What to Look Out For When Choosing a Channel Manager for Vacation Rentals
“But why do I even need a channel manager?” you ask.
Welcome to 2015. The year big vacation rental websites got serious about accurate availability, the year they are ranking properties with real-time booking higher in their searches, and the year they realized channel managers can deliver that flawless availability they are seeking. Without a doubt, this is the year channel management became sexy.
Now, if you work “on request” and cannot maintain accurate calendars then you are right, marketing automation is not for you, “you definitely don’t need one!”
The promise is this: A channel manager will get you more visibility and therefore more bookings. Although this is a big deal, getting more bookings is not the only reason to automate your marketing. You won’t need to log into 10 websites every day to update your calendars and prices. You’ll lower the risk of over-booking and be able to change your rates more easily. In short, you’ll increase sales, save time, reduce errors, and save effort.
While your existing Property Management System (PMS) may offer a “channel management feature,” the field is actually a real specialization. It takes time and skill to connect to sales channels, sign contracts, implement APIs, to test and maintain relationships. For this reason, if you don’t yet use a PMS, it is highly advisable to go straight to a channel manager. If you do use a PMS, enquire what channel manager they are working with.
Here’s a quick guide on what to consider:
1. Barriers to entry
Firstly and most importantly does the channel manager take 1 property or do you have to have 10 minimum?
2. Niche Marketplaces
While you surely have your eyes on the big travel agents, remember that niche marketplaces can be very lucrative. Maybe you have niche properties such as luxury villas, golf-course properties, or ski chalets. Promote your properties on marketing channels that cater specifically to you! A good channel manager can connect you not just to the big-names that they all should but also the lesser-known niche marketplaces.
3. Customer service
It can be difficult for a vacation rental owner to connect all the dots between a channel manager, an online marketplace, and a PMS. How does each channel work? How much do they charge? Should you publish net or rack rates? How much work is involved for you to connect? A good channel manager will have excellent documentation and also a good customer service team that can help customers get set-up and support their success moving forward.
4. Fees and commissions
You probably experience a low and high season. To even out your cash flow, choose a channel manager that doesn’t charge you a monthly fee but rather a commission per booking. If you have a very large number of properties a fixed price may be better for you. Ask about any hidden fees or fluctuations in the commissions according to sales channels. Find out if you will be charged in case of a cancellation.
5. Push & Pull
A good channel manager needs to be able to both push (publish) inventory to and pull (gather) inventory from online marketplaces. This is the only way a vacation rental owner can use a channel manager to prevent over-bookings.
6. Other Integrations
Vacation rental managers and owners use a wide variety of Property Management Systems (PMSs) these days. They don’t want to have to change the way they do business in order to use a new channel manager. This is why it’s important for channel managers to not only connect to many different sales channels but to have flexible integrations with a variety of PMSs. Remember that one day you may want to change your PMS and you won’t want to lose all your relationships with the sales channels.
7. Property Segment
If you are running a hotel you will want to work with a specialized hotel channel manager that works with rooms. For vacation rentals, you’ll need a different beast which works with individual property units. It might sound trivial, but working with the wrong format will make you tear your hair out.
Check what other people are saying about the channel managers you are considering. Consider looking at LinkedIn groups, specialized forums, and industry blogs. Remember, unhappy people shout the loudest. No news is not necessarily good news.
9. Ease of use
Once you are up and running channel management can be a dream come true, but it can be a chore to get set up. Generally speaking, the more flexible the system is the harder it will be to set up in the first place. Try to find out what is involved and decide whether you prefer a simple system with fewer options or not. A simple system may lead to less accuracy in your prices on partner sites, for example, if it cannot handle your discounts or fees for extras. A simple system may not be able to work easily with many identical properties, it may limit the number of images you can upload, or it may not handle the amenities you provide.
10. Business model
Do you have to sign a contract with each sales channel or can you sign a single contract with the channel manager? Both options have their advantages. It’s probably cheaper to make a contract with each sales channel, but if there is an option to sign only one contract it means any sales channel can sell your properties without you ever having to talk to them. Ideally, you will have a choice to do both so you can make a contract with your favorite sales channels but allow the others to sell you too.
Hopefully, we’ve given you a taste of both the benefits and pitfalls of channel management. As always in life what seems easiest at first is usually not the best. A little work today to spread your risk with more sales partners will ease your troubles and earn more profits in the long run.
Author: Vanessa de Souza Lage
Company Name: Rentals United
Bio: Vanessa de Souza Lage is the owner of holiday rentals in Barcelona, the founder of the holiday rental agency “Holiday Velvet” and the CMO of Rentals United, a channel manager for vacation rentals. She has a passion for new tech and looks forward taking the conversation further with VRMA members at the event in New Orleans on the 26th of October 2015.