2023 Hotel Property Management System Buyer's Guide

Hotel owners and operators worldwide are facing challenges today – from staffing shortages and rapidly changing consumer preferences. Technology provides the flexibility that hoteliers need to succeed in this environment, helping them communicate, collaborate, and adapt more effectively.

Although the industry had embraced digital innovation long before the pandemic, the pace of change requires a constant evaluation of tools and processes to accommodate the ever-changing circumstances.

Our research showed that 80% of hotel executives say that property management systems are the most important hotel technology today. A majority said it’s their largest software budget item. However, not all systems are created equal, and what works for one property may be the wrong fit for another.

That’s why we wrote this guide: to help you understand your hotel’s needs and identify what system will support you best.

What a property management system can do for your hotel?

The benefits a property management system (PMS) provides a hotel are diverse and significant. A PMS can automate routine tasks, which helps you do more, faster. It also allows you to track all operations, from inventory to administration to accounting, create reports with ease, and use data to improve your operating processes.

These are some of the benefits you can expect:

Operational Efficiency

Managing everything from a single place helps you do more, faster. For example, a modern PMS can integrate multiple systems necessary for check-in, allowing front desk staff to create a room key in a single step, as opposed to a traditional multi-step process that also required manual input.

Better Team Coordination

An integrated PMS allows you to automate things like housekeeping tasks. Mobile support means the whole system will be at your fingertips on your smartphone or other devices.

Reduced Risk of Errors

A modern, integrated PMS is continually updated as guest information changes, preventing potentially embarrassing or expensive mistakes. It also reduces the risk of human errors such as double bookings and missed reservations.

Enhanced Guest Experience

A PMS helps boost your guest satisfaction by allowing you to save guest preferences that you can use to create personalized experiences, offer fast and seamless service in line with their expectations, and give them more control over their stay through automated services such as contactless check-in and check-out.

Competitive Edge

The pandemic has accelerated travelers’ expectations for seamless tech-enabled experiences, and operating off a modern property management system is essential for building and maintaining a competitive advantage in today’s environment.

Key property management system trends

Over the last decade, we’ve seen a shift from PMS systems that aim to do it all to systems that are more open and allow hoteliers to choose which point solutions are the best fit for them.

The use of integrations enables increased personalization and customization of services for hotels. It is now possible to deliver all-encompassing experiences from the moment guests make their booking. That also means that, through the PMS, hoteliers can easily monitor all aspects of guest experience and use the data to make improvements. The more we know about our guests’ inquiries, activities, and preferences, the better we can cater our offers and services to them. In 2022 and beyond, relevance will belong to those who nail guest satisfaction.

Support for automation is another trend that’s gained speed over the last few years, with challenges in the hospitality labor market and increased guest expectations for speedy service. Modern PMSs enable better software connectivity between hotel systems, allowing hoteliers to achieve more with less.

While some PMS software companies still offer on-premise solutions, a modern PMS is cloud-based and easily accessible from any computer or mobile device. The costs of maintaining a cloud-based PMS are typically low, and updates are instantaneous, so you always have the latest version of the software.

Another trend we’re seeing today is an increased focus on usability. Next-generation property management systems are intuitive, with an easy-to-use interface, and designed to support staff productivity.

But mobile technology isn’t only crucial when it comes to operational efficiency: the pandemic has brought on a surge of mobile guest-facing tech that is here to stay. Supporting features such as contactless check-in, among other self-serve options, not only promotes safety but give guests flexibility, which translates into greater satisfaction. Artificial Intelligence (AI) is also becoming increasingly popular, especially AI chatbots used to manage communications and improve customer service.

Streamlining operations and modernizing services is in line with guests’ expectations as well as hoteliers’ needs; the latest-generation software solutions also help with direct business growth through seamless website integration and a direct online booking engine.

Finally, this generation of hotel operating software will be more durable or “future-proof” than its predecessors, which makes it a valuable investment that will continue to bring results as time goes by.

Integrations

The ability to integrate their property management system with other third-party hotel technology systems is a top priority for many hoteliers today. Our Survey of Hotel Executives conducted by Benchmark Research Partners representing brands with between 10-500 properties in North America, Europe, and Asia showed that:

More than 80% of respondents expect their PMS provider to focus on integrations
More than 50% consider integrations one of the critical values a PMS provides
Nearly half of hoteliers today are dissatisfied with the support of integrations by their current PMS provider.

A PMS needs to be able to integrate with all other systems that are necessary for running a hotel in order to streamline operations across all departments. This allows you to work with any vendor without needing to duplicate data between PMS and other software manually. By the same token, a PMS system that isn’t well-integrated could slow down your entire operations. Integrations enable service customization and personalization by monitoring all aspects of a guest’s stay from the moment of booking.

All this means that, ideally, you need a provider who offers proper integrations that could be easily connected, with a big enough and regularly updated app store. And it’s not enough for the vendor to make such claims—you need to do due diligence and check in detail what integrations are supported within the suite your property requires. For example:

Are the integration partners verified?
What is the expected cost and time to integrate?
Do add-ons require a separate contract?
Are there any plug-and-play options?

Defining your needs

As you start assessing and defining your PMS needs, one of the crucial questions to ask yourself is whether your property is prepared for what’s coming in 2023 and beyond.

In terms of travel requirements, the pandemic has introduced new trends and accelerated others. Safety is no longer what it used to be, and one of the consequences of that change is that hotels around the world are going contactless. Even as people return to in-person travel and activities, we will never go back to the pre-Covid state simply because the industry has moved forward.

Many of the solutions hoteliers have adopted during the pandemic—improved connectivity, contactless services, virtual and hybrid events, and tools that boost efficiency—are here to stay. Technology has given us new opportunities to be more efficient at a greater scale of business, and no one—our guests, employees, and industry partners included—can go back to the old ways of living, working, and traveling. As you evaluate property management systems, it is critical to find a provider who has an in-depth understanding of the industry and the role of innovation.

Another factor to be mindful of is two-fold: what does your staff need from a property management system, and what do your guests need?

Often, decisions are made at the executive level without understanding the workflow and needs of line staff, which ultimately means that certain operational demands remain a blind spot. Without consideration for these, hoteliers will not be able to ensure that a PMS offers the most effective solution for their business.

Hoteliers must also strive to understand the evolving needs and expectations of guests. For the modern traveler, speed and functionality are non-negotiable, and the answers to most questions should be easily accessible without needing to send an email or pick up a phone.

Guests also expect more personable experiences and communication before, during, and after their stay. Taking the initiative to send guests carefully crafted personal messages and messages about safety, upgrades, and things to do sets your hotel apart. The more you can streamline operations with a modern PMS, the more time your staff will have for providing personalized service and purposeful communication.

These examples clearly illustrate that a guest-oriented PMS gives you the right tools to make your customers happier. Again, consider your specific goals in the guest satisfaction area (personalized communication, smoother check-in, and check-out, and modernized room service, among others) because they determine which integrations your PMS solution will need to have.

As you rethink the challenges your PMS should help you solve, remember the following categories:

Multi-property Functionality

If your property belongs to a hotel group, your PMS deployment and onboarding process should be straightforward, and the provider should have remote training in place to help you hit the ground running with each new hotel.

Employee Productivity

The industry continues to grow, turnover rates remain high, and employee expectations keep changing with the times. Automation can help a property eliminate simple manual tasks (email confirmations, updating inventory, processing payments, etc.), achieve more with less, and thereby boost staff productivity, satisfaction, and retention. Consider the differences between various PMS system solutions concerning automation and employee retention.

In-person & Remote Training

A high turnover means that properties have a constant need for training, which affects their operational budget. It is, therefore, worth considering how easy a PMS is to learn as well as what kind of training options are offered by the vendor. Ideally, they will provide regular training support, including e-learning with self-paced modules in addition to on-demand live training.

Questions to ask PMS providers

As there are many vendors—and options—to choose from, picking the right property management system requires careful consideration, research, watching demos, and speaking with vendors.

Before starting this process, take note of all your requirements (must-haves as well as nice-to-haves) and consider the issues your current PMS may not be solving.

In the last few years, property management systems have significantly advanced in their ability to serve hotels as a “central control hub” with the guest experience at the center. When choosing a technology partner, look for a reliable and innovative provider with whom you will be able to work long-term. It is also wise to look beyond your current needs and consider the features your property will need several years from now.

The following list of questions could be a good starting point as you begin evaluating different PMS solutions.

Is the property management system cloud-based?

While legacy property management systems used to require weeks of on-site training and installation, modern PMS software solutions are cloud-based, which makes setup much faster and upgrades pushed as they are ready with no system updates required. For many, a cloud-based PMS is not only more affordable but also more reliable and more scalable.

How well does it support integrations?

Integration is the capability to connect and operate with other software seamlessly. With the advent of cloud architecture, connecting third-party platforms to your PMS has become straightforward. When looking at different PMS options on the market, remember that integrations should be simple and intuitive.

Does it support your online booking engine and channel manager?

A booking engine and channel manager integrated within the PMS allow real-time updates of reservation trends and rates, enabling you to manage all your sales from one place. Through the booking engine, guests can check rates, room availability, and offers, and make direct reservations.

Is it user-friendly?

The current workforce largely consists of digital natives who expect their platforms and devices to be intuitive and easy to use. If a PMS interface is too complex or confusing, it will result in staff frustration, higher turnover, and longer training times. Learning how to use new PMS should require no more effort than learning to use any social media tool.

What kind of reports are available?

Crucial to strategic planning and the assessment of overall hotel operations, reports, and business intelligence is another major feature to understand. What kind of reports does a PMS provide, and would those be helpful to you as you evaluate your property’s operations and performance?

Does it support dynamic rate management?

Rate management used to be a stress-inducing, time-consuming task. A latest-generation PMS will make this smoother by supporting your revenue strategy, making responding to constant fluctuations in guest demand as easy as clicking a button. It also allows you to optimize your offer, set rates automatically, and much more.

What is my total cost of ownership?

Your cost of a property management system is more than just the standard “per room, per month” fee – it’s training, integration, maintenance, and more. Be sure to account for each of these items.

Evaluating support

Our survey showed that a third of hotel executives were dissatisfied with the support from their provider, which makes customer support one of the focal points in your decision-making.

As you compare different providers, find out what their customer service is like and when and how you can work with them if things go wrong or you need help.

Given that cloud-based systems are normally deployed over the internet, look into what kind of support you can expect from the provider during the set-up and data migration stages. How about post-setup? What training materials do they provide, and what can you expect when adding new or needing to troubleshoot existing integrations?

Ensure you check reviews from other customers and whether the provider offers client support 24 hours a day, seven days a week, 365 days a year. The PMS is a business-critical tool, and it’s important to find out how quickly you could reach them if you run into problems because if the system goes down even for a short while, this could negatively impact your guests, your team, and the revenue.

Finally, if you experience issues that seem unsolvable or if you have questions or doubts regarding your PMS performance, make it a point to share them with your technology partner.

Consider designating one of your team members to handle all communication with your PMS provider and stay on top of the latest updates by attending webinars and other training offered. Besides a smooth user experience, actively engaging your provider can help ensure you utilize the software’s full potential.

Costs & pricing factors

What does a property management system cost? Pricing varies considerably, especially when you consider the total cost of ownership. The number of rooms, types of integrations and modules, installation expenses, support fees, and training costs all factor into the total amount you’ll pay.

To help you understand the costs associated with buying a PMS, it helps to understand these main pricing components further.

Let’s start with the primary pricing variable for most property management systems: the number of rooms your property has. The more rooms a property has and the more properties using the software, the higher the price.

Other pricing factors include per-user fees, as some platforms calculate costs based on how many users you register with the software and a flat-rate monthly licensing fee that never changes.

In terms of the billing cycle frequency, some companies charge monthly fees, and some are billed quarterly or annually. When choosing the option that best fits your property, consider whether the overall savings justify annual payments or if you might benefit more from the flexibility of the monthly billing.

As for additional services, there is a whole range of services that may or may not have an extra charge to them, so make sure you ask the following:

What kind of post-sale support is included?
Are onboarding services included in the package or billed separately? Are maintenance fees included?
Is the cost of the training included, and what does training entail (personalized and on-demand web training, tutorials, etc.)?
What modules are included, and what comes at an additional cost?

Property Management System Buyer’s Guide