Hotel and Hospitality Management Software, the Buyers Guide

By.  Ahmed Mahmoud 14th Nov 2014

In our previous post we discussed about the evaluating hotel and hospitality management software, where the new Hotel Management software companies vying to increase their footprint around the hospitality market, since the market is in demand increase phase.

With the calculation of Total Cost of Ownership (TCO) and Return on Investment (ROI) for any software for any buyers, we understood that a basic lower TCO and higher ROI are the defining criteria for the right software choice.

Moreover, the market trend has determinate how buyers can choose the best software for their property , based on The importance of Hotel Management Software or Property Management System for hotels cannot be stressed enough anymore. It is one of the most important factors which contribute significantly to the long-term success of a hotel.

In recent years, there has been a rise of budget travelers around the world which has led to rise in number of small to mid-size hotels in the industry. This has drastically changed the landscape of the Hospitality industry in general and also directly affected the Hospitality IT industry.

It’s all about buying smarter. Hundreds of the industry’s top technologists from hotels, vendors, and consulting groups have collaborated through out to document best practices and design principles across a wide range of hotel systems.

Thus, the importance of the HMS or PMS comes at first place and determinate by the type of buyers and what buyer’s requirement:-

What Type of Buyer Are You?

Hotel management software buyers typically fall into one of the following categories:

1- Small property owner’s buyer. A bed-and-breakfast or a Boutique hotel with only a few rooms between 1-100 rooms, those small properties will have much less robust business needs than a large hotel or resort. As an owner of small property If you are just starting out, make sure to consider a simple, but comprehensive system that includes property management and account capabilities.

Major share of buyers comes from those small and independent hotels the buyers in those hotels do enough business to require the assistance of a HMS mostly seeking for reservation and online booking capabilities in the new tools, but are still small enough to be able to make independent decisions about software purchases.

2- Property manager’s buyer. Can be categorized under small hotel managers, these managers are assigned by the property owners to manage the property and collect payments and also assigned to pay for the obligatory expenses and taxes. In this type of buyers, they would likely choose property management software rather than the hotel management software for the reason that this category of software is easier to be used, which is then designed in handling reservations and accounting for high turn-overs environments.

3- Large hotels and resorts buyer. Large hotels and resorts typically have lots of different products and services for guest to buy i.e. golf, spa, excursions, tennis …..etc. hotel and resorts will required more maintenance requests and more complicated reservation and POS needs , thus the larger the property, the more robust a system you’ll need.. It should be worth it to pay more for a robust hotel or resort product that can make all your processes smoother.

4- Franchises buyer. Is the practice of leasing for a prescribed period of time the right to use a hotel successful business model and brand i.e. Wyndham, Carlson, Intercontinental and others. with the guidance of the franchisor many franchises have specific rules on what hospitality software can be used, while others, such as Holiday Inn, allow their franchisees to make the decision for themselves , but in general Micros/Opera is the one most commonly specified by franchise organizations .

5- Hotel chains buyer. Hotel chain is an enterprise that administrates, through a unique management a number of hotels located in different areas. They can be total or partial owners of the hotel and they manage their administration, marketing and promotion. The global hotel industry is dominated by hotel chains.

As a buyer, if you represent a brand with multiple properties, you need to determine whether you want a single system across them all or allow them to choose for themselves. Ask yourself how much—and what kind of—information you want to gather from each of your properties, and whether it needs to come in automatically or if manual reporting will be sufficient. If you do go with a single unified product, be sure to consider how the needs of each property differ—you may only have one hotel in Las Vegas, but it will need some of the features associated with Casino Management Software, which may necessarily impact your purchase decision.

6- Apartment hotels buyer. Sometimes it called furniture apartment or Residential hotels provide long-term or permanent accommodation for Guest. Usually guest makes a lease agreement with the hotel for minimum of one month up to a year. These lease agreements are renewed on a yearly basis.

It is important that you consider the availability of the services offered before buying or before closing the deal with the owners of the property and you have already discussed all the information about the hotel management software. If you are already an experienced businessman and knows everything about buying a certain property, you must have the idea if what kind of buyer you are and if in what category your abilities will match.

What Buyers need from venders?

Selecting the right Hotel Property Management System can be a daunting task given the number of well-established solution providers and options in the market. The buying considerations are sure to vary depending on a hotel’s specific needs and situation, including its category, size and typology. Does the system need to interface with self-service check-in kiosks? Does it require a casino or Spa management module? It all depends, of course. Still, for most, there are a number of key considerations to keep in mind and it will be vary.

However, recently, the experts at Software Advice published an interesting research – Hotel Management Software Buyer View | 2014 – that identified the reasons why hotel managers and owners look for new hotel software and what they need from the venders. The report is very informative and worth to have a look on it, a part of it result it says: “The biggest share of HMS buyers are currently using some software and look for replacement. But the cumulative amount of those who use multiple systems, Excel sheets and even pen and paper methods to manage their properties is much bigger. It was a bit of a shock to see how many businesses are still working without a professional hotel management system. The reason is probably the high investment needed for such until a few years ago. Now, with so many affordable cloud based solutions on the market, managers are looking for opportunities to automate and optimise their work.

From those who already using hotel software, the most seek more features, efficiency improvement or better user experience. Only a few pointed out they want to minimise their costs. The most wanted features concern reservation capabilities, online booking and guest management, which absolutely makes sense. Within the survey it was surprising that – only a small fraction of all answers indicates the need of mobile features and website integration. With all the buzz about the increasing usage of mobile devices for travel bookings and during holidays, this seems to be a serious flaw in the strategy of many hotels. Unfortunately, other studies indicate the same imbalance in the level of adoption of mobile technologies by guests and hotels. For example, the TripBarometer by TripAdvisor shows that mobile engagement appears to be essential for a big percent of travellers, while most hotels lag behind in following that trend. Our sincere hope is that this situation is going to change in the nearest future.

Until recently, no single software application excelled at automating all of the different hotel operations, let alone doing so in a unified and integrated fashion. Instead, people often utilized a combination of Excel spreadsheets and standalone department-specific software programs – oftentimes in conjunction with age-old manual processes. The software, once it became available, tended to be clunky and inefficient. Data was fragmented. Performance reporting was incomplete. And the interface and overall user experience left a lot to be desired.

Next-generation Hotel Property Management Systems are a horse of a different color, brimming with features and functionality specifically designed to meet the end-to-end needs of modern-day lodging properties. No wonder the hospitality industry has come to embrace these solutions as a strategic imperative.

Common Features of Hotel Management Software

In all cases, the main purpose of a Hotel Property Management System is to minimize costs and maximize revenue and profitability. These financial outcomes mean not only streamlining day-to-day operations across the organization by maintaining better management controls but also gaining a deeper understanding of the unmet wants, needs and behaviors of guests through analytical reporting — and then, importantly, acting upon those insights to increase guest satisfaction, loyalty, brand advocacy and retention. While the range of features and functionality of Hotel Property Management Systems is broad, the overarching goals tend to be the same: to reduce costs, generate business insights and, ultimately, increase hotel occupancy, revenue per available room (REVPAR) and overall profitability.

The hotel management system should have the very common features i.e. reservation, Front desk & housekeeping, Point of sale (POS), Maintenance management, revenue management and accounting .

Finally It’s important to consider whether you need something specific to your type of property (hotel, motel, resort), or something more generic and/or basic.

About  Ahmed Mahmoud

Ahmed Mahmoud has more than a decade of experience in the hospitality industry and business administration, Ahmed began his career early by holding a variety of management positions with such top hotel chains as Accor Hotels, Hyatt International and Starwood hotels. With decades of revenue management experience Ahmed founded the very dedicated site for revenue management news, articles,

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