For those in the hospitality industry trying to run a successful hotel, a robust revenue management strategy is of the utmost importance, and a property management system (PMS) can assist greatly. In this article, you will find the uses of a property management system and read five tips to help you select the right one.

Table of Contents:

What Is a Property Management System?

In simple terms, a property management system, or PMS for short, is an all-in-one software solution that assists hotel industry employees with core tasks like sales, planning, and other day-to-day operations. In modern hospitality, these software solutions have largely replaced traditional paper-based methods. According to the Global Hotel Property Management Software Market Report by Research and Markets, the global hotel property management software market size is projected to reach $14.71 billion by 2030.

Although PMS solutions vary in their precise features, they typically allow hotel leaders and other staff to manage room reservations, restaurant bookings, and basic accountancy information. Moreover, most property management systems allow leaders to track key performance metrics, like ADR and RevPAR.

Video: What Is a Property Management System?

Why Is a Property Management System Important?

The use of property management systems within hotel management has grown significantly over the past decade, especially since cloud technology became mainstream. There are a number of key benefits to using a PMS, including the ability to easily manage your calendar, resulting in fewer double bookings or costly errors.

A property management system will allow staff members to quickly carry out many essential tasks while automating some of the more mundane administrative elements. With so many hotels opting to use a PMS, those who choose to rely on manual management processes are putting themselves at a competitive disadvantage.

Table: Benefits of a Property Management System

Key Benefit Functionality and Impact Competitive Implication
Efficient Calendar Management Streamlines booking processes, reducing the likelihood of double bookings and errors. Hotels can maximize occupancy and revenue, gaining an edge over those using manual processes.
Task Automation Automates routine tasks such as reservations, billing, and guest communication. Frees up staff to focus on guest service, enhancing overall guest satisfaction.
Centralized Data Management Consolidates guest information, booking history, and financial data in one place. Enables data-driven decisions, personalized guest experiences, and efficient operations.
Improved Financial Tracking Offers comprehensive revenue management, invoicing, and reporting tools. Allows for better financial planning and analysis, contributing to profitability.
Enhanced Guest Experience Facilitates quick check-ins/check-outs and personalized guest services. Improves guest loyalty and repeat business by providing a seamless, customized stay.
Maintenance and Housekeeping Coordination Schedules and tracks room cleaning and maintenance, ensuring readiness for guests. Ensures high standards of cleanliness and room condition, directly impacting guest reviews.
Integration with Other Systems Connects with channel managers, CRM, POS, and revenue management systems for seamless operations. Strengthens the hotel’s ability to sell across multiple channels and manage operations effectively.
Access to Advanced Analytics Utilizes data analytics for insights into guest behavior, booking trends, and performance metrics. Supports strategic decision-making, helping hotels adapt to market changes and guest needs.

5 Tips On How to Choose a Property Management System

With many different PMS solutions on the market, each offering slightly different features, selecting the right one for your hotel is important. Below are five tips to assist you with your decision-making process.

1. Carry Out a Needs Assessment

The first step when choosing a property management system is conducting a needs assessment and precisely establishing your requirements. To do this, you need to consider your various operations, processes, functions, and distribution partners, as well as the desirable features of the software itself.

Once you have created a list of your needs and the requirements for your property management system, you should also place each need in order, based on overall importance. This can then serve as a list of priorities to search for when seeking your PMS solution.

2. Establish a Clear Budget

Before you begin the process of choosing your property management system from the various options, you need to work with the finance department and establish how much money you have to spend. Of course, you may find a PMS that is within your budget, but knowing how far you can stretch is important.

When deciding on a budget, those in the hospitality industry need to consider the licensing costs associated with the property management system, the costs associated with setting up the system, and those associated with training staff members. After the budget has been established, stick to it.

3. Find a PMS With a Booking Engine

Revenue management is an important concept within the hotel industry, and facilitating direct bookings is key because direct bookings maximize earnings by eliminating commissions being paid to third parties. According to the Digital Hotel Operations Study by H2c, one-third of bookings are done via direct channels. Therefore, it is crucial that hotels make this booking option as convenient as possible.

While those in hospitality want direct bookings, customers will tend to book based on price and ease of use. For this reason, when assessing the different PMS options on offer, it is imperative that you opt for one that includes its web booking engine and that the booking engine itself is both reliable and user-friendly.

4. Learn About the Support Provided

Next, you need to find out about the level of support offered by your property management system provider. If something goes wrong with the system, if your staff is having problems using it, or if new features are added that require explanation, you need to know you can rely on them to help.

When assessing the level of support, you need to think about the following: how is support provided? Is there support for your language? Are there online tutorials available? Can you speak to a live agent? What days and times can they be reached? Is there any provision for in-person training?

Property Management System - Learn About the Support Provided

5. Read Reviews From Real Customers

Finally, it is important not to take providers’ word about their PMS solutions simply. Instead, you should conduct independent research on their products and determine what their existing users or customers say about them.

Check online reviews, look at their social media accounts, and get a feel for people’s experiences with them. If you only see negative feedback, complaints about customer support, or an abundance of software issues, it may be sensible to look elsewhere instead.

Property Management System FAQs

A property management system, or PMS, is a software solution used in the hotel industry for hotel management. It is typically associated with front office operations and allows hotels to manage bookings, process payments, carry out admin tasks, oversee guest services, and handle check-ins and check-outs.

Prices of PMS software can vary dramatically depending on the features and target audience. Most modern PMS solutions are provided on a Software-as-a-service (SaaS) basis. Software may cost around $100 per month for small hotels, while large hotels could pay upwards of $1,000 per month. There may also be initial setup fees to consider.

Property management systems are a centralized platform for managing various aspects of a hotel and allow for cross-departmental collaboration. Although primarily associated with the hotel front office, a PMS may be used by others, including managers, housekeeping staff, marketers, and senior executives.

A POS or point of sale system is designed to process payments and manage transactions. It is a point at which customers can purchase goods or services. By contrast, a property management system is a more comprehensive management system that is used to oversee broader hotel operations.

When hotels talk about PMS experience, they refer to understanding the PMS system and how it works and having first-hand experience using such a system. When hotel staff have PMS experience, they know how to interact with the system to manage tasks, improve the guest experience, and boost operational efficiency.

A high-quality property management system (PMS) can be extremely useful in assisting hotel owners and leaders implement a robust revenue management strategy. By following the five tips above, you should be able to find a PMS solution that suits your hotel’s specific requirements.

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This article is written by:

Martijn Barten

Hi, I am Martijn Barten, founder of Revfine.com. With 20 years of experience in the hospitality industry, I specialize in optimizing revenue by combining revenue management with marketing strategies. I have successfully developed, implemented, and managed revenue management and marketing strategies for individual properties and multi-property portfolios.