Hotel Property Management Systems: Products and Features

In this article, we’ll talk about property management systems (PMSs) that handle reservations, front- and back-office operations, channel management, and more. You’ll learn about the main functions of PMSs, compare products available from different providers, and receive recommendations on how to choose the most suitable system for your hospitality business.

What is a property management system?

A property management system (PMS) is software that facilitates a hotel’s reservation management and administrative tasks. The most important functions include front-desk operations, reservations, channel management, housekeeping, rate and occupancy management, and payment processing. Although PMS software mostly controls reservation and financial transactions, it may allow you to manage housekeeping and perform human resources management as well. In general, PMS facilitates the main processes in a hotel related to internal and external operations.

Hotel Property Management System (PMS): Functions, Modules & Integrations

The first hotel property management systems were introduced back in the 1970s. But, even today not every hotel has one. A report “Hotel Management Software BuyerView” by Software Advice shows that in 2015 only 34 percent of hotels used special software, while 25 percent still relied on pen and paper only to manage their hotels, and 16 percent had no hotel management system at all. The report is based on data from 385 owners of independent hotels, motels, inns, resorts, and other types of a hotel property in the US.

Softwareadvice stats

Current methods of hotel management

Source: Software Advice

So, plenty of hotels still use Excel, a paper-and-pen format, or legacy software none of which fulfill the needs of a 21st century hotel. Legacy PMS software may perform just one function, require additional modules, or be too hard to integrate with other necessary hotel management software. Consequently, hotel owners are looking for a universal, one-and-done solution to manage all the processes.

Currently, hotel property management systems are used by big hotel chains, small hostels, and everything in between. With these systems, hotels can see the booking status of rooms and control reservations. However, their functionality doesn’t end here. Via PMS, hoteliers can manage back-office processes, food and beverage services, and track room occupation rates. Let’s take a closer look at the most common functions supported by PMS.

Main modules of property management systems

A modern property management system combines multiple work environments in a single piece of software. Depending on the provider, the combination of modules and functions can vary, and the functionality of one module can be slightly different. Additionally, some vendors sell their systems in separate modules that can be integrated with an existing solution used by a hotel. Here is the basic structure of a hotel PMS.

pms outline

A general structure of property management system

Keep in mind that it is hard to divide the functions of PMS into more and less important because all of them are necessary. However, regardless of a property type, hotel property management systems must have a reservation system with a website booking engine and front-desk operations module. Other essential modules usually include channel management, revenue management, housekeeping, customer data management, report, and analytics. And big hotels or resorts certainly need point-of-sale (POS) services and back-office modules.

Reservation

For a modern hotel business, online bookings are in most cases the main sales channel. The reservation module, which helps manage online bookings, effectively becomes indispensable to a property management system. A central reservation system (CRS) or any other reservation platform may be available as a separate module of PMS or implemented as a hotel’s separate internal solution.

A hotel reservation system holds all inventory data and dates, sending this information to the front desk. The reservation system must be integrated with the website booking engine and other distribution channels. Chain hotels usually have one central reservation system for all properties, while independent hotels have their own reservation systems. If a hotel or a hotel chain already uses a particular reservation software, PMS must offer integration with the existing service.

Key functions of the reservation module include:

Room bookings. The system checks room availability and status, shows free rooms across different channels and the website booking engine. This function monitors double bookings and allows group reservations. Then it schedules bookings and displays information about current and upcoming bookings on a dashboard.

Collection of e-payments, and identification of types and categories of payments that are processed via this module.

Management of room inventory and allocation that prevents overbookings and duplication of bookings. In some software, this function is part of a channel management module.

Reservation emails. The system sends confirmations to guests after they complete booking. In some PMSs, this function is a part of the front-desk operations module.

Activities booking. Some software allows guests to book not only accommodation but also activities with this system.

Front-desk operations

A front-office module allows a front-desk manager to view and update room reservation status, check guests in and out, and process payments. When a guest arrives at the hotel, they want to check in as fast as possible. Support from a receptionist is very important in this case, so front-desk staff should have time to help the guest. Some property management systems offer integration into check-in kiosks or allow checking in or out via QR code. To get a better idea of check-in automation, have a look at how Marriott and other businesses leverage digital self-services in travel.

Room management. One of the capabilities that this module provides is room management. Using a front-desk module, the front-office manager can access room status and up-to-date information about all reservations, both current and upcoming. With the help of this module, room status should be updated quickly. The front-desk module allocates rooms automatically and facilitates a room change. This module includes management of electronic key cards, processing payments and issuing receipts to guests. The front-office module also allows users to perform night and shift audits.

front desk operations

Front-desk operations interface

Source: Crozdesk

Channel management

Channel management software is a single interface to control and distribute inventories across different channels such as GDSs, OTAs, wholesalers, direct booking platforms, etc. A channel manager connects directly to a central reservation system that holds information about the availability and cost of hotel rooms, sharing this information via the distribution channels. It makes room inventory available to travelers who want to book a room or property online, listing rooms on different sources. Also, a channel management module facilitates booking-related transactions.

Different distribution channels expose the inventory to different audiences. For example, connection to OTAs and some airline websites allow a larger number of potential guests to be reached, those who book flights or plan trips in advance. Metasearch sites compare prices across different channels, letting a customer make the best decision. Connections to global distribution systems assist non-leisure traveler booking as well as group reservations.

Another channel of distribution is a website booking engine. An online booking engine allows travelers to complete reservations directly via a hotel website bypassing travel agents and OTAs. It’s important to allow loyal guests to book directly, and website booking must be available to those who find a hotel online. A booking engine must be synchronized with the hotel website and its central reservation system, making it an additional sales channel. Usually, this module processes payments via integrated payment gateways.

Revenue management

A PMS in and of itself is a big step towards improving hotel revenue management indicators, such as Occupancy, RevPAR (Revenue per Available Room), and ADR (Average Daily Rate), which mean a lot in evaluating a hotel’s financial success. While GDS and OTA integration helps maximize these rates, revenue management systems help a manager understand how to adjust the processes to achieve better results and control finances. This module helps increase total revenue of rooms using forecasting to optimize occupancy, deciding whether to raise or lower inventory prices.

The revenue management module enables dynamic pricing. Using algorithms, this module helps hotels price the rooms based on historical data about past reservations as it monitors competitors’ rates, weather data, and local events. It improves pricing strategies, and updates prices across all distribution channels to sell more rooms at the optimal rate. To learn more about revenue management read our article on how machine learning redefines revenue management in the hotel industry.