s a red flag.

OTA Partners

Make sure the systems you are evaluating are recognized by the platforms that you list on and/or hope to list on. If they are not, their connections to each are likely to be weak.

For example, Hostaway has achieved the highest partnership status with major OTAs, being an Airbnb Preferred Plus Partner, a Vrbo Elite Partner, and a Booking.com Premier Partner.

Capterra

Always check reviews. Capterra is a great software evaluation website where you can compare channel management software and read what users have to say about each. Another good option for checking reviews is G2.

Crunchbase

Finally, a great source of information on companies is Crunchbase. On Cruchbase you can find details about the investors and funding of the company your researching. Look for companies with adequate funding. Companies with little or no funding have less resources available to them to keep improving their software and provide good support. For example, Hostaway recently received $175 million in funding as a strategic growth investment from PSG. The raise is the largest ever in the vacation rental industry and only the second largest in the entire travel and tourism industry thus far in 2023.

Which Travel Booking Sites does Hostaway Integrate with?

Hostaway connects to many of the largest OTAs in the world. It also has robust connections with several niche and up-and-coming booking platforms. These include:

• Airbnb
• Vrbo
• Expedia
• HomeAway
• Booking.com
• Tripadvisor
• Homes & Villas by Marriott Bonvoy
• Hopper
• Whimstay
• Golightly
• getawayGoGo
• HouseStay
• VacayMyWay
• TravelStaytion
• Got2Go
• bnbfinder
• TravelTrunk
• HolidayKeepers
• Google Vacation Rentals

Hostaway also integrates with your direct booking website, whether that was built with Hostaway’s website builder or with an external website builder like Wix or ICND.