22. May 2024

Everything hoteliers need to know about property management systems

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A hotel’s property management system, or PMS, is a crucial component of a hotel’s tech stack. It handles everything from reservation and guest data to distribution and payments.

Everything hoteliers need to know about property management systems 

Are you still using spreadsheets to manage reservations? Logging into individual OTA extranets to update rates and availability? Having to visit the property to check up on operations and report on performance?

A hotel’s property management system, or PMS,  is a crucial component of a hotel’s tech stack. It handles everything from reservation and guest data to distribution and payments.

The right PMS makes a hotelier's life a breeze, automating processes and eliminating tedious, manual work. The wrong PMS, however, can be a hindrance, making it difficult to conduct even the simplest task. 

In this article, we explore the basics of property management systems, including the difference between cloud and on-premise, features to look for, and how to choose the best PMS for your property. 

What is a PMS?

A property management system (PMS) is a comprehensive platform designed to manage and streamline a property’s operations. Many hotel functions flow through the PMS, from reservations and guest services to distribution and housekeeping. 

A hotel’s PMS should automate and streamline operations, increasing revenue and enhancing the guest experience. 

On-premise vs. cloud-based PMS: What’s the difference? 

When deciding on a PMS for your property, you’ll first want to consider whether you want an on-premise or cloud-based system. First, we’ll define what each means.

An on-premise PMS is installed locally on a property’s servers and computers, meaning that all software and related data are housed physically at the property. 

When deciding between an on-premise or cloud-based system, you’ll want to consider the following questions. 

Scalability - how well will the system grow with the business?

    On-premise systems can be challenging to scale as they require significant investments in hardware, software licenses, and IT support. 

    Cloud-based systems are inherently scalable as you can easily add more users, and features are continually added without complex upgrades or installations. 

Integrations - how well will the PMS work with other systems? 

    Integrating an on-premise PMS with external systems like a channel manager or booking engine can be time-consuming and expensive. 

    Cloud-based systems offer easy integrations via APIs, and many providers have established integration partnerships that provide easy and seamless connections. 

Cost - what fees should be considered?

    The initial setup costs for an on-premise PMS can be substantial, including expenses for hardware, software licenses, maintenance, IT staff, etc. 

    Cloud-based systems typically operate on a subscription pricing model, billed monthly or annually, reducing the need for large upfront investments. 

Access - how do staff and management access the system?

    Access to on-premise systems is generally restricted to the property (remote access is possible but requires a significant technical setup) 

    Cloud-based systems can be accessed from any device with an internet connection, enabling management and staff greater flexibility. 

An increasing number of properties are migrating from on-premise systems to cloud-based systems due to the flexibility and ease of use. 

What to look for in a property management system

Depending on your size and property type, the functionality you’ll need from a PMS will vary. Here are some essential functions to prioritize when looking for a system. 

    Front desk operations. The PMS empowers front desk staff by streamlining check-ins, check-outs, and room assignments. By accessing stored information, staff can provide personalized experiences and anticipate guest needs even before their arrival.

    Distribution. The PMS handles the reservation process, seamlessly connecting with booking engines, channel managers, and CRS, making booking, modifying, or canceling reservations easy for guests. It also keeps track of room availability and manages guest preferences.

    Housekeeping optimization. Assigning tasks, tracking room statuses, and prioritizing cleaning schedules are core functions of the PMS. Effective communication between housekeeping and front desk teams ensures timely room turnover, enhancing overall guest satisfaction. 

Consider a PMS with integrations into dedicated housekeeping tools like Sweeply for optimal housekeeping operations. 

     Automated payments. PMS software automates billing processes, generates invoices, and facilitates payments. Integrations with payment gateways and accounting systems streamline financial operations, contributing to efficient revenue management.

     Data-driven reporting. Hoteliers rely on data insights. A PMS offers comprehensive reporting and analytics tools, providing valuable information on occupancy rates, revenue performance, and guest preferences.

    Robust integrations. A PMS acts as a central hub for operations, with a ton of data flowing in and out. For optimal performance, it must have seamless, two-way integrations with other tools, including point-of-sale (POS), customer relationship management (CRM), and revenue management systems.

Getting started with a new PMS

Implementing a new property management system can transform a hotel’s operations and lead to significant revenue growth. Here are some key steps to follow to get started as quickly as possible with a new system. 

    Define requirements. Have a clear understanding of what you want in a property management system. If you’re unsure, research reputable sites like HotelTechReport and Capterra and book demos with high-ranking vendors to get an idea of what’s on the market. 

    Consider all of the tools and systems you use. Note the tools and systems you need your PMS to integrate with. From channel managers and booking engines to revenue management systems and customer relationship management systems, your PMS provider should be able to seamlessly connect to the tools you need. 

    Determine your budget. Consider both initial and ongoing costs when determining your budget. When selecting a vendor, it’s essential to consider what functionality is included in the system and whether the price tag fits the platform's value. 

    Find a trusted partner. Choosing the right vendor is as important as selecting the right system. Look for a vendor that invests in its product and offers support through 24/7 assistance, training resources, and more. 

    Get your team onboard. Involve your team as early as possible and ensure you have the proper training and support to get everyone up to speed. Clearly communicate the new system's benefits and include key stakeholders in the selection and implementation process. 

Choosing the right PMS 

With the right property management system, prepare to see your business become more efficient, increase revenue, and deliver memorable guest experiences. Be thorough in the selection process and ensure you choose the right system for your hotel. The right system should be scalable, offer connections with other applications, and be easy to adopt and train new staff members. 

Boilerplate: Cloudbeds is the leading platform redefining the concept of PMS for the hospitality industry, serving tens of thousands of properties in more than 150 countries worldwide. Built from the ground up to be masterfully unified and scalable, the award-winning Cloudbeds Platform brings together built-in and integrated solutions that modernize hotel operations, distribution, guest experience, and data & analytics.

Author Bio: Lana Cook is a Content Specialist at Cloudbeds where she is able to combine her love of writing and passion for travel. She has spent the last few years writing about all things technology and the ways in which it can be used to help lodging businesses grow revenue, streamline operations, and deliver more memorable guest experiences. 

Lana Cook - Content Specialist at Cloudbeds

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