Deliver Superior Guest Experiences and Efficient Operations With the Right Property Management System

Determine the value an effective PMS can have on the business.

Analyst Perspective

The right PMS can provide a competitive advantage

A property management system (PMS) is the core of any hotel, the key to a successful hospitality business. PMSs need to innovate with the rest of the industry to remain competitive and meet modern hotelier needs. It can be challenging to analyze and determine the value of various PMS vendors to decide whether the hotel should switch their PMS. Understanding the various trends in this market, the value of an effective PMS, and vendors will allow hoteliers to better inform their decisions.

Having the right PMS in place offers many advantages for a hotel, reducing the time spent on certain tasks and improving revenues. It’s important to note, however, that those advantages only occur when the system is flexible, simple, and provides control and proper service to guests. If the system and model are selected carefully, the PMS is the most valuable system in any hotel.

Elizabeth Silva
Research Analyst, Gaming, Hospitality, Sports & Entertainment Industry
Info-Tech Research Group

Executive Summary

Info-Tech Insight
To remain competitive and meet modern guest needs, hoteliers must evolve with the market and focus on differentiating capabilities to meet business objectives and goals.

A property management system manages all aspects of hotel operations

A property management system (PMS) is a critical business operations system. This system enables hoteliers to deliver superior guest experiences through hotel management of front-office and booking capabilities.

A central reservation system (CRS) is software that contains the hotel’s availability, rates, and inventory to manage bookings in tandem with a channel manager. It can be considered the main part of a PMS or it can be used on its own. A CRS and PMS can be deployed with different models to suit the needs of the property (e.g. cloud CRS and on-premises PMS).

A channel manager connects the PMS and all other interfaces such as a CRS across multiple channels, including online travel agencies (OTAs), global distribution systems (GDSs), wholesalers, the hotel’s own website, etc. This can be part of the PMS within the CRS, or it can be independent software.

Source: Altexsoft, 2020

Info-Tech Insight
The PMS will store most of the guest data. Accurate data will help differentiate the guest experience by allowing hoteliers to identify the needs and preferences of guests. This will enable revenue optimization through evaluating guest behaviors.

The PMS environment includes various integrations

Understand the PMS environment in depth before evaluating solutions. it’s important to comprehend your specific environment to ensure the PMS solution will integrate with all outlets in the organization’s digital environment.

An effective property management system will deliver superior guest experiences while mitigating risk

A PMS allows hotel properties to focus and improve their daily tasks and operations enhancing overall efficiencies. This will allow management and associates more time to focus on the guest experience and hospitality aspect of the business.

Improve the guest experience

• Reduce time spent on administrative tasks
• Increase online presence
• Improve hyper-personalization
• Enhance relationships with guests
• Improve upselling
• Enable frictionless experiences

Mitigate risk

• Reduce human error through automated tasks
• Efficiently manage distribution channels
• Effectively manage pricing strategy
• Streamline operations through integration
• Improve level of data security

9% of hoteliers believe their guest-facing technologies are better than those of their competitors.
Source: Hospitality Technology, 2022

69% of hoteliers are adding, upgrading, or switching suppliers of their PMS in 2023.
Source: Hospitality Technology, 2023

PMS market disruption is coming from multiple sources

Modern developments have driven digital-first expectations among consumers. Satisfying guest expectations is only possible with the right PMS technology with these capabilities:

• Online bookings through guests' preferred channels
• Self-service check-in (kiosk or mobile)
• Keyless room entry (mobile key)
• Flexible payment options (buy now, pay later or financing)
• Mobile housekeeping optimization (status updates, housekeeping requests, variable services)

However, it’s important to note that none of these features are successful without:

• Flexibility: Give guests the flexibility to do what they want, when they want, through digital means.
• Control: When technology provides guests with control, they can create and personalize their own experience before they arrive. This technology should work seamlessly across devices and channels and provide communication between the guest and the rest of the hotel.
• Simplicity: Guests want technology that’s stress-free and easy to use.
• Service: When done right, technology can make the hotel experience more convenient and reduce service times.
• Common and intuitive: The technology must be omnichannel and the same across multiple properties.

100% of hoteliers currently offer or plan to add mobile reservations, mobile check-in, and mobile room keys.
Source: Hospitality Technology, 2023

65% of hoteliers implement new technologies because of the ease of use for internal and external customers.
Source: Statista, 2021

Technology is the key disruptor in the property management system market

Disrupting factors

Deliver Superior Guest Experiences and Efficient Operations With the Right PMS

To remain competitive and meet modern guest needs, hoteliers must evolve with the market and focus on differentiating capabilities to meet business objectives and goals.

The Disruptors

• The acceleration of digital transformation
• The demand for AI/ML capabilities
• The ability to integrate with other systems
• The speed of IoT development
• The rise of e-hoteliers, resellers, and alternative accommodations

The Solution

1 PMS deployment models: cloud, on-premises, hybrid

Consider the different PMS deployment models, technical requirements, and costs to understand what model best fits the property and its objectives.

2 Value streams, capabilities, and processes within scope

Define the organization’s key capabilities through cost and competitive advantages to comprehend the current organizational state and what it needs from a new PMS, vetted through a value chain analysis.

Hotel value stream

Attract Guest > Service Guests > Retain Guests

Business capability map

PMS processes

Reporting CXM Loyalty

3 Analyzed PMS vendors

Review the vendor functional criteria Info-Tech analyzed for eight key players in the PMS market that have functional viability for various hotel properties.

Consider risk versus reward when deciding whether to buy or build a PMS

Buy

Reward

• Stick to the core business of hospitality rather than becoming a software company.
• Implementation is quicker and easier than building.
• Significantly cheaper to buy an off-the-shelf PMS vs. building.
• Suited for small, medium, and large sized hotels.
• No need for development teams.
• Vendor products can provide in-depth functionality.
• Vendor support can make enhancement easier.

Risk

• Limited customizability, where not all needs may be satisfied (depending on the system).
• Vendor lock-in.

Build

Reward

• Unlimited customization; the system can be built to specific hotelier needs.
• Vendor stability is not a factor since everything is in-house.

Risk

• Heavy financial burden. The probability of technical debt turning into a technical deficit is higher.
• Time consuming to build a PMS from scratch.
• Better suited for large hotel operations (corporate).
• Higher risk associated as the hotel becomes fully accountable.
• Need for frequent updates can take valuable developer resources away from other projects.
• Resources are limited.

Source: CiHMS, 21 Feb 2021