When to Upgrade Your Hotel Property Management System

By Jeff Zabin

Last updated April 27, 2020

3 min read

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23% of hoteliers who have not upgraded their PMS within the past 3 years plan to do so in the next 12 months

According to The 2017 Smart Decision Guide to Hotel Property Management Systems  (released last month and now available for complimentary access), the vast majority of hoteliers believe that next-generation hospitality technologies are the number one way to catapult their businesses to ever-higher levels of operational performance and guest satisfaction.

Given that the property management system (PMS) is at the forefront of these technologies, it's no surprise that nearly one-quarter (23%) of hoteliers who have not upgraded their PMS within the past 3 years indicate that they plan to do so in the next 12 months.

The most advanced of these solutions have evolved by leaps and bounds in recent years. Driving technology innovation has been a mass migration to the cloud. This has led to increased software interoperability, data integration and mobility.

As a result, hoteliers can now manage, track, analyze and optimize the constant flow of information across all parts of the property “ anytime, anywhere, and in a real-time fashion.

By integrating with add-on modules and third-party solutions, a next-generation PMS allows hoteliers to readily create a property- or chain-wide system. They can centrally manage virtually all functions and departments, from concierge, guest services and banquet and conference functions to housekeeping, room maintenance and security management to golf, spa and other facility functions.

According to the research, 91 percent of hoteliers "agree" or "strongly agree" that platform interoperability is an important success factor for hotel performance improvement. At long last, the grand movement to unify the disparate and fragmented technologies and data siloes that has been underway for years, even decades, is now an achievable goal.

Standalone hospitality software solutions that fail to "talk" with one another are a dying breed. In their place, hoteliers are deploying technologies that can connect with the PMS and seamlessly share data in the cloud. These include the central reservations system or channel manager, the revenue management solution, the point of sale (POS) system, the guest response platform and the CRM and guest loyalty applications.

A next-generation PMS also integrates with accounting software, keycard and access control systems, self-service kiosks and guest communication and entertainment applications. And the list goes on. Combined, these technologies can automate virtually all functions across the property ” and, if required, across multiple properties ” in a unified and integrated fashion.

All of which begs the question: When is the right time to upgrade your PMS? The answer, as with many things in business and in life, is: It depends. For starters, different hoteliers will have different requirements of a PMS, depending on their property size, category and topography.

A full-service hotel, for example, will likely require a far more robust and comprehensive system than a small, limited-service hotel, which may need only to automate basic functions like guest bookings, housekeeping, guest charges and maintenance management. A full-service hotel will likely have complex reservation, scheduling and inventory requirements, with a host of features they view as essential to support exceptional guest service. A small, limited-service hotel may have none of these requirements.

Every hotelier under the sun, on the other hand, can benefit from more and better insights that can be used to drive revenue growth and improve the quality of the guest experience. The ability to delve into the mountains of PMS data to produce year-over-year evaluations, identify emerging market trends, analyze guest behaviors, etc., is a compelling benefit of a next-generation solution. In fact, almost three-quarters 73 percent of hoteliers view the ability to improve performance reporting and business intelligence as one of the biggest benefits one can expect to gain with the right PMS.

What does the revenue forecast look like? How can we improve it? How are guests finding our property? What channels are they using to book reservations? Where are groups coming from? What are the margins on each channel? How well are we managing our labor costs? How well are we managing our reservation distribution channel inventory and pricing strategies? How can we capture more ancillary revenues?

These are just a few of the mission-critical questions hoteliers should be able to answer quickly and accurately. If the current system falls short in enabling them to do that job due to technology shortcomings, then it may well be time to upgrade to more advanced platform capabilities.

Before embarking on the research-and-buying journey, hoteliers should gain a clear understanding of their own technology requirements and weigh them accordingly. An Evaluation Checklist, such as the one provided in Chapter 2 of the new Smart Decision Guide (click here to access), is a good place to start.

Hoteliers should also gain a sense for the extent to which an advanced PMS would likely improve operational efficiencies and the overall quality of the guest experience. This will help determine which solution best fits their needs and is most likely to deliver the benefits they seek.