What is a hotel PMS?

Last updated on April 4, 2024

Hotel Property Management Systems (PMS) have become the backbone of hotel operations, driving efficiency and elevating guest experiences to new heights. What began as software to streamline front-office functions—such as reservations, guest services, room assignments, and financial transactions—has transcended its initial scope. 

No longer confined to the realms of administrative tasks, today's hotel PMS is a comprehensive tool that integrates every facet of hotel technology, from the minutiae of daily operations to the overarching goal of crafting unforgettable guest experiences. 

This evolution from a simple operational aid to a holistic business management solution marks a significant shift in how hoteliers approach the delivery of service excellence, setting a new standard for the industry.

What is a Hotel PMS?
At its core, a Hotel Property Management System (PMS) is a powerhouse of technology designed to make hotel operations smooth and efficient. Think of it as the brain behind the scenes, coordinating everything from the moment a guest books their stay to the second they leave feedback after their visit. It’s not just about keeping the day-to-day running smoothly; it’s about enhancing the guest experience every step of the way. In the quest to manage a hotel effectively in today's global market, finding a PMS with the right mix of features is crucial.

This tech marvel extends its capabilities across various domains – from managing bookings and reservations, handling check-ins and check-outs, to overseeing room assignments and guest communications. 

There are two types of Property Management Systems : 

1. Cloud-based PMS

For a modern hotel management system, cloud-based software might be the option. These systems offer easy usage, with functionality at the front of their design. 

2. On-premise PMS software

Though on-premise software has been around for a while, its features are reliable and specialised for the industry. However, these software solutions can be more complex, making usage difficult for new employees.

What are the main benefits of Cloud-based PMS systems?

The cloud offers a more reliable and secure environment for hotel PMS compared to on-premises systems, thanks to regular updates and a secure hosting infrastructure. Its mobility allows for remote management of rates, reports, and operations from any smart device, seamlessly fitting into today's dynamic business landscape. 

Benefits include always being up-to-date without the need for physical hardware, boosting direct bookings through seamless integration with your website and channel managers, enhancing online reputation management, and effortlessly scaling with your hotel's growth without the need for an in-house IT team.

1. Boosted efficiency and guest satisfaction
A comprehensive hotel management system enhances operational efficiency by streamlining tasks such as check-ins, check-outs, and managing POS transactions. It integrates seamlessly with third-party technologies, from channel managers to POS systems, ensuring every aspect of hotel operations runs smoothly.

2. Mobile accessibility 
The shift to mobile-accessible property management systems offers hoteliers the flexibility to manage operations on-the-go. This includes real-time updates on OTA bookings, social media interactions, and comprehensive hotel operations management, ensuring a competitive edge through enhanced responsiveness and guest engagement.

3. Superior guest data management
A robust system elevates guest data handling from collection to utilization. It ensures secure storage and logical organization, enabling targeted marketing efforts and personalized guest experiences that can significantly boost hotel revenue and guest satisfaction.

4. Real-time data for optimal decision-making
Access to accurate, real-time data across all hotel operations from a single platform enables swift decision-making. With open API integrations, hoteliers can leverage the best software solutions available, optimizing hotel operations and maximizing revenue.

5. Cost reduction
By automating routine tasks such as reservations, check-ins, and billing, hotel management systems significantly reduce labor costs. They also minimise the risk of human error, such as overbookings or accounting mistakes, leading to smoother operations and cost savings. This efficiency not only boosts profitability but also allows hotels to allocate resources more effectively towards enhancing guest services and experiences.

6. Environmental sustainability
Transitioning to digital operations with a hotel management system reduces the hotel's reliance on paper for tasks like reservations, guest registration, and billing. This not only contributes to a hotel’s green initiatives by lowering its carbon footprint but also aligns with the growing global trend towards environmental responsibility. Adopting such sustainable practices not only benefits the planet but also appeals to the increasing number of eco-conscious travelers, thereby enhancing the hotel's marketability.

7. Enhanced security 
In an age where data breaches are a significant concern, hotel management systems come equipped with advanced security features to protect sensitive guest information and ensure compliance with global data protection regulations. This includes secure data encryption, regular security updates, and strict access controls. By safeguarding guest data, hotels not only build trust and confidence among their clientele but also avoid the legal and financial repercussions associated with data security lapses.

8. Scalability
Cloud-based hotel management systems offer unparalleled scalability, allowing hotel operations to expand seamlessly as the business grows. This flexibility means that hotels can add more rooms, services, or even locations without the need for substantial investments in new IT infrastructure or software licenses. Such scalability ensures that hotels can respond quickly to market demands, capitalize on growth opportunities, and maintain a competitive edge in the hospitality industry without being bogged down by technological limitations.

Functionalities of a Cloud-Based PMS
Finding a technology partner that can work with you to understand your unique operational issues and then provide you with the technology to solve those issues is the real reason hotel technology companies (should) exist. 

1. Reservations and group bookings
This feature simplifies checking room availability and making new bookings, showing available rooms across all channels, like direct bookings and online agents. It shines with group reservations, guiding users through options smoothly, reducing mistakes. Bookings are neatly organized on a dashboard, with payment processing built in, and confirmation messages sent out via email or SMS.

2. Front desk operations 
The front desk module is all about making life easier for staff, with a clear view of room statuses and streamlined check-ins and checkouts. Features like kiosk or QR code check-ins make going contactless a breeze, while the night audit function provides quick, customisable reports with backups, ensuring everything runs smoothly even when the day is done.

4. Cashiering, billing, and invoicing
Simplify the complex world of financial administration with a modern PMS that tackles everything from cashiering to invoicing. Features like tokenization for secure credit card storage, multi-currency support, quick posting for fast transactions, and meticulous tracking of petty cash transactions make financial operations a breeze. It also includes intricate functionalities like fiscalisation and various types of invoicing (interim, pro forma, advance) to accommodate all billing scenarios, ensuring compliance and efficiency.

5. Maintenance
Streamline both routine and unexpected maintenance tasks with a ticketing system that allows for efficient organization and communication. This system not only automates planned maintenance schedules but also helps in quickly addressing unforeseen repairs, minimising downtime and saving costs.

6. Front desk home screen
The heart of a PMS, the home screen is where all essential information and tasks converge. It offers a customizable grid of applications and shortcuts for easy access to the system's various functions, from notifications to status updates, ensuring everything you need is just a click away.

7. Reporting and analytics
Generate essential reports with ease, offering insights into performance metrics like occupancy rates, average daily rate (ADR), and revenue per available room (RevPAR). A robust reporting function aids in identifying both challenges and opportunities, enabling informed decision-making and strategic planning for hotel growth.

Learn more: How to maximise your hotel’s ROI?

8. MICE Management
Specified MICE functionality offers a centralised database for all related data, making optimising Meetings, Incentives, Conferencing, and Events a breeze. This not only results in up to 71% time savings but also ensures cost efficiency while upholding high service and quality standards compared to traditional methods.

9. Channel management
This feature streamlines the distribution of room inventories across various booking platforms, ensuring real-time synchronisation of bookings and availability. It simplifies promotions and discounts, maintaining consistent rate parity across all channels, thus eliminating the hassle of manual booking management and rate adjustments.

Learn more: What is a hotel channel manager?

10. Hotel online booking engine solution
This tool is a game-changer for direct bookings, enabling guests to book directly on your hotel’s website. It syncs with your PMS, updating crucial booking details automatically. The engine offers guests an intuitive way to choose dates, rates, and room types, suggesting alternatives when necessary to clinch the booking. It also smartly targets upsell opportunities and ancillary sales to the right customers during the booking process, enhancing profitability.

11. Revenue management system (RMS)

RMS applies detailed analytics to forecast guest behavior and adjust service, availability, and pricing to boost revenue. Its goal is to sell the perfect service to the right guest at the optimal time and price, based on a deep understanding of guest value perceptions. Utilizing data from the PMS, competitive pricing, and market trends, 

RMS employs sophisticated algorithms to set the best rates, influencing significant revenue increases, like Lapithus hotel's 30% growth in room-block revenue. It automates pricing adjustments across channels and crafts packages and offers, turning data and analytics into increased revenue.

How to choose the right Cloud-based PMS

Choosing the right hotel property management system is critical to the smooth running of your hotel operation. The size and kind of a hotel property determine which PMS is best because each system has its own core features and add-on modules. The majority of providers are adaptable to various property types and that allow basic components to be enhanced with modules that are necessary for any particular type of business.

The 2021 Smart Decision Guide to Hotel Property Management Systems by Oracle offers a checklist to help hoteliers in making the best choice.

1. User friendly: The more time you need to spend on staff training and transferring, the more complicated and confusing the interface is.

2. Integration options: Make sure your provider supports all required APIs and is prepared to offer integration services if a hotel currently uses certain systems or if you intend to integrate additional technologies.

3. Customer support: Software can malfunction, but it can't have an impact on hotel services. Hoteliers want round-the-clock technical assistance. Look for customer service testimonials from other hoteliers when selecting a PMS, or thoroughly discuss all support conditions with your vendor to make sure that any software outages won't significantly affect your business operations.

4. Customisation: PMS needs might vary according on a property's size and kind. For example, confirm that the PMS vendor can offer this kind of customisation if you want a bed-based management system in the front-office module rather of a room-based one.

5. Cost and ROI: It is important to think about your budget and anticipated return on investment (ROI) before making a decision to upgrade your current software or buy a new property management system. To ensure that the PMS pays off, examine these crucial factors:

  • Time spent on repetitive tasks
  • Reduction in time spent on business operations
  • Effect on revenue and distribution
  • Cost of maintenance and implementation

Cloud-based systems are most commonly available via a subscription pricing model, typically based on a monthly fee, and normally a one-time setup fee. The pay-per-use subscription model makes cloud PMS an operating expense, and while the monthly cost adds up over time, the shift from capital to operational expenditure makes cloud-based PMSs a more affordable option for many smaller properties. 

With a cloud-based PMS, there are no hardware expenses (if your hotel has a computer or mobile device) and software upgrades are included as part of the SaaS rental package. 


What IT requirements does my hotel need to run a PMS?

Cloud-based PMSs runs on a SaaS (Software as a Service) platform located on the internet. This is an innovative and easy way to manage hotel operations with low IT costs. Leading cloud-based PMSs can run off any modern internet-connected device. Is it easy to install?One of the greatest advantages of a cloud-based PMS is it does not need any special installation or downloads. A few clicks is usually all it takes.

Will I need a dedicated IT person to manage the technical requirements of a PMS? 

Cloud-based PMSs do not need dedicated IT personnel for maintenance and other day-to-day running of the PMS because each and every function is executed and the information is stored and processed, off-site, in the cloud. Companies that host cloud services have teams of IT professionals that maintain and manage the system for you. 

How safe is my hotel’s data? 

Cloud software hosts, like AWS, have the expertise and budget to implement robust security measures and procedures, including automatic data backups and 24/7 monitoring. This makes cloud systems a slightly more secure option than on-premise systems for independent properties. 

I have third party systems, software and vendors that I use daily for my business. Will a hotel PMS be able to connect (integrate) to these systems?

 Cloud PMSs can be easily integrated with most third-party vendor systems, especially if they are using common HTNG (Hospitality Technology Next Generation) coding and open APIs (application program interfaces). The good news is that all the serious hotel technology companies use APIs and HTNG. The ability for cloud-based PMSs to integrate to existing technologies greatly reduces the hotel’s IT requirements as you can keep existing technology or add new technology from suppliers of your choice as you are not locked into one vendor-preferred supplier. 

Will I be able to access my PMS anytime and from anywhere? 

Cloud-based PMS are accessible via a secure login from any computer or mobile device connected to the internet, anywhere in the world at any time. Modern cloud PMSs offer a high level of accessibility as they are purpose-built to work via the internet.  

How often will I have to install upgrades and how difficult will it be? 

Upgrades are fast, frequent and usually free-of-charge with cloud-based systems and can usually be deployed instantly. This means that accommodation providers always have access to the latest version of the PMS, including new features and innovations that keep them ahead of the competition.  

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