The Independent Hotelier's Guide to Property Management System Selection

Property Management Systems, Glossary

Average Daily Rate (ADR) The average daily rate is the average rate that a hotels' rooms sold for on any given day. The average daily rate is calculated by taking the total daily room revenue and divide that by the number of rooms that were occupied that day.
For example if your hotel room revenue for yesterday was $19,600 and there were 88 rooms occupied, the ADR would be calculated by 19600/88 = $222.72. Therefore $222.72 is your average daily rate.

Customer Relationship Management (CRM) Customer relationship management is a process or methodology used to learn more about your customers needs and behaviors in order to develop stronger relationships with them. Having this understanding provides the opportunity to provide better service and create targeted marketing efforts.

Global Distribution Systems (GDS) Global Distribution Systems (GDS) are Travel Agent Reservation booking channels which include Amadeus, Sabre, Galileo and Worldspan.

Interface An interface is quite simply, the conduit between your property management system and systems provided by other vendors. A good example of another vendor's system would be a point of sale system (POS) in an outlet of the hotel such as a restaurant or bar.

Internet Distribution Systems (IDS) Internet Distribution Systems are made up of a group of on-line travel sites where individuals or travel companies may make travel related reservations such as hotel bookings. There are approximately 1900 travel sites, with a few examples of well know travel sites being Hotels.com and Travelocity.

On-line Booking Engine An on-line booking engine or web booking engine provides potential lodging guests with the means to check room prices and book reservations.

Property Management System (PMS) A property management system or PMS is the computerized system used in a Hotel, Motel, Inn, Resort, B&B or Property Management Company. This system would perform reservation and check-in and check-out functions, accounting and management reporting.

Webinar A webinar is a web based seminar that is presented over the Web. Webinars are a common way to present training, lectures and seminars.  A webinar offers participants the ability to take part from any location providing they have access to the internet.  Telephone is often used for the audio portion however voice over internet protocol (VOIP) using a computer with sound is also used for audio.

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On-line booking engines

An on-line booking engine or web booking engine provides potential lodging guests with the means to check room prices and book reservations from a web site, usually the hotel's web site.

Statistics vary from publication to publication, however the year after year trend is an increase in the number of reservations being booked using an on-line booking engine. If you are a hotel owner or manager you will find that to be very good news as your guests spend more time making reservations while your staff spend less. These savings in staff time and costs in the reservations area may then be better used towards spending more time looking after your guests during their visit.

During the comparison of on-line booking engines you will find some vast differences. The evaluation process is the time to find what each has to offer and which will work best for your business needs. Some look great while others not so pretty, some very functional while others are a little clunky. The goal when evaluating on-line booking engines of course is to get the best of both worlds.

Some property management system vendors provide booking engines as an extension of the property management system so that any reservations booked from the web site are completed in real time, meaning there is no delay in the reservation being available in the property management system. The room inventory availability is supplied by the property management system so no manual inventory updating is necessary.

There are other options for booking engines that need mentioning. It is possible that the property management system vendor does not have an on-line booking engine available so in this case a third party booking engine would be used. If this is the case it is likely that the inventory needs to be manually updated or an allotment to be set. The reservations in this case are typically not real time; there may be a delay in transfer to the property management system so it would be considered seamless but not real-time. If there is no interface available between the property management system and the booking engine this means that manual intervention will be required and reservations booked using the on-line booking engine will need to be manually entered into the property management system.

Another option would be if your business has a Global Distribution System provider they may offer an on-line booking engine as part of their service. In this case it is likely the reservations are not available in the property management system in real-time however they may be available with a slight delay in which case they would be seamless. In other cases the property management system vendor may not have an interface available between the property management system and the global distribution system provider in which case they would need to be manually entered into the property management system.

Further considerations when selecting an on-line booking engine would be to determine if it possible to change the look, font and colours to meet your business branding requirements and match the look of your web site? Is it possible to display your logo within the on-line booking engine? What features are available to showcase your rooms and amenties? How many room and property pictures are you able to include?  Are there any tools available to measure the conversion rate? In other words how many visitors are checking rates and how many are actually booking a reservation? What type of reporting is available? Are you able to get reporting on items such as as production, consumption, room type, market segment or source of business?    

It is important to also evaluate the costs associated with purchasing an integrated real-time on-line booking engine or one that may be seamless with a slight delay or even one with manual intervention needed and weighing those costs with the labour dollars spent. This is definitely an important part of the property management system and booking engine evaluation.

Good luck with your evaluation process!

property management system evaluation

Choose The Right Property Management System (PMS), Don't Forget to Evaluate Training and Support

When you are considering the purchase of a Property Management System (PMS) for your lodging business it is about more than just evaluating the software features.  During the product evaluation process you also need to review the quality of the support and training services provided.  Confirming that the software vendor is capable of providing the training and support that your team requires will help lower risk to your business.  Running a hotel means you need 24 hour support and knowing that software support is available when you need it is paramount to choosing the right vendor.

Your business depends on the systems that you use to look after your customers and your business needs.  This means that if you and your team don't get the training and support you need to operate your property management system properly, how will you look after your guests and your business efficiently?

The extent of training and support coverage will be provided in your contract once you make it to that stage, however you need to understand the quality and extent of training and support that your vendor provides before you sign on the dotted line.

Training

• Does the vendor provide ongoing training?
• Is training available via webinars?
• Is on-site training available?
• Do you have a choice in how training is delivered?
• What do some of the vendors current clients think about the quality of training?
• When you have staff turnover does the vendor provide property management system training for your new staff if needed?
• What type of documentation is provided?
• Is the documentation updated regularly?
• Is documentation available on-line?
• Are E-Learning Videos available?
• Does the vendor offer training webinars on a regular basis?

Support

• What support plan options are available?
• Does the vendor provide software updates as part of your support fee?
• What are the regular business hours?
• Is 24 hour support available?
• Is there a guaranteed or estimated turn around time for phone calls or email?
• Does the vendor offer a support ticketing system?
• Is the vendor able to access your property information quickly and do they keep a history of your inquiries?
• Is there a self serve support portal available for your key operators or staff to enter support tickets and  inquiries?
• Is there a self serve support portal available for your key operators or staff to access a solution database?

Know the answers to these questions and get references.  Ask these references how they rate customer support and find out how the vendor responds when there is a problem.  This will help provide insight into the level of service that accompanies the software that you are purchasing for your Hotel. 

Good luck with your evaluation!

Jeff Sefton

property management system evaluation

Evaluation process, breaking it down into bite size pieces

During the evaluation process you may find it easier if you divide the operational functions of the property management system into modules or operational areas and list their functions. Below you will find a listing of modules and their primary functions.

• Front Desk, check in, check out, posting charges and payments, guest invoices, modifying guest information, extending stays, room moves, splitting folios, adding shares to accounts, reporting.
• Reservations, making reservations, taking deposits, policies, sending confirmations, modifying guest information, modifying stay dates,reporting.
• Revenue Management, rate functionality, opening and closing rates, close to arrivals, length of stay restrictions, multiple rates during the guest stay, rate changes, rate tiering, rate yielding, reporting.
• Housekeeping, setting rooms clean, setting rooms dirty, setting rooms as inspected, using the guest room phone to set room status, late departures, housekeeping sections, setting and clearing out of order rooms, out of order history, room status reports for housekeeping staff, reporting.
• Guest History, guest stay information, guest loyalty numbers, special requests, guest contact information to be used for email or mail outs, reporting.
• Groups, group blocks, block release functions, copy functions, room listing import functionality, charge routing, reporting.
• Wholesalers, wholesaler blocks, release functions, copy functions, billing functions, reporting.
• Accounting, accounts receivable (City Ledger), invoicing, transferring billing accounts at check out, accounts receivable aging, statements, payments, reporting.
• Auditing functionality, daily balancing and reporting.
• General Reporting, statistical reports such as source of business, market segments, revenue and occupancy forecasting and financial reports including breakdown of charges by revenue centre, taxes, and payments.

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Why are you buying a Property Management System?

There are a variety of reasons that property management systems are purchased.

• Building a new hotel or resort and currently do not have a system in place.
• Converting from a manual process to a computerized system.
• Canceling your franchise agreement and becoming independent.
• Changing to another franchise or brand.
• Current system causing guest service issues as it is not reliable.
• Grown out of exiting system, does not meet your business needs.
• Unsatisfactory support from the property management system vendor.
• Require a more robust tool for revenue management.
• Require all round better business reporting.
• Require better guest management capabilities.

In many cases the person responsible for evaluating the potential property management system may not know the reason that the process to replace the system began in the first place.

A clear and full understanding of why you are purchasing a new property management system will be helpful to you during the evaluation process. 

property management system evaluation

Global Distribution Systems, what are they?

Global Distribution Systems (GDS) are Travel Agent Reservation booking channels which include Amadeus, Sabre, Galileo and Worldspan.

These systems are used by Travel Agents to make Hotel reservations, airline bookings and rental car bookings. Where Hotels are concerned, Travel Agents have access to room inventory for hotels that have a relationship with a Global Distribution System Provider.

A Global Distribution Service Provider will provide access to these systems and have a contract with the Hotel, either directly or through a property management system vendor.

Hotel inventory may be managed by one of the two following methods.

1. Manually by the hotel where they update their inventory using an extranet and typically login to the extranet via the Internet.
2. Automatically using an interface linking the property management system and the Global Distribution Provider. Not all property management systems provide this interface, however it is becoming more common. Full automation of the procedure is available with a 2 way interface.

Some Property Management Systems vendors provide a 2 way interface that will send up room inventory and rate information to the GDS channels and receive reservations seamlessly from the GDS booking channels.
These reservations will transfer directly into the Property Management System.

Other Property Management System vendors are only able to provide a 1 way interface that will only facilitate the transfer of the reservations from the GDS channels into the Property Management System, however the inventory information is not transferred, this would need to managed manually within an extranet.

Managing inventory manually using an extranet is a very time consuming way to manage inventory. If your property management system vendor offers a GDS interface, the cost associated with setup and implementation will typically out weigh the labour resources used to update an extranet over time.

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What is an Interface?

An interface is quite simply, the conduit between your property management system and systems provided by other vendors. A good example of another vendor's system would be a point of sale system (POS) in an outlet of the hotel such as a restaurant or bar.

The staff in the restaurant may need charge a guest's dinner bill to their room at the Hotel. With an interface, the restaurant staff member would settle off the guest's dinner bill using a room payment function. The job of the interface is to take that information from the restaurant system and transfer it to the property management system. The charge for the restaurant meal would then appear on the guest's hotel bill for payment on check-out.

Some examples of interfaces would be the following.

Telephone (PBX)
Depending on the phone equipment, this interface is capable of taking guest name information from the property management system and having it appear on the hotel phone name display. Energy Management When a guest checks in, the guest is registered as in house in the property management system, a message is sent via the interface to the energy management system to indicate that the guest room is now occupied. In the summer this would activate the air conditioning system in the room and the temperature would be brought to a comfortable level. In the winter the heat would be activated in order to bring the room temperature to a comfortable level as well.

Key-less Card Entry
A card is created for a guest that allows entry to the guest room. The interface sends the check in and check out information from the property management system to the card system, the card is programmed to allow access to the guest room until check out time on the date of departure.

Movies
When a guest checks in, the property management system sends the movie system a message that the guest room is now occupied. Providing the guest has left a credit card at check in, when movies are requested in the guest room, a charge is placed on the guest's bill. This charge is sent via the interface from the movie system back to the property management system.

Global Distribution Systems (GDS)
It is common for a property management system vendor to provide either a one way or two way interface between the property management system and the global distribution systems. A two way interface will send up room inventory information to the GDS channels and receive reservations seamlessly from the GDS booking channels. These reservations will transfer directly into the Property Management System. A one way interface will facilitate the transfer of the reservations from the GDS channels into the Property Management System, however the inventory information is not transferred, this would need to managed manually within an extranet.

property management systems, global distribution systems

Selecting a Property Management System, Assigning a Project Manager and the Team

You are at the stage of selecting a property management system for your business. We will begin with the understanding that the determination has been made either through a feasibility study or management determination that a new or replacement system is required for your business.

Selecting and purchasing a property management system for your property is not an easy decision; it is a decision that takes a great deal of research and is very time consuming. Once you have defined your property type, it's time to compile a list of your needs and wants as well as the functionality that is required to best serve your customers and your business.

At the beginning of the process, it is important to designate a project manager that will be accountable and see the project through from purchase of the property management system through to the final implementation of the system at your property.

The evaluation and purchase of the system may be led by a consultant, the business owner, or a manager within the organization at the hotel level or at the head office level. This manager may have a role in the accounting, sales, or rooms division and as the project manager, may deem some items essential that a manager of another department may not.

Now is also the time to start thinking about your business team and the members that should be involved in evaluating the property management system that will be selected for your property. Including your team in the evaluation process can help bring different perspectives and needs from a variety of departments and from the staff that will be using the system.

Involving your team also helps to insure buy in which in turn will make the implementation process easier. A team may also make the evaluation process shorter or perhaps longer, either way you will obtain more information to assist in the selection process and make an informed purchasing decision.

Make sure everyone starts on the same page by briefing the team on the priority list that was initially created by the project manager from the needs assessment. Although the list will change as the evaluation process progresses there will be "must have" items on the list that will need to stay.

During the process it is likely that you will find that no property management system is capable of doing everything you want it to and exactly how you want to do it. You may need to compromise as the system you choose may be really efficient at handling the high priority needs of your business but maybe not quite perfect at handling other needs of your business. You may find that some operational changes in your business process may be required in order to work optimally with the property management system that is selected for your property. Remember, the goal is to find the best all round system for your business.

* Assign the Project Manager.
* Choose the evaluation team.
* Review current priority list and brief the team on the project.
* Begin evaluation lists, separate needs from wants.
* Stay focused on the goal of choosing the best all round system for the business.

Good luck with the evaluation process!

Jeff Sefton

property management system evaluation

Purchasing a Property Management System, Defining Your Property

Hotel and Resort Service Offerings:

• Full Service Hotel – offering a wide variety of amenities for your guests such as restaurant, room service and banquet facilities.
• Medium Service Hotel – May have a coffee shop, meeting facilities.
• Limited Service Hotel – No Restaurant or banquet facilties, may offer continental breakfast.

Property Type:

• City Hotel
• Resort Hotel
• Boutique Hotel
• Property Management - extended stay accommodation
• Bed and Breakfast

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What is a Property Management System (PMS)

What is a Property Management System (PMS)

A property management system (PMS)  is the computerized system used in a Hotel, Motel, Inn, Resort, B&B or Property Management Company used to manage guest lodging activities. 

Guest lodging providers would typically use a property management system to manage guest reservations, check in and check out, billing, house keeping and management and reporting functions. Most property management systems will also integrate with other systems such as point of sale systems (POS) used in food and beverage outlets (restaurants) within the hotel and other systems that would include phone, movie or energy management.

A property management system is used for more than reservations and checking guests in and out. Your property management system should provide the tools your team needs to service your guest better and revenue management tools to help increase revenue and let you know where your business stands at any given moment.

property management system evaluation