What is a Hotel PMS? All about Hotel Property Management System

How Hotel PMS Helps for Hotel operations

A Hotel property management system (Hotel PMS) is a software that helps hotels efficiently organize, schedule and manage their daily operations. It enables hotels, both small & independent and groups to handle front office workflow including booking, guest check-in & checkout, assigning rooms to guests, delegating housekeeping tasks and billing etc. Also referred to as a Hotel Software and working as the nerve centre of hotel operations, it ensures the seamless flow of interdepartmental information. This helps hotel staff to better coordinate the operational functions across all the departments. In simple words, a hotel PMS automates and streamlines operations, saves man-hours and helps serve guests better.

Who works on a Hotel PMS?

Be it a hotel’s general manager, front desk employee, housekeeping staff or even the POS outlet staff, almost everybody works on a Hotel PMS. Let’s see how a Hotel PMS helps each of them –

Front Desk Staff – Using a smart Hotel PMS, a hotel’s front desk staff can streamline the whole reservation process – right from accepting bookings (coming via walk-ins, OTAs, travel agents), assigning rooms, confirming the same and sending out a confirmation mail to the guest. They can also take requests for booking cancellation/modification and room upgrades, etc with ease. Here are some other tasks a front office staff performs with a Hotel PMS –

  1. Guest registration
  2. Check-in/checkout
  3. Night Audit
  4. Room management – marking rooms that need housekeeping attention

Housekeeping Staff – Excellent housekeeping plays a vital role in ensuring guest satisfaction. Post checkout when the front desk staff marks a room as vacant, the PMS sends an alert to the housekeeping department. And once the cleaning is done and the room is ready, the housekeeping staff can mark the room as ready to occupy on the software. This helps the front desk staff to know rooms that are ready to move in and thus helps him offer faster check-in facility to guests. Plus, a Hotel PMS can help schedule housekeeping tasks, assign staff and track the same for timely completion.

POS Outlet Staff – Guests don’t just stay in a hotel. They use the hotel’s restaurants, bars, gyms, spas and gift shops (also known as POS outlets) too. And it is not the best experience if they have to keep paying every time they visit any of the outlets. So, in such a scenario, it is advisable to post all their POS charges (also known as non-room charges) directly to their rooms. This means, the POS staff can post their bills to their room and guests can pay the final bill while checking out. This automation via a PMS and POS integration saves time and helps avoid billing errors.

General Manager – General Managers take care of the overall administration of a hotel. They are also responsible for strategic planning to ensure the success of a hotel business. And for this, they need to leverage the power of an all-in-one Hotel PMS that helps them with KPIs and insights. A Hotel PMS provides several operational reports including history and forecast report, revenue report, reservation report, housekeeping report, night audit report, financial report, guest history report, and occupancy reports, etc. to take key business decisions.

About the types of hotel PMSs, we currently see three variants of them –

On-premise/server-based/legacy hotel PMS
Typically installed via a local server at the property (hotel) level which could be accessed via desktops. Hotels need to take care of capital investment in hardware, servers and license fee. They also need to pay for upgrades and must have a dedicated IT team to manage everything.

Hybrid cloud hotel PMS
This is an application that has evolved from its legacy nature to a web front-end that can be accessed via web browser on a computer, tablet and mobile. It can be hosted locally at the property level or remotely. However, certain PMS functionalities/elements will still stay on-premise. Many on-premise PMS vendors are currently using this approach to retain their market share.

Web-native cloud hotel PMS
This the purest form of cloud-based PMS. Such PMS can be accessed from anywhere, anytime using a browser or mobile phone. It can be hosted either via private cloud or public cloud. Compared to on-premise or hybrid cloud version, this application is more agile, flexible and open to multi-tenancy. For hoteliers, upgrades are for free. Most importantly, it offers open APIs for easy deployment of several third-party solutions.

The emergence of cloud-based hotel property management system

In recent years, cloud-based hotel management software has seen rapid adoption across the globe, across all property types – irrespective of their volume of operations, staff size and guest-facing offerings. Here are some of the reasons that have led to a growth in demand for cloud PMS –

  1. Easy to deploy
  2. Faster implementation process
  3. Property can go live quickly
  4. Low cost of software ownership due to no investment on licence fee, servers and dedicated IT team
  5. Software updates & upgrades are free
  6. Provides mobility with remote access, anywhere and anytime
  7. Minimized support related issues as there are no local installations
  8. Offers Open APIs to enable seamless integration with a host of third-party solutions
  9. Guaranteed data security
  10. Offers scalability
  11. Easy to use functionalities help retain hotel staff
  12. Eco-friendly as it includes reduced use of IT hardware and software

Cloud hotel property management system as a platform (Integration Capabilities)

A Hotel PMS does not only help automate and streamline operations across all the departments in a hotel. It has now also evolved as a platform that helps hotels increase online visibility and reputation, reach out to target audience across geographies, sell more rooms to make more profit. Unlike a server-based PMS, a cloud PMS is built on common Web Standards and Open APIs to enable smooth and seamless integration with a host of third-party solutions. Let’s look at how a cloud PMS helps in this –

Channel Manager – The integration between a hotel property management system and a channel manager platform is a ‘must have’ feature. The integration’s two-way connectivity automatically pushes rates and availabilities from the PMS to the channel manager for distribution across all the connected OTAs/sales channels. And similarly, delivered through the channel manager, bookings on OTAs/sales channels would also get instantly updated on the PMS. It helps in dealing with overbooking and double-booking issues.

Revenue Management – A hotel property management system must integrate with a revenue management software to help hotels maximize revenue. This integration helps with an accurate forecast of demand, evaluates the profitability of each booking, factors a hotel’s online reputation into its pricing decision and ultimately helps determine the best pricing for the right time for the right customer.

Online Reputation Management – This is another area that plays a major role in a hotel’s overall success, and a hotel PMS that gets integrated with an online reputation management solution can help big time in this. This integration helps you see guest reviews from across multiple platforms, so that you can analyze and understand your guest sentiment. It also empowers you to automate the review collection process to boost your online ratings and reputation.

Web Booking Engine & Facebook Booking Engine – TThis aspect is quite critical for hoteliers to generate more direct bookings. Through this integration, you can encourage your target audience to book directly with you via your website or Facebook page.

Business Intelligence – This helps you to view critical KPIs from various sources including PMS, website and POS, etc at one place. It lets you compare business on the books against forecast and budget.

Some more important integrations –

  1. Door Locking System
  2. Interactive Television System
  3. Loyalty
  4. Internet billing
  5. Voice Mail System
  6. Vending Machine
  7. Kiosk check-in
  8. EDC Machine
  9. EPABX
  10. Passport Scanner

How does a hotel PMS work?

Initially, when hotels started adopting Hotel PMSs, they wanted to efficiently manage guest check-in, check-out and housekeeping services. However, things are different now. A hotel property management software is not merely a piece of application that brings in a higher level of automation. Rather, it now covers the entire guest experience cycle – right from the booking process to capturing guest data for guest relationship management in future. To understand this, we need to go into a little deeper. Let’s have a look at some of the most important hotel PMS features that are important for overall efficient hotel management.

Guest History Management – The PMS records all the guest details including full name, type (FIT or corporate), gender, nationality, contact details and special preferences including likes, dislikes, payment methods and room type booked during the last reservation/stay. To be more precise, a hotel property management software captures and stores every guest detail to help you understand and serve them better during their current stay as well as in the future.

Guest Accounting – It helps you in posting extra charges to the reservation that may arise during a guest’s stay. It helps you in handling various other activities including automatic direct billing from the front desk, invoices, and splitting multiple folios with specific billing instructions, etc.

Night Audit – Also known as the end of day process, night audit is one of the most critical aspects of hotel operations. A Hotel PMS Software runs and executes this process, automatically posts room tariff and taxes on the guest folio. Thus, it confirms and reconciles the final balance of the entire day’s transactions. Additionally, the night audit process helps you with several reports including room details report, counter report, revenue report and tax report, etc.

Rate Plan Management – Effective rate management is one of the most important features of a hotel property management system. An intuitive hotel management software with a rate plan management feature can consider the performance of your sales channels, demand, occupancy, competitor pricing and seasons, etc to recommend the right room rates. You can create relational rates, multiple rates for a single stay, set up and change daily/monthly rates. Moreover, you can tweak your room rates based on occupancy-based dynamic pricing.

Banquet & Event Management – A hotel PMS must allow you to efficiently manage your banquets and other meeting areas by providing you real-time information about blocked banquet halls for upcoming events or halls that are vacant and can be booked. This module also handles billing and posting of transactions to the sales ledger. The PMS must be configurable to handle advance tagging, split bills, session-based billing and consolidated billing for all sessions.

Point of Sale – This module in the hotel PMS helps you set up required POS outlets – like restaurants, F&B outlets, pubs, gyms, spas and gift shops to earn more non-room revenues. All the bills from across POS outlets get synced with the PMS. The PMS captures all types of discounts and refunds given on orders created at the POS in real-time. It also captures category-wise POS details, so that sales are posted on appropriate account heads.

Management Information System (MIS) Reports – MIS reports help you to track, evaluate and determine the performance of your hotel business. A smart hotel PMS provides comprehensive and accurate statistical information on forecasts and budgets to help you create competitive room rates. Via MIS reports, a hotel PMS lets you know the revenue generated per day/week/month/year.

Material Management – This module helps you take care of your material management operations including costing, purchasing and stock receiving. It provides reports on stock level, consumption summary by cost centres and departments and helps you prevent overstocking or out of stock situation. Also, you can choose better performing vendors by tracking information such as time of delivery, accuracy of delivery and cost effectiveness.

Financial Accounting Management – Finance and accounting is another area in a hotel that needs to be streamlined by a hotel PMS. It takes care of cost-centre and department-wise transaction entry for income and expense, budget and ratio calculation, cash flow analysis, bank reconciliation, taxation and most importantly centralized data collection for efficient profit and loss statements.

Food & Beverage Costing – Carefully managing control of cost – both and food and beverage in a hotel plays a crucial role leading to enhanced profitability. This feature automates the process of consumption and sales posting, takes care of recipe-based costing methodologies and handles recipe masters with ingredients, etc. It helps you keep track of raw material usage so that you have a better plan in place to avoid wastage. Plus, with better inventory control, you can deal with situations like overstock and out of stock.

HR & Payroll Management – This module helps in better human resource and payroll management. You can leverage this module to track and analyze your employee specific events including – onboarding, probation, promotion, salary, revised salary, time/attendance/leave management, department/company transfer and separations, etc.

Maintenance Management – You can track service requests and act accordingly to finish the same in time. The module helps you in scheduling and executing preventive maintenance and creating job orders. It provides you with room-wise, floor-wise and complaint type wise analysis reports. Thus, you can reduce maintenance cost and improve labor productivity.

Let’s look at the use of a hotel PMS for various property types – mainly independent hotels and chain/group hotels.

Hotel PMS for independent hotels

Given its limited operations and offerings, an independent hotel will have a completely different approach while selecting a hotel PMS. In this case, the PMS should be extremely user-friendly. Technically, it should help them handle reservations with a feature rich front desk. It must help them with a channel manager integration that assists them with real-time inventory distribution over all the connected OTAs. POS integration is also another area that needs attention as it helps in earning more non-room revenue.

However, in today’s changing business dynamics, independent properties are also leveraging the power of hotel PMS to automate the process of guest review collection and to strengthen their online ratings and reputation. Some of them are now also looking at efficient revenue management through a PMS. It completely depends on the geography they operate in and kind of guests they target.

Hotel PMS for chain/group hotels

Chain or group hotels will have to factor in many elements while selecting a PMS. Like independent hotels, they also need a PMS and channel manager connectivity for real-time distribution across OTAs and other sales channels. In addition, they would need the PMS to manage multi-property operations with a single sign-on and centralized control.

For example, the management at a group would need the PMS to have a centralized dashboard to manage reservations for all the properties spread across locations. They also need the PMS to help them with real-time management of rates and availabilities between the CRO and all the group properties. Additionally, centralized guest history to access guest profile from the property level and group-wide revenue management are another key areas for them, too. Due to their enterprise-grade operations, they consider the comprehensiveness of the PMS as one of the most important factors.

What next?

Today, the hotel PMS, as a software is considered as a useful tool to serve guests better. Many hotels now have their own brand’s mobile application that can be integrated with the existing PMS. Once booking is done, guests can download the app on their smartphones, check-in remotely and upload their ID proofs. Thus, they can avoid the front desk formalities upon arrival and the hotel staff just need to walk them to their rooms. Not only this, guests can use such apps to chat with hotel staff to raise service requests.

Hotel PMS vendors are adding new features to make sure that their products stay relevant to hoteliers’ changing technological requirements. Today’s smart hotel PMS works in tandem with several other futuristic solutions like artificial intelligence, robots and virtual reality, etc to help hotels attract more guests and to sell more rooms.

How Hotel PMS Helps for Hotel operations

Debiprasad Sarangi

Debiprasad handles Corporate Communications at Hotelogix. He is a writer by passion and profession. As a journalist, he has also worked with some of the leading Indian mainstream newspapers.

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