How to Choose the Right Property Management System for Your Hotel Business

A property management system (PMS) is a program, either accessed through a Web browser or installed on an on-premises computer, designed to simplify front-desk routines such as taking bookings, managing room inventories and handling customer information. While the smallest accommodation venues might be able to get by just fine with nothing more than an Excel spreadsheet or even an old-school handwritten reservation diary, a PMS gives your business far greater capacity to grow. Smaller hotels typically opt for an all-in-one PMS that automatically processes bookings and displays them in a calendar.

What Are the Benefits of Having a Property Management System?

While smaller venues, such as guesthouses, pensions, and hotels with around ten rooms or less can do just fine without having a specialized solution for managing bookings, any larger and/or growing business can benefit enormously by using the right computing system. Although the world’s best-known hotel chains tend to use proprietary systems of their own, there are many third-party PMSs, such as innRoad, Propertyware, Rezlynx, WebRezPro and front desk Anywhere. However, regardless of which option you choose, it is important that you consider the big picture, which concerns using such a system ultimately to save time and increase revenue.

Smaller hotels, in particular, will typically be better off going for an all-in-one PMS that manages front-desk procedures, sales channels, guest communications and international bookings. Such a system should allow you to view and manage a reservation calendar, remember returning guests, quickly print out invoices, add extra items on a per-room or per-guest basis and provide you with immediate availability updates. However, an all-in-one PMS is not just about front-desk management – it can also help you to measure and improve by providing you with important statistical information, such as occupancy rates, best customers and the best performing online booking engines.

Cloud vs. Local – The Great Debate

The first electronic property management systems were all packaged in the form of locally installed software running on standard desktop computers behind the front desk. However, as with many modern businesses, recent years have seen an enormous and unprecedented shift towards cloud-based solutions. Most of today’s hotel management systems are cloud-based, meaning that they are accessed through a Web browser, and all data, such as booking information and customer details, is stored remotely on the servers maintained by the service provider in their data center. However, some hotels, regardless of their size, continue to stick with the more traditional and familiar route that is on-premises computing. The debate between cloud and on-premise computing is a fierce one, but the correct answer is not so much about a matter of opinion, but about what best suits your particular business.

Which Hotels Should Have a Local PMS?

A server-side PMS is installed on hardware on the premises and, as such, it requires a significant amount of expensive on-site hardware to run that, in turn, needs regular maintenance and the occasional upgrade. Although very small venues that only need a single front-desk computer typically don’t need to have an independent always-on server as well, most venues will need a lot more equipment than that. A typical setup that utilizes an on-site PMS will make use of the following hardware:

 A server for storing things like reservation data and the PMS software
 One or more front-desk computers able to access the server
 A data backup system, preferably featuring redundant storage
 A developed networking infrastructure

Larger venues may need multiple servers, particularly since it’s generally safer and more reliable to have one server dedicated to running the PMS. Regardless of how many servers you have, either virtual or physical, you’ll want to have centralized management, meaning that you can easily and immediately access information from any device connected to the network. Hotels with multiple property locations will also need to use a terminal server system, such as Citrix, for centralized management and remote access. Finally, a separate data storage system for backup is crucial, though you’ll probably want to use a cloud-based solution for this.

Aside from the necessary hardware and software licenses, you’ll also need someone on-hand to maintain the system. After all, should something go wrong, a business can quickly grind to a halt. As a hotel business, you’re not likely to be in a position to employ a full-time IT technician, so you’ll need to have a contract with a local IT support firm that is available on call at all times should a problem arise.

Server-side PMSs require a significant up-front expense, as well as the on-site expertise to set them up and maintain them. However, they present some important advantages over cloud-based solutions, including better functionality with large volumes of data and computing operations, no reliance on your Internet connection and, in theory at least, better data security.

Most importantly, if your venue exists in a location where the Internet is either unreliable or very slow, an on-site PMS is essential. After all, even a short outage can wreak havoc for a hotel that relies solely on a cloud-based system. For this reason, most accommodation venues located in remote areas, where bandwidth is typically limited, or in many regions of the world where the Internet connection consistently drops, will need to be able to rely on an on-site PMS. Aside from these situations, all but the largest hotel chains, which often handle vast amounts of data, will typically be better off opting for a cloud-based system.

Which Hotels Should Have a Cloud PMS?

These days, the overwhelming majority of small- to medium-sized hotels use a cloud-based PMS. These systems are accessed entirely over the Internet, typically through any conventional Web browser. As such, no software, other than the operating system and browser itself, needs to be installed on the local computer. Unlike with a server-side environment, all of your data, as well as the PMS software itself, is installed on the servers in the service provider’s data center. In terms of actually using the software, however, the experience is much the same as running locally installed software.

The most obvious advantage of a cloud-based PMS is that it requires minimal on-site hardware which, in turn, means lower up-front costs and significantly reduced maintenance and electricity bills. You won’t need any server hardware or high-end workstations. Instead, basic office computers or even barebones thin-client machines will be perfectly adequate for your front desk. Additionally, the only networking equipment you’ll need is a broadband router, just like the one you have at home. Nonetheless, due to the complete reliance on the Internet of such a system, it’s also wise to have a second, backup Internet connection available.

One of the biggest concerns that businesses have regarding cloud computing is security. After all, it’s understandable that many businesses think they are in a better situation to look after their data themselves than by leaving a third party with the responsibility. However, contrary to popular belief, the cloud is, in practice, generally a safer place for storing confidential business data. Aside from there being a far smaller on-premises attack surface insofar as malware is concerned, any reputable cloud-based PMS should have all of the resources necessary to keep your data safe, including redundant data center storage, 128-bit data encryption and, of course, physical security around their hardware.

Among most contentious issues surrounding any kind of cloud computing is whether or not the total cost of ownership (TCO) is actually any lower. While service providers will, unsurprisingly, always tell you that cloud computing is cheaper, this isn’t always the case. After all, the monthly subscription fees demanded by a cloud-based service can, in some cases, overtake the costs of having an on-site PMS over a period of years. Nonetheless, there’s no denying that a subscription payment model, requiring only a minimal upfront investment on hardware, is easier on the cash flow of almost any small- to medium-sized business.

What’s the Best Option?

The most important thing to remember, despite the hype around cloud computing in general, is that there is no one-size-fits-all approach. The best option depends on the individual circumstances of your business as well as its long-term goals, the size of your property and the number of locations you have. However, cloud-based systems present the logical solution for an increasingly connected world, and they’ve made full-scale information technology operations far more accessible to smaller businesses with limited budgets. At the same time, however, nothing beats the potential flexibility, control, performance and reliability of an on-premises system, and nothing ever will.