Channel manager: Do you really need one for your accommodation?

Most small-scale accommodations don't need a channel manager yet. Still, owners often buy one as soon as they launch their first booking button, even though the problem that software solves hasn't appeared yet.

What a channel manager is and does

A channel manager is software that synchronizes your availability and prices across multiple sales channels. Once a room is booked on Booking.com, the channel manager automatically closes that same room on Airbnb, your booking site and all other channels where you're active.

That sounds logical, but it's only useful if you actually have multiple channels. If you only use Booking.com and nothing else, a channel manager is worthless to you.

The system works as follows:

1. Booking comes in via one of your channels, say Booking.com.
2. Channel manager receives the booking via an API connection.
3. Availability updates on all other channels within seconds.
4. Prices can also be managed centrally, so you don't have to log in to each platform separately.

Without a channel manager you do this manually. You log into Booking.com, block the room, then log into your own system, block it there too, and so on. With two channels that takes five minutes. With four channels and a busy weekend it costs you an overbooking.

The problem: when manual no longer works

An overbooking is one of the worst situations for a small accommodation. You have to call a guest, arrange an alternative, limit reputation damage. And it's completely avoidable.

The risk of overbooking rises in two situations:

• You sell via three or more channels at the same time.
• You have few rooms, so each room represents a large share of your revenue.

If you have three rooms and two channels, the chance that the same room is booked via two channels at the same time is realistic. Especially on busy dates, when bookings come in quick succession. Manual management will eventually fail.

If you have ten rooms and two channels, the risk is smaller, but still present at high occupancy.

Calculation example: when does a channel manager pay for itself?

Suppose you have a B&B with 4 rooms and are actively on three channels: Booking.com, Airbnb and your own booking site. You average 40 bookings a month.

Without a channel manager you spend an estimated 10 minutes per booking manually updating availability on all three channels. That's 400 minutes a month, almost 7 hours.

A channel manager costs you 40 euros a month. Is your time worth 40 euros per 7 hours? Almost certainly.

But there's also a direct cost calculation:

If you expect an overbooking less than once a quarter, the business case for a channel manager is weak on cost reduction alone. Time savings and peace of mind are the real argument.

Decision table: do you need a channel manager?

This is the central question. Use the table to assess your own situation.

The threshold for most small accommodations is at three active channels. If you're on two channels and considering adding a third, that's the moment to set up a channel manager, not after the fact.

Common mistakes

Buying too early, before the problem exists. The most common mistake: you hear you need a channel manager as soon as you install a booking module, so you buy one. But if you were only on Booking.com until then and now also want to book directly, you have two channels. That's manageable manually. Wait until you actually synchronize multiple channels.

Buying a PMS when you only need a channel manager. A PMS (Property Management System) is software that does everything: reservation management, check-in, housekeeping, invoicing. It's expensive and complex. If you only want to prevent rooms from being sold twice, you don't need a PMS, just a channel manager, and sometimes not even that. Unsure whether a PMS fits your scale, first read which PMS choice makes sense for small accommodations.

Continuing to manually update availability alongside a channel manager. Once you have a channel manager, you must make all updates through that system. If you also manually log into Booking to change availability, you disrupt the synchronization and create exactly the problem the software was supposed to solve.

Underestimating the costs. A 40-euro-a-month channel manager is 480 euros a year. That's not a large amount, but it's not a free choice either. First calculate how many direct bookings you're doing and what that generates before you commit to a monthly fee. The article on Booking.com commission calculated helps you make that comparison.

What order do you set this up in?

If you decide a channel manager is needed, the setup order determines how smoothly it goes. Most owners make the mistake of switching everything on at once and lose track once the first sync fails.

Follow this order:

1. Launch your own booking module first. This is your most important channel because you don't pay commission here. If you're still not sure exactly what this is, read how a booking module works and when you need one.
2. Then couple Booking.com. Test with a test booking to see if availability really stays in sync. Block a date in your booking module and check if it closes on Booking.com within minutes.
3. Add extra channels last, like Airbnb or Expedia. Each channel you add increases the chance of a sync error, so test each coupling separately before adding the next.

Plan on half a day to set up and test. Don't open your full availability until you've seen at least three test bookings sync without error.

What you can do now

Three steps to determine if you need a channel manager.

Step 1. Count your active channels. Every platform where guests can currently book a room with you counts. Booking.com, Airbnb, your own website with booking button. Direct phone/email don't count because they're not automated channels.

Step 2. Check your occupancy on busy dates. How close do you get to full on weekends and events? The higher your occupancy, the higher the risk that a room is booked via two channels in the minutes before you manually update.

Step 3. Set your threshold. With two channels and low occupancy, you manage it manually. With three channels or high occupancy with two channels, the investment of 30 to 50 euros a month is quickly recovered.

If you don't yet have your own booking button on your site, that's the first step. Read what a booking module is and when you need one, or go straight to the comparison of booking modules if you already know you want one.

Want to have it all set up, including channel manager, coupling and your own booking site? Check out automation for accommodations. And first calculate how much you're now spending on commission using the savings calculator, so you know how much room you have for software.

The question isn't whether a channel manager is useful software. It is. The question is whether your situation justifies one. For most small-scale accommodations in the Netherlands, the answer is: not yet, but save this article for when you add a third channel.

Want to see the full picture of how you become less dependent on Booking.com and book more directly, read the complete guide to direct bookings.