Property Management Systems (PMS) for hotels: benefits and essential features
With the hospitality industry booming, it's no surprise that the property management system (PMS) has become a must-have for hotels and other hospitality businesses and will grow to USD 8.5 billion in 2034. It became so due to important features and benefits they bring:
With centralized reservation management, staff manage every reservation from one dashboard, removing double-entry and mistakes.
Automated guest profiles allows you to keep track of guest preferences to deliver curated experience at scale.
Integrated billing allows to prevent revenue loss and accelerating departure.
Dynamic analytics allow managers to implement to understand trends and monitor pricing and occupancy.
Multi-property oversight allows hotel groups to be managed from one location.
But why should you switch to a PMS? What features should you look for when choosing one? What are the advantages of the property management system in hotels? How to choose the most appropriate among off-the-shelf solutions, or should you opt for PMS software development from scratch? Are there real-life examples of success after implementing PMS in the hotel industry?
We'll answer all these questions in this article.
What is a PMS system for hotels?
A PMS is a type of business management software that allows you to manage your hotel's daily operations. The PMS system meaning in the hospitality technology market is to support management and the day-to-day running of a lodging establishment such as a hotel, B&B, inn, hostel, or vacation rental.
With the right travel software development company, it can help reduce costs, improve guest satisfaction, and increase profits in this competitive market. According to Moyeenudin, PMSs also boost operational effectiveness, facilitate well-informed business strategies, and simplify data management to boost profits.
A PMS provides a centralized, integrated system for managing hotel reservations, accounting, distribution channels, and other administrative activities. The main function of a property management system in a hotel is to replace standalone tools for various activities with one centralized platform.
In short, a PMS in a hotel is a system connecting many different functions into a single cohesive dashboard. This makes hotel management operations of any scale transparent, manageable, and predictable leading to a seamless experience.
We’ve covered the key meaning and role of a PMS in hospitality. However, you might be asking yourself the main question now. What is property management system’s main advantage and functionality that makes it important for your business? Let’s break it down.
What are the main features of a Hotel Management System?
Hotels management systems come in all forms and shapes, with some more suited to running hostel chains, while others concentrate mostly on running something like a big resort complex. Property owners and managers can use these tools to track guests' reservations, check-in times, room status, daily audits, and more. However, specific features of property management systems depend heavily on their primary user type.
The following are some of the main features of a PMS:
Reservation management
A reservation management system is a software tool that serves the hotel business and is used to handle reservations/ direct bookings for different property types. As Moyeenudin states, it automatically updates availability across all channels, including Internet Distribution Systems (IDS) and Global Distribution Systems (GDS).
The system allows you to track your bookings for hotel rooms or other facilities like conference rooms or meeting spaces to avoid double booking. You can also use this software to create calendars and schedules for your employees and for shift management, so they know when they're working and their responsibilities during those shifts.
Front desk operations
The front desk or front office is the hub of any hotel, so it's crucial to have a PMS that can handle all of the information from guests and staff. In addition, the front-office managers and other staff will be the first point of contact for guests when they arrive at your property. So, having an easy-to-use front-office functionality that allows employees to process requests quickly while keeping track of guest preferences and individual information is paramount for any property management system in hotels.
Front desk employees will use various functions of the PMS systems' front-office module to perform a plethora of practical tasks for internal operations as well. In particular, the hotel's personnel has to be able to see and manually update relevant data, such as guest reservations and the availability of individual rooms. The front desk staff should be able to assist visitors with routine tasks, changing rooms, and updating their reservation details. The team should also be able to manually check people in and out and provide key cards if necessary.
Inventory management
Your PMS software should help you manage your entire inventory, from room types, amenities, and pricing to inventory levels for each room type. You can also use this feature to generate accurate reports based on specific criteria, such as occupancy rates or revenue generation by room type. According to Akanbi, in addition to rooms, other facilities' inventory can be managed by integrating the PMS with Point of Sale (POS) systems. In addition, inventory management helps businesses avoid running out of stock unexpectedly because it helps them plan when purchasing from vendors or suppliers so that they won't run out too soon.
Guest booking
A guest booking module allows you to keep track of all your guests' details, including their name, address, and phone number, as well as their room preferences and any special requests they may have. It also lets you track their payment history to know when it's due for renewal or cancellation. This will allow you to avoid losing revenue from cancellations due to late or additional payments from your guests.
Channel management
Channel management enables hotel managers to track their sales channels, such as online booking sites, third-party travel agencies, and corporate sales teams. This feature helps them understand where their business is coming from, through channel analysis report, so they can focus on those areas that generate the most revenue potential with strategic marketing campaigns.
Order & service management
The Order & Service management module allows you to create different orders, such as room service, catering, laundry, and concierge services. It is a combination of modules that also allows you to create various services for every order, such as room cleaning or laundry, keep track of staff invoicing, shift audits, and provide a hassle-free experience for guests. When a guest places an order, the system will automatically send an email notification to the relevant staff so that they can keep track of all orders and service requests submitted by guests. You can also create customer orders, track their demands, and assign staff members to each order. This ensures that no customer has to wait long for an order or service.
Invoice & payment options
All businesses require revenue management systems. The invoice & payment features allow you to automate and record all financial processes, and expenses incurred by your business, such as food costs, labor costs, management fees, various subscription fees, etc. You can also set up automatic billing rules so that invoices are automatically generated when certain conditions are met (for example: when an invoice period ends). The invoices can be sent electronically or printed out manually and handed over personally to customers upon check-out. To take it a step further, you can also integrate payment gateways to make direct payments easier.
Reports and analytics
Hotel managers need to know what's going on in their hotel over different time periods. A PMS provides data on occupancy rates, room rates, revenue breakdowns, and other important metrics. A good PMS channel manager feature allows managers to drill down into the data and view reports for specific dates or periods, as well as for individual departments within the hotel. Some more benefits of hotel channel management are easy rate parity management and a lower chance of overbookings.
The software may generate reports on a wide variety of topics, including customer data management, hotel occupancy rates over the previous two years or the effectiveness of particular marketing strategies. Financial reports, likewise, may be required for bookkeeping, tax reporting, or even just plain old decision-making.
All of these features form a unique set of capabilities, that both solve existing issues and pose new challenges to overcome. However, at the end of the day, the importance of PMS in the hospitality industry lies in the fact they provide the tools needed to make your business more flexible, cost-efficient, and resilient. It can be an all-in-one solution or a single powerful module, either way it stays crucial your hotel's financial success and exceptional guest service.
There are multiple other advantages of hotel PMS systems. Let's list the key ones.
Advantages of Property Management System in hotels
PMS systems for hotel service help personnel manage guest arrivals and departures, reservations, inventory, employee schedules, accounting, and more. These systems can be integrated with other property management software for hotels, like remote check-in tools, online booking platforms, billing, and human resource management software, to provide a complete overview of your business.
Below, we briefly cover the main benefits of a PMS that help hotels manage their property.
Improved customer service
Loyal guests - that is the endgame for all the business owners in this sector, especially now, in the ear of user-generated content. One of the greatest advantages of property management software is that you can offer better customer service. This happens as you have more information about your guests and their needs. You'll also be able to accommodate special requests from guests more efficiently, and you'll know if you need to send someone over to the room to make repairs or check on something. Tracking each guest's history through a CRM will allow to recognize high LTV customers at once and provide personalized service to them, maximizing upselling and cross-selling opportunities.
On top of that, many PMS platforms allow for guest feedback functionality to facilitate the guest feedback collection and management of guest reviews, comments, and satisfaction surveys. As described by Ashqar, it turns into a vital tool for experience personalization, enabling you to leverage visitor preferences and past interactions to cultivate enduring customer relationships.
The above-mentioned hotel management system features have a direct impact on the increase in your customers' loyalty.
Faster bookings
Because property management systems for hotels track all your reservations in one place, it's easier for staff members to locate available rooms at any time, which means faster bookings for guests. As a result, your revenue will increase if you can meet demand by booking rooms faster and more efficiently than competitors who don't use PMS systems.
Better communication with staff members and vendors
PMS software often includes internal messaging or communication modules enabling seamless communication across departments. Hotel staff can send messages, notifications, or alerts regarding room status, guest accommodation process, maintenance issues, or any other relevant information, especially to synchronize front- and back-office operations.
With an online database accessible anywhere there's an Internet connection, your PMS allows managers and employees access to the information they need. At the same time, they're on-site or off-site throughout the day. As a result, desk staff may spend less time behind the counter and more time with visitors by using remote access.
Not least important is guest communication, as guest contact directly impacts on the guest experience. PMS software can serve as an email platform for sending automated emails to guests throughout their stay, sending reservation confirmation emails, pre-arrival instructions, or post-stay guest feedback collection. Some advanced PMS systems may even include guest chat options that allow real-time communication with guests during their stay.
Increased revenue
PMS software for hotels streamlines your operations and increases revenue by minimizing pricing, billing, and reservation errors. However, your comprehensive B&B business solution will do more than take reservations and streamline communication; it will also track customer information and provide it in clear, actionable reports. These reporting tools help you take a bird's-eye view of your business and see where you're succeeding or where you might stand to make some changes.
Thanks to the wealth of timely, precise information, you can effectively work out your dynamic pricing strategy. Adjusting room rates relying on real-time factors such as demand, availability, competitor rates, market conditions, and other variables will help you maximize your income per booking, no matter the season.
Improved productivity and efficiency
PMS systems allow managers to more effectively manage employee productivity by providing real-time access to the most important information they need to perform their duties. This allows managers to see which employees need assistance quickly, how long it will take them to complete tasks, and when they are available for new assignments.
According to Nirmala, managing property with such software allows for a 63.5% increase in overall hotel efficiency. This highlights the importance of property management systems in hotel operations.
Reduces administrative mistakes
A hotel property management system provides managers with all the information they need in one convenient place, so employees can track down multiple sources and manually enter data into various systems. With fewer errors in reporting due to human error or lack of information from different sources comes greater accuracy, which leads to better decision-making on behalf of hotel management as well as more satisfied customers.
Easy to use and manage your property
A property management system allows you to easily book rooms, check in guests, and receive payments. You can also track your inventory, receive arrival reports, and keep track of upcoming events. This will enable you to focus more on growing your business instead of spending time on administrative tasks.
Affordable solutions
Many PMS products are reasonably priced because they're designed to meet the needs of small and midsize businesses. Some software companies offer free trial versions so you can test their products before making a purchase decision. A good PMS solution will be cost-effective for any-sized hotel or resort business. If you want the best PMS for hotels, you need a complete business solution by COAX that provides comprehensive solutions for all your hotel needs.
Sustainable practices
Implementing a PMS can significantly enhance sustainable practices within the travel business. By centralizing operations and optimizing resource management, PMS software enables hotels to minimize energy consumption, reduce waste, and lower their environmental footprint. Hotel management software features such as automated room occupancy sensors, energy-efficient lighting controls, and paperless check-in processes not only streamline operations but also contribute to environmental conservation efforts. Furthermore, PMS systems facilitate data-driven decision-making, allowing hotels to identify areas for improvement in sustainability practices and track progress over time.
Hotel Property Management System integrations
One of the major benefits of property management systems in the hotel industry is the opportunity to integrate them with the rest of the software toolkit in place and third-party products. More importantly, hotel PMS integration solutions can completely replace some software you might be using, thus reducing the number of licenses you pay for without compromising on the quality of services provided.
For example, integrating PMS and CRM travel solutions (content management function) leads to consolidating your customer data from various sources, improving the experience for all the parties involved. This leads to better outcomes for customers, more personalized services, reduction in errors and duplicate data, and other essential performance improvements.
However, CRMs are by far not the only software with which hotel property management systems can be integrated. Think about billing, personnel management, analytics, online booking aggregators, and reimbursement tools. Also, PMSs can be linked with digital concierge software. It allows to sync guest data, centralize their profiles, show real-time pricing and reliability information, and ensure faster response times. All of these can be integrated (and some replaced by) a hotel PMS through clean API connectors.
Most importantly, travel API integration and connectivity ensure interoperability, scalability, and fault tolerance of property management systems used in hotels, as every module can be replaced or scaled separately, should the need arise.
However, not all of the benefits mentioned above come with all the hotel property management systems on the market. As we mentioned, some tools are geared toward small hotel chains, while others aim at large resorts and offer quite a more robust functionality as well as customization services. Let's take a look at how various types of PMS in hotels helped hoteliers around the globe improve their operational efficiency.
Examples of PMS in hotels
From small hostel chains all the way up to international hotel franchises, the benefits of property management systems are huge and exciting. Let's take a look at some examples.
A chain of hostels in London decided to implement a hotel property management system to improve the service for its 40,000+ visitors yearly. Their major pains were the fear of costly onboarding for a new software platform, the growing number of declined credit card payments from no-show last-day bookings, and an ever-increasing workload due to transactional and other daily tasks, which affected the attitude of staff — particularly desk management — toward guests.
PMS integration enabled this hotelier to automate their team onboarding and staff management processes, reduce no-shows by up to 90% (resulting in around £6,000 monthly in recovered revenue), and save around 16 hours per week per employee due to payment automation. The staff got more face-to-face time with the customers while becoming more flexible with reservations — and the revenue has grown too!
This chain of Portuguese lodging properties was inspired by the Japanese minimalistic hostel concept, where guests have access only to a separate wooden capsule for sleeping, but the freed-up space is used to provide a luxury experience. For example, the flagship property Zero Box Lounge Porto offers guests to visit its two restaurants, three bars, a rooftop terrace, a sauna, and even a library and a movie theater.
However, rapid popularity growth endangered the consistency of Zero Hotels operations, as the conditions differed widely across properties. Thus, the owner faced a need to implement a PMS flexible and configurable enough to ensure easy adjustment to varying conditions across locations. At the same time, this PMS for hotels was supposed to ensure stable and predictable property management.
In the end, the company selected a PMS software that seamlessly integrated with each of their websites and booking channels including Airbnb, Booking.com, Google Hotel Search, and Expedia. Thus, their entire online presence, property reservation, and marketing activities across multiple channels became centralized, manageable, traceable, and repeatable.
As Zero Hotels owner Bernardo Tierstein says, their "experience became much more customer-centric, as we now spend less time doing admin work and have more time for guest services."
PMS integration resulted in a 50% cut in the new staff training time, a 25% increase in bookings across platforms, and up to a 25% rise in ADR at their properties.
AMR is a chain of over 50 hotels and luxury resorts owned by Apple Leisure Group. It used the pandemic crisis as a strategic opportunity to reevaluate its priorities and invest in innovative PMS technology to address every need of its customers, like the contactless check-in process. Naturally, such a huge organization already used some hotel management software. However, both staff and guests found it counterintuitive and ineffective in addressing the challenges of the pandemic.
Yudy Mora, the Product Manager at AMR, said: "Being customer-centered, we concentrated our efforts on transforming mobile access to our services to create a frictionless contactless experience, in contrast with the failures of the previous systems and mobile apps."
To achieve desired, they focused on guest experience management. The selected PMS provided a user-friendly and intuitive interface, which the chain's guests liked a lot. This inspired the management to experiment more and try out new functions connected with activity bookings — ordering spa visits, luxury wines, gourmet dinners, and other luxury services even before arriving at the hotel. On top of that, the management insisted on implementing live guest experience surveys and demanded streamlining financial transactions to increase the company's revenue.
The intended goal of growing the app users by 50% was surpassed with overwhelming speed. Now, 80-90% of guests across 50 AMR properties actively use the app to order luxury services, significantly boosting the company's revenues. The app's average rating is 4.7 out of 5 stars, which speaks volumes about customer satisfaction and the app's usability.
Naturally, all these hoteliers considered several factors when choosing among multiple property management systems for the hospitality industry. Let's list the factors you need to consider to maximize PMS's benefits in your hotel.
ThingstoconsiderwhenchoosingPMSsoftware
Clearly, the importance of PMS in the hospitality technology market is rooted in the wide range of business operations they support. All PMS tools are designed with a list of features and integration options that meet every need of the hotel industry, such as:
A centralized database of all information related to guest check-ins and check-outs.
A centralized booking system.
An integrated billing system.
A detailed inventory management system.
A comprehensive reporting tool that comes with real-time data.
An interface with third-party systems/ applications like financial accounting software and payroll systems.
Integrated accounting modules for charging, processing payments, billing, and settlements.
The right PMS software can help you keep track of your business, manage clients and staff, and stay organized. Before you decide to get a PMS system developed for your hotel, take a look at important factors to consider when choosing PMS tools in more detail.
User interface
What is a property management system in a hotel? It is a unified dashboard for multiple activities. Thus, a good PMS should support a user-friendly interface and allow for intuitive operation by all the stakeholders. This will make it easier for staff members to access the necessary information promptly. The user interface of your solution should come with handy features of hotel management system and be easily customized according to your needs. It should allow you to create new databases from scratch or edit existing ones easily without any hassle.
The interface should also allow you to customize reports based on your requirements without any issues or complications. The ability to export data per your requirements is another important feature that every good property management system must have.
Security features
The security features of a PMS are essential because they protect your data from unauthorized access, modification, or deletion. Security features include password protection, which restricts unauthorized access to sensitive data stored on your computer. In addition, consider an application firewall, which protects against malware attacks from outside sources, such as hackers who try to gain access through known vulnerabilities in applications like web browsers or email clients.
Simple integration with external systems
Your PMS management system should be able to integrate with other third-party apps, such as accounting software or online booking platforms. Integration services allow you to eliminate manual processes and automate critical tasks, making managing your hotel's operations easier. It also helps reduce errors and increase efficiency in data collection and reporting.
A cloud-based approach
Cloud-based solutions offer greater flexibility, business performance, and scalability than on-premise solutions, meaning you no longer need to purchase expensive hardware or upgrade software when your business grows or changes direction. Cloud computing also reduces upfront costs and minimizes maintenance fees over time.
A front-office module
The front desk is the first point of contact for guests, and it must be intuitive and easy to use. The PMS software you choose can handle various tasks and functions, including check-in and check-out, room requests and upgrades, guest relations management functionality, and offline/online reservations. It should also support multiple languages and currencies so travelers can easily understand what they're paying for. If you're offering concierge services or have a separate concierge desk in your hotel, your PMS should also be able to track their activities.
Back-office management module
To encompass various administrative and operational functions that support the overall management of the hotel, take a careful look at the key components included in the back-office module of your PMS. Back-office management should cover administrative, financial, and operational tasks supporting efficient hotel operations. It includes accounting, finance, human resources management, inventory management, purchasing, and reporting. These functionalities streamline internal processes and facilitate accurate financial management, procurement, and performance tracking. As you see, effective back-office operations are crucial for seamless hotel management and informed decision-making but aren't directly visible to guests.
Housekeeping module
The housekeeping functionality within a PMS must enable effective housekeeping management, empowering housekeeping staff to handle room assignments, cleaning schedules, and maintenance requests. In more advanced systems, utilizing the housekeeping module allows hotels to generate detailed housekeeping reports on metrics such as room cleaning turnaround time, staff productivity, and maintenance status. These reports provide valuable insights for optimizing resource allocation, identifying areas for improvement, and maintaining high cleanliness standards.
Reliability
You do not want a system that crashes frequently or performs poorly when there is high traffic on your website because this could result in lost revenue and frustration among users who visit your site often. Therefore, before choosing property management software, ensure it offers reliable performance even under heavy load conditions. It does not crash unexpectedly while visitors browse the website and perfectly handles any booking-related transactions.
Customized PMS software development
Any PMS vendor has its limitations if you choose an off-the-shelf solution. However, you often want a PMS system that will meet all your requirements and be user-friendly for staff and customers. The biggest benefit to using custom PMS in the hotel industry is that you can have it developed specifically for your needs to work perfectly with your business model and be tailored to fit your specific workflow and requirements. The best way to do this is to speak with an experienced software development company like COAX Software, who will be able to guide you through the process of creating a custom PMS software system for your hotel.
What's the future of hotel PMS?
PMS integrated with modern hospitality technology trends should be accessible through the cloud and provide extensive reporting, customization, and integration.
Hotels that refuse to modernize their property management systems may fail to meet the expectations of their guests and staff, which might result in lost profit or even business.
These systems are actively developed by multiple vendors, and the global PMS market revenue is expected to grow from $800 million in 2022 to $1,3 billion in 2028, at a CAGR of 9%. Cloud-based, AI-powered, highly-customizable solutions integrated with a wide range of software tools are available for all market players, from hostels to multinational hostel chains.
Now is the moment to switch to a cloud-based PMS. If you are still using an antiquated, inefficient system or relying on pen and paper or Excel spreadsheets to manage your business, you might face challenges braving the recession. Investing in a cutting-edge PMS will boost your company's performance, make your employees' lives more productive, and help you meet and exceed visitor expectations.
PMS for a hotel: Conclusion
PMS software for hotels has been a boon for the travel and hospitality business. It helps hotels manage their properties, guests, staff, and vendors. As a result, it allows them to improve their revenue by reducing operational costs, increasing the occupancy rate, and improving customer satisfaction.
With so many benefits, all you need is to choose the right one for your business. COAX Software offers customized property management system solutions for hotels, restaurant management software development, travel agency software and much more. Since 2010, we have been developing enterprise-grade software for startups, SMEs, and market leaders. Being AWS and ISO-certified, we can ensure high quality and timely delivery of value-adding products and services.
FAQ
What is a property management system?
Moyeenudin et al. claim that a PMS is application software that facilitates the sharing of information systematically within hotel organizations and provides functionality to help staff manage information relative to work processes, departmental responsibilities, performance, and documentation. Pratt, on the other hand, defines it as a key technological platform that enables multiple operational functions to be integrated into a single platform.
What are the benefits of PMS in hotels?
PMS provides centralized cloud solutions or on-premise dashboards for a transparent overview and management of all activities related to running any type of rental property. This unlocks contactless check-in, service ordering, and housekeeping control. These features improve staff productivity and customer satisfaction. Murphy points out that PMS offers a crucial basis for overseeing everyday operations and hastening employee adoption of uniform hospitality protocols in recently opened hotels.
What is hotel management system key functionality?
The key features of a PMS in a hotel are:
Management of reservations and processing of bookings
Automation of checking in and out of guests
Coordination of room status and housekeeping
Billing and processing payments are integrated
Tracking of the guest profile and preferences
Multi property overseeing properties
Real-time reporting and analytics
Channel manager integration
Tools for communication between staff
What are the issues and challenges of using PMS in hotels?
Yulius and Evelyn draw attention to some challenges. They include staff learning curves, the absence of deployed feature completeness, deficiencies in room assignment repairs, inconsistencies in payment method integration, and communication breakdowns. Guo et al. point out that early adoption always entails built-in evolution as the procedures change and staffing is lean. Also, differences between system capabilities and current operating conditions may arise from gaps in capabilities.
What are the main types of property management system?
According to Van den Berg and Cloete, there are three different types of PMS depending on the deployment: hybrid models that combine both approaches, on-premise systems that offer direct control and customization, and cloud-based solutions that offer remote access and automatic updates. Systems also vary for particular property types and by scale, from standalone packages for independent properties to enterprise platforms for hotel chains.
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