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HOTEL PMS in Search of the Perfect Toolbox

Which PMS a hotel, or hotel group chooses is decisive for the internal organization of the hotel, or hotel group, and that for the long haul. It is an important and difficult decision that relies on particularly technical knowledge. Over the years, the PMS, Property Management System, has increasingly justified its name and become a complete property management system and not just the billing engine it was only a few years ago. PMSs have a much broader array of uses than ever before.

PMSs have a much broader array of uses than before. They have integrated all the functions leading up to the completion of a guest’s stay: from reservation to services provided during a stay, and from billing to follow-up of the relationship after departure… They contribute to improving the operating efficiency of almost all divisions at the hotel, including back office, front office, sales, billing, marketing, stock management, Human Resources and maintenance.

It also expanded to all the divisions and points of sale. The most complete PMSs are able to link accommodations, F&B, the Spa, meeting rooms and events organization. The most profitable developments for hotels include those which involve «events» and marketing divisions.
For organizing meetings, receptions and other events at a hotel, the PMS gives the organizer a platform for managing logistics from end to end – from reservations and planning to the event itself, billing and reporting.

The PMS allows advanced management of customer relations and the link between the PMS and the Customer Relations Management system transforms customer data into a veritable loyalty tool, enabling cross-selling.

The most complete systems become the cockpit for realizing energy savings throughout the building, to interface television and telephone directly with the IP network and why not make coffee during breaks.
This sophistication leads to the question of friendly and efficient use of a toolbox that has as many organization compartments as it does operating modules. One of the main problems with the old PMS systems resided in their lack of flexibility and the taking into consideration of their less intuitive operation to generate different statuses and reports. Many users need to do reports, however, unless one is an avid IT person, it is difficult to find the information needed and to personalize statuses and reports at will. This is one of the improvements IT solutions developers have been working on.

In the end, the goal of PMSs is to reduce daily operating costs and improve the efficiency of personnel in order to maximize the global profitability of hotels.

For years now, hotel operators ran into a dilemma choosing between “owning” a solution installed on the hotel’s computers in a confidential manner with the risk of not evolving alongside the technological innovations, and having the solution in a hosted mode (Software as a Service, or SaaS), which minimizes investment costs and offers more flexibility. The evolution of secure offers on the Cloud has encouraged the latter.

An important tool for increased operating productivity

The profitability battle underway since the crisis in 2009 has led hotel groups to concentrate some of their efforts on the efficiency of the PMS. The Property Management System can no longer be restricted billing and operating management software. It helps optimize average revenues per client, who may be seen coming on the computer through the most profitable distribution channel possible (by activating the Chanel management program), or directly thanks to the brand’s CRS (Central Reservation System) connection; a client for whom the best going rate has been set (thanks to the implementation of Revenue Management recommendations), who is identified, recognized and valorized if he is a member of a loyalty program (carefully surveyed thanks to Customer Relationship Management)…

The hotelier is at the helm with a dashboard worthy of an Airbus 380, but he must be able to use it as easily as a Playstation, intuitively, logically and successfully. The new PMSs must be able to shift easily between back and front office; pull up results from the previous months, feed the strategic choices of the future and keep track of the habits of loyal clientele. It is all worth it since choosing the right tool and optimizing its use makes it possible to increase the operating margin with the same amount of work.

By internationally using the new in-house PMS that was designed with MSI for the United States, Best Western tells its members: «You cannot allow yourselves to lose a single sale, to make that sale at the wrong price and not accompany the client and his loyalty to the chain along the way.” Today the priority is to spread versions of this PMS throughout all the countries that are compatible with the computer equipment of hoteliers and the interfacing with complementary software. A new partnership agreement was signed at the end of 2013 to accelerate the unfurling of an external version on a secure Cloud.

The American group Choice Hotels International is taking a similar approach by encouraging all the franchisees to adopt its specific PMS, called Choice Advantage. It came out two years ago in Europe, in United Kingdom, crossing the Channel to outfit the new arrivals and replace the old systems. It underwent a few local adaptations to fit the practices of European hoteliers. Choice Advantage is a typical illustration of the recent evolution of the functions required of a last generation PMS. “From the initial reservation to check-out, and even after the guest’s departure, choiceAdvantage offers its hoteliers a complete solution to optimize management at all stages of their relationship with their clientele,” insists Todd Davis, Chief Technology Officer at Choice Hotels International. The program is accessible through SaaS (Software as a Service), meaning it may be used from a distance via Internet. It requires only minimal investment since all the technology is shared on the Cloud and only the use of modules billed. The PMS authorizes management of individual and group reservations, billing and also membership and the management of the loyalty program Choice Privileges. One of the most recent modules makes it possible to manage the price parity obligation. “With Rate Center, developed specifically for Choice Advantage, hoteliers can totally synchronize rates and inventories using multiple distribution channels as well as automate tasks and simplify the manager work.” Its yield management function is a veritable tool that makes it possible to optimize a property’s average daily rate.

Rate management within a hotel group is a major priority for boosting the average daily rate within a tense context where there is pressure to systematically drop prices. Partners systematically scan the rates, including those of the competitors, to find the right positioning and guarantee the connection.

Considering the previous generations of tools, today’s PMS is more expandable and presents itself as a global system by multiplying the complementary options, which makes it possible to guarantee the management of the property’s points of sale, reservations, to adapt pricing to the reality of the immediate market, strategic considerations and management of client preferences and behavior, all through a single source of data. Times have changed since hoteliers multiplied parallel systems out of a concern for confidentiality and fear of a widespread glitch. Today for greater efficiency and because they are convinced by the developments of the primary software designers, hoteliers have opted for modular systems. Thus, complementary modules have developed around the core PMS, which continues to manage arrivals and departures and to report sales results. These modules manage PayTV, F&B point of sale, needs in meeting rooms and access to spa treatments…
The externalization of information hosted on the Cloud offers an additional advantage for managing customer relations through a module that has become indispensable: the sharing of customer profile information among properties belonging to the same group or brand. Centralizing profiles makes it possible for clients to provide information only once. Internally, between different services, the hotel’s task management system is improved and reservation management is faster and more efficient. This change was encouraged by the change in the hotel environment. Modularity and internal connections became necessary in light of the customer’s desire to centralize everything regardless of where he is making a purchase at the property. POS solutions meet this need to facilitate sales by simplifying all the procedures.

Another major change happening in terms of PMS design, the integration of the “nomadic” dimension of the communications devices used by clients, starting with mobile telephones. Laurent Michaud, general manager of Micros Fidelio France, made this one of its axes of consideration. “Generally speaking, the hotel industry is trying to put its clients back in control. They let them chose the solution that’s right for them in terms of making reservations, hotel reception, check-out… using everyday tools including the mobile. It is thus necessary to adapt the PMS so that it integrates these options. We have experienced an initial form of externalization of check-in with the installation of kiosks in hotel lobbies similar to check-in kiosks at airports. The success was mild since customer expectations are not the same.
They have a greater need to be accompanied and recognized. That opens the way to even more interesting options with next generation mobile telephones that will have RFID or NFC chips that will make it possible to identify the customer, particularly the loyal client who accepts being identified as soon as he enters the property. It is an intelligent adaption of Cardex. The other area we are working on is to make portables a payment tool. This can range from online payment to creating an electronic wallet. In the long term it is possible to imagine a kind of Paypal as part of PMS software.”

The general manager of Micros Fidelio goes even further in a universe where the social networks become part of the daily lives of citizens of the world and thus of hotel clients. “It is possible to imagine reservations being made via social networks and that these client-fans will be identifiable by loyalty programs. The direction is toward a mobility of CRM programs, and hotel groups must accept to work with the “communities” that are forming on these networks.” The PMS may move into a new dimension and surpass its function as a strategic and operating management tool to become a prospective marketing tool. Global positioning of mobile phone carriers, paired with the knowledge of their individual or collective profile, through social networks, makes all kinds of targeted marketing campaigns possible.

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