The Property Management System (PMS) of the future is already here
By Max Starkov, Adjunct Professor NYU Tisch Center for Hospitality and Hospitality & Online Travel Tech Consultant
Today's Property Management System (PMS) is the hotel 's command center for rooms and F&B management, sales and catering, distribution, availability, pricing, reservations, guest interactions, issue resolution, housekeeping, reporting, billing, guest communications, etc. and is often described as "the central nervous system of the hotel operations."
The traditional, legacy PMS is an on-premises software platform with features and functionality ranging from barebones to rich and very complex. These legacy platforms have a number of serious disadvantages: a) too expensive to install, train staff and maintain, b) their "all-in-one solution approach" stifles innovation and prevent quick adoption of new functionality needed to meet new guest requirements or sudden changes in the market conditions, like the contactless experience from last year, and c) as closed systems they are reluctant to open up to third-party integrations, applications and solutions, depriving the property and its guests from some very innovative and much-needed applications and services.
I remember how a dear industry friend of mine, opening a boutique hotel in California, had to keep the server with the legacy PMS in his living room for many months while the hotel was still under construction.
What happens if your on-premises server hosting the PMS just dies? It has happened many times before. Or if there is a flooding or fire or burglary at the hotel? With the lax back-up protocols in our industry, most probably all of the guest and operational data would be lost.
Luckily for our industry, the future is already here in the form of a cloud PMS with Open API (application programming interface) integration platform, just on time in this most challenging era in our industry.
Both the legacy and cloud PMS platforms employ the PMS-centric hotel tech stack approach, but unlike its legacy PMS predecessor, the cloud PMS allows hoteliers to meet and exceed the needs of their guests in these trying times and brings many operational and cost-saving benefits for all hospitality stakeholders.
Some of the benefits of the cloud PMS are significant and timely:
- No upfront costs - its pay-per-use model makes it an operating expense (OpEx), which helps the constricted cash flow
- Easy to install, train staff and use which increases staff productivity
- Automation of many administrative tasks, saving the property team time and effort
- AI driven workflows and database management and intelligence
- Automatic software upgrades with minimum downtime and no extra cost
- No need for on-property IT support, which is getting quite unattainable in the post-crisis era
- Complete automation of redundant processes and tasks, allowing the property to operate with leaner staff
- The ever-changing data security requirements are handled by professional data security engineers at the cloud PMS vendor
- Provides guests with contactless guest experience and mobility.
- Upgrade and up-sell capabilities or easy integration with an upsells vendor, important in this depressed revenue environment
- Easy access to reporting and performance analytics from any device anywhere.
- Most importantly, an Open API for seamless, fast and free or low-cost connectivity with the myriad innovative third-party vendors out there. Ex. Oracle's legacy OPERA PMS has 400 API capabilities vs the OPERA Cloud PMS with 3,000 API capabilities.
Laura Calin, VP, Strategy Solutions Management at Oracle Hospitality, known worldwide for their OPERA PMS with over 40,000 installments, considers the following as the three main advantages of the OPERTA Cloud PMS over the legacy PMS:
- Ability to achieve more with fewer resources, whether this is enabled through intuitive and intelligent applications which are easy to learn and operate, or the ability to access the system from any device, in any location, as multi-tasking becomes the norm.
- Security of data for guests and employees and the peace of mind that comes with that, allowing IT teams to focus on technology that aids the guest and enhances their experience. In general, day to day IT maintenance challenges become a thing of the past once PMS is in the cloud.
- Ability to be agile, adapt and evolve fast, without high costs, either by taking advantage of new features introduced through the frequent application releases or by accessing a large variety of integrated solutions through a cloud integration platform, which Oracle Cloud PMS has with over 3,000 API capabilities.
Adam Harris, Founder and CEO at Cloudbeds, a cloud-first PMS with over 20,000 installments, believes the following are the three key advantages of the cloud PMS over the legacy PMS:
- Flexibility: If last year has taught us anything, it's that flexibility is critical. A cloud-based system gives hoteliers more flexibility to change and pivot quickly and seamlessly - without huge technical restrictions or overhead costs. For example, Hotel Pommier in Indianola, IA converted rooms into apartments to give options for extended stay customers. With a cloud-based system that syncs with all of their channels seamlessly, they didn't miss a beat.
- Ease and efficiency: At Cloudbeds we believe that ease of use is paramount. The hospitality industry has one of the highest employee turnover rates of any industry in the U.S. Training and onboarding new staff should be an important factor when selecting a PMS. With a cloud-based PMS, product updates happen seamlessly and frequently. Beyond technology, a good cloud PMS will have an education and training component integrated into its product so any system updates are not disruptive but rather easy to understand and implement for all staff.
- Connectivity: Integration capabilities are far superior, faster and cheaper to implement. Data needs to be synced in real-time. New and innovative tools will continue to be introduced to the market. If you can't connect your PMS to them easily, you are one step behind your competitors. Cloudbeds have over 400 APIs to third-party vendors.
Ever since the emergence of the cloud-first PMS platforms like Cloudbeds and Mews, there has been a monumental shift in the PMS vendor community's mindset: from closed system mentality to cloud PMS with Open API mentality. At Oracle Hospitality, with the adoption of the Oracle's self-service cloud technology tools, the OPERA Cloud PMS with Open API has become the most important innovation strategy.
Richard Valtr, Founder at Mews, a cloud-native PMS with over 2,000 installments, summarized well this mentality shift at a recent webinar: "Technology has become a competitive advantage for many hoteliers and we have to enable them to stay competitive and succeed."
Ingo Dignas, Founder and CEO at Protel also commented: "The hotel customers have changed and they stopped expecting the PMS to be a complete system providing 100% of the functionality a hotel would need. They are looking for best-of-breed technologies, many of them offering niche, very agile applications and features. Only the cloud PMS allows APIs to such applications to be deployed fast and cheap."
The cloud PMS is the obvious winner in the post-crisis era
I believe over the next 5 years the adoption of cloud PMS solutions will explode and this will be the highest growth component of the hotel tech stack, followed by revenue management systems (RMS) and customer relationship management (CRM) solutions.
Why? Low costs, efficiencies, higher productivity and data security aside, in the near and mid-term a full-service 3-4-5-star hotel will need over 100 plus APIs with third-party tech applications and solutions to be able to function and meet the basic needs and wants of today's digitally-savvy travelers. These include mobile and contactless guest experience, mobile locks, issue resolution apps, guest messaging, virtual concierge, IoT devices and utility management, smart room technology, entertainment hubs, CRM programs, etc.
This type of connectivity is impossible or super expensive to achieve with a legacy PMS, which is hostile to any third-party interfaces by default. A cloud PMS with its Open API and integration hub instantly solves this problem. Good examples: The new Oracle Hospitality Integration Platform with 3,000 API capabilities, StayNTouch Integration Hub with 1,100 APIs; Protel Air PMS Marketplace - 1,000 APIs, Cloudbeds PMS - 300 APIs etc.
What would happen with the hundreds of thousand legacy PMS installments out there?
Rest assured, I asked the right people this pertinent and timely question: When does it make sense to switch from a legacy to a cloud PMS?
According to Laura Calin from Oracle Hospitality, switching from a legacy to a cloud PMS has occurred traditionally when a) on-premises hardware reaches end-of-life and warranties are expiring, or b) when a brand affiliation comes to an end and a replacement system is required.
Oracle Hospitality has sensed a major customer mindset shift in the last few years, which has been accentuated by the pandemic, accelerated by the need for data security and adherence to stricter government regulations around the globe, the need to access the PMS system from anywhere and any device, and increased demands for accelerated innovation. "Hotels should be thinking about what they want to achieve in the next 2-3 years and, if the legacy system is holding them back, it will be time to consider a move to the cloud to get ready for the recovery phase from the pandemic," continued Laura Calin.
Adam Harris from Cloudbeds is much more categorical about the need to transition to a cloud PMS: "When to do the switch to a cloud PMS? Yesterday! The pandemic has accelerated the use of customer facing technology. Travelers want to use their own devices for both convenience and safety. Contactless may be the latest buzzword but convenience is here to stay."
Let's face it: a legacy PMS is a legacy from the past, from the times when closed software systems ruled the world. Since then, everything has changed. Times have changed, hotel business have changed, hotel technology has advanced beyond belief, our guests and their wants and needs have changed, the property operational needs have changed.
There is no doubt in my mind that the cloud PMS with Open API facilitating connectivity to hundreds and thousands of smart, innovative and much sought-after applications and solutions is the clear winner today and tomorrow. The only question is when to switch? My advice? The sooner you switch, the more excellent the guest experiences you provide to today's super tech-savvy customers, the more you will know about their preferences, the better you can communicate with them, the more loyal customers you can win thus generating more repeat business, the more you can empower your employees, the more automation and operational efficiencies you can implement, the faster you can improve the bottom line and the sooner you can outshine the competition.