With today’s hastened technology, revenue channels emerge almost instantly. If it’s not an entirely new channel that emerges, it’s an evolution from one channel into another, such as the mobile channel, which has grown exponentially in the last two years.

Published: 26 May 2011

With today’s hastened technology, revenue channels emerge almost instantly. If it’s not an entirely new channel that emerges, it’s an evolution from one channel into another, such as the mobile channel, which has grown exponentially in the last two years.

With each new channel comes an entirely new fee system and distribution network that adds new, sophisticated levels to revenue management. Automation through software is bringing an end to traditional channel management as we know it, freeing up the RM to look beyond channel management, towards new strategies aimed at higher yield and revenue optimisation. Let’s take a brief look at the evolution of channel management to get a better idea of why the “end” is near.

Established channels, sub channels, and intermediary channels add costs. Going back to RM basics, we know that every booking or cancellation accounts for a change in availability. Every channel has its own attendant costs. Each of these costs affects a hotel's yield; thus, in order to maximise every dollar earned through booking, the RM must meticulously manage every facet of every channel. This includes dynamically changing rates for each channel based on availability AND taking into account the associated costs of each channel.

As if that weren't enough, let's throw into the mix non-traditional channels. The phone rings and a customer books three rooms for two nights. The RM, across all channels, must update. Simultaneously, a walk-in books one room for the next three nights. The RM, across all channels, must update. Mere mortals mentally (and physically) simply can't keep up with so many constantly changing variables across so many channels.

You can see where this is going. Effective channel management without the assistance of software is quickly becoming impossible. RMs need to maximise sales throughout a seemingly endless number of distribution channels, and the cost of utilising each channel must be constantly monitored to ensure the appropriate yield. With the rise in the number and complexity of channels, humans simply cannot keep up-they have had to create a better solution to channel management through software. The resulting efficiency and effectiveness of revenue management software platforms have brought a close to channel management.

Software analyses and executes. Through split-second algorithmic processes, computer software performs in seconds what RM's strive to accomplish in hours, even days. Software systems can now analyse real-time market data, constantly adjust rates across all channels based on inventory, and perpetually modify OTA page positions twenty-four hours a day. Software not only executes the RM's yield management strategy, software helps define it.

It's become quite clear that the shift has trended towards automated channel management systems, leaving the old processes to wither away. And, as technology evolves, so too does the software. This in turn has created possibilities for expansion that are seemingly endless. The result? A customised tactical software solution that maximises revenue, and frees up the RM to focus on strategic objectives. Readily available in the marketplace, the RM's tiresome task-filled day just got a lot more productive.

Yes, it's the end of channel management as we know it-not goodbye, but good riddance.

(This article has been contributed by Jean Francois Mourier, CEO & Founder of RevPar Guru).