Hotel Property Management Systems: How to Develop One

The implementation best practices, pitfalls, and noteworthy technicalities to help you keep tabs on the development of your Hotel Property Management system

The types of Property Management software and its benefits to property owners and asset managers

Unlike some of the other types of business applications that focus only on a single or just a few areas of a company’s business operation, modern Property Management systems, including hotel property management systems, mean the world to their owners. They allow them to do the often impossible – efficiently manage each and every aspect of their real estate portfolios and a plethora of related customer interactions. This happens because Property Management systems have a host of clear-cut advantages as compared with the outdated traditional ways of managing properties, including:

• The ability for landlords and other property owners to manage multiple properties centrally and concurrently.
• The possibility to eliminate the bulk of the existing paperwork.
• The possibility to categorize the landlord-tenant interactions and greatly facilitate these interactions by implementing standardized responses and other standardized communications.
• The possibility to ensure an efficient and significantly more secure data storage, and some other advantages.

Although they are used for pretty much the same key Property Management activities, like properties’ advertising, rent collection, and provision of maintenance, Property Management systems can vary quite a bit in the functionality they provide. Their functionality depends on the specific purpose and target audience these solutions serve. Therefore, these systems include:

• Real Estate Management systems (residential)
• Hotel Property Management systems
• Commercial/Industrial Property Management systems

Residential property management systems allow you to manage all property-related information and operations, including property maintenance and billing. They process tenants’ applications, maintenance requests, and online rent payments. Such software is also used to aggregate legal information for the signature of agreements with various types of property owners.

Besides, residential property management systems allow one to perform credit checks and advertise properties.

With Commercial Property Management systems, you can also track occupant leases, do billing, and arrange for various inspections.  These systems also allow you to perform lease-related accounting and financial forecasting, impose recurrent charges, calculate Common Area Management (CAM) changes, and perform CAM-related reconciliation.

Property management systems hotels use tend to have probably the broadest and most intricate functionality of all. They typically provide advanced online bookings, multi-channel management, reservation management, housekeeping management, and other advanced functionality.

Regardless of their specific type, the majority of Property Management Systems share a trait that makes them quite difficult to implement by real estate owners and asset managers: their functionality is usually too company-specific. In other words, in most instances, you need a system that is pretty heavily tailored to the individual needs and requirements of your business.

For example, most of the off-the-shelf Real Estate ERP software has to be customized to some extent to be able to answer the needs of a specific Real Estate company. The required customization can be quite significant. This makes PMS the kind of software one should start considering custom software development options for from the very beginning.

In this article, we will focus on the benefits of property management systems in hotels. We’ll dwell on the more meaningful nuances and best practices in implementing the main functional areas of Hotel Property Management systems. We hope that this will help you skirt the pitfalls and make the PMS you want to develop more efficient.

The main functional areas of Hotel Property Management systems and some of the more optimal ways to implement them

The Core functionality of Hotel Property Management systems

A Property Management system (Hotel PMS) is a centralized and multi-faceted software application, which is typically allows scheduling, organizing, and conducting the day-to-day operations of one of a variety of hospitality accommodation businesses. In a sense, Hotel Property Management systems are much like their owners, who are supposed to be constantly mindful of a diverse multitude of things and yet capable of doing all of those things, often simultaneously. Hence is the somewhat intricate and nuanced functionality many of such solutions have.

Typically, a full-service Hotel Property Management system is composed of the following main functional areas:

• Online Booking
• Finance Management/Invoicing/Billing
• Reservation Management
• Guest Management
• Housekeeping Management

Hotel Property Management systems increase customer satisfaction and allow you to benefit from a larger number of repeat customers. The pros of online hotel booking these systems provide are numerous and undisputable. They range from the uplift in sales this functionality creates to the ability to take sales 24/7 and the possibility to broaden your customer reach due to the involvement of partner businesses.

A Hotel Property Management system can also create an upsurge in your sales of ancillary products and services and broaden their range. This can include airport pick-ups, flower delivery, beverage delivery, and lots more. Furthermore, you can easily create and manage themed packages (family, adventure, and romance ones), and increase your sales this way even further.

Along with a considerable increase in revenue, an HMS brings a dramatic performance increase. It becomes easy to stay constantly in touch with all your employees. Any task you create can be handled by your employees nearest the spot where this task needs to be executed. An HMS rules out time-consuming and annoying overlaps in the assignment of tasks. Besides, your executives receive a means that allows them to monitor your employees’ timely log-ins and availability. They can also easily keep track of the work interactions between your employees.

Hotel Property Management systems afford one more tangible advantage in conducting your hotel operations: they dramatcally improve the quality and accuracy of your reporting by mitigating the human factor.

Let’s now take a closer look at some of the things that can improve the core functionality of your automated Hotel Property Management system.

Online Hotel Booking functionality

Online hotel booking functional modules are intended for making hotel reservations and informing the user in real time about the availability of hotel accommodations.

Hotel guests can pick one or more of the available rooms, schedule their stay, indicate the duration of this stay, and make a payment for the selected accommodations.

In addition to allowing a hotel’s potential guests to choose rooms and make reservations, the online booking module of a Hotel Property Management system also allows hoteliers to manage rates and a variety of hotel resources. It enables them to make these resources available to their guests in the most optimal manner and in accordance with their guests’ wants and preferences.

Additionally, hotel management systems’ online booking modules enable travel agents and tour operators to interact with hotels, thus creating a steady inflow of customers for them.

Simultaneously, when not given enough thought during its implementation, online booking functionality can easily turn into a money drain that will later be very difficult to get rid of.

How to prevent this happening?

Here are a few hints that will help mitigate some of the risks:

• Make not only the accommodation rates, but also the prices of any spas, attractions, or any other facilities that your hotel offers available to your potential guests from the very beginning. These costs can impact your rates significantly, and can either promote your services offering – if they are appealing enough, or rile your guests and discourage them from staying at your hotel again, The latter is likely to happen if your guests are stuck with a bunch of options they can’t afford.
• The online booking functionality you implement must allow for the different fee payment models, used by your potential B2B partners (travel agents, tour operators, various websites, and so on). We would recommend that your online booking functionality support the three following fee payment models: a fixed fee per booking, a setup fee, and a percentage-based fee.
• Make the look and feel of your online booking module as visually appealing and user-friendly as possible. At the time your user is making an important traveling decision, there isn’t really any human contact between them and your staff as such. Try to sound friendly and encouraging. Do your best to provide all the info you yourself would want to have to make an informed choice.

Additionally, it is always important to remember that your Rating Management functionality must allow for the addition of an unlimited number of various discounts and plans.

Reservation Management functionality

Usually, the Reservation Management functionality of a Hotel Property Management system allows hoteliers to manage all the inventory they have at their disposal. It allows a holistic view of all the current bookings and the related dates, including double bookings and group bookings, upcoming reservations, and free rooms. With this functionality, you can manage check-ins and check-outs, the related hotel room inventory, and schedule bookings.

The Reservation Management functionality of a Hotel Property Management system is usually connected with the hotel’s front desk and online booking functionality. It can also support QR code-enabled check-ins and check-ins via check-in kiosks.

Usually, a Reservation Management module receives booking and other data from the different engagement channels, used by the hotel. Given the large volume and diversity of this data, this can potentially cause unwanted overlaps, guest friction, damage to the hotel’s reputation, and lost profits.

Because of this, regardless of the size of the hospitality business you run, you must implement your Hotel Channel Management module so that it will to coherently manage all your bookings, rates, and inventory distribution across all your customer engagement channels. In this case, you will be able to update your bookings automatically, avoid overbooking, and respond to any arising conflicts in time.

If your hotel offers any facilities or activities your guests can subscribe to, your Hotel Management solution should include a mobile app that would allow them to do so on the fly from any location.

Guest Management functionality

Much less often the focus of attention in related publications, the Guest Management functionality carries a lot of weight and should on no account be played down or overlooked.

Your system’s Guest Management functionality must allow your employees to quickly determine whether an arrival is a new guest or a returning one, retrieve a detailed history of their previous visits, and view a list of the guest’s preferences to refine the service and make the guest’s stay more comfortable. To enable this, this functionality must be closely integrated with your PMS’s data collection functionality.

In addition, your Guest Management functionality must store your guests’ contact information. You can also add a function that will determine your guests entitlements (like for instance, gifts or discounts) based on their previous stays.

If your Hotel Property Management system includes a Marketing module, your Guest Management functionality can also be leveraged to conduct marketing campaigns and various advertising activities.

Housekeeping Management functionality

The Housekeeping Management functionality allows your hotel’s front desk to manage the housekeeping activities at your hotel. It is usually possible to create tasks by using a range of predefined options, slate these tasks’ execution for a specific date and time, and assign them to a maid or some other employee. The housekeeping staff of your hotel can view the tasks that are assigned to them and respond to these tasks on mobile devices or tablets.

No big deal, at first glance. However, there’s a bunch of petty nuances here that may well turn into sizable problems if you don’t discuss them with your software provider. Firstly, you should enable the user to easily view and alter the current status of all the existing or multiple (for example, those located on a specific floor) rooms. To provide enough flexibility, it would probably make sense to include the following room statuses:

• Vacant Clean
• Vacant Dirty
• Occupied Clean
• Occupied Dirty
• Out-of-Order/Undergoing Maintenance
• Out-of-Service

The user must be able to use these statuses as search criteria to display a list of the rooms with a specific status. The search criteria can also include Floor, Building, Single/Double, Housekeeper, and Housekeeping Team.

In the event that one of the available rooms is assigned the Out-of-Order/Undergoing Maintenance status, your system must automatically verify whether there are any related bookings and inform your front office accordingly.

Also, it could be a good idea to connect your Housekeeping module with your solution’s Reservation Management module to prevent bookings for rooms that are currently not ready for them.

For out-of-order rooms, one should provide the ability to indicate the required maintenance or renovation period. Upon this period’s expiry, your housekeeping staff should be reminded of the need to alter the room’s status. After the status is changed, the Housekeeping module must automatically inform the system’s Reservation Management module accordingly.

Additionally, it may also be useful to have one more status – Deep Cleaning – for those rooms that have just undergone serious renovation.

Invoice Management functionality

Any mid-sized or major hotel makes a boatload of purchases, usually on a daily basis. Managing the numerous and often convoluted purchases becomes a hazard. It’s easy to slip up and create an accounting mess, or run short of a product and cause a bunch of negative customer reviews.

Well-developed Invoice Management functionality can mitigate the problems that numerous and frequent purchases from multiple suppliers create. What exactly should be done here?

1. It is essential to implement detailed Purchase Orders that one can use as the starting point for investigating a purchase if this is required. These Purchase Orders should include the following parameters: name of the product or service, a brief product description, price per unit, quantity, delivery date, location of delivery/delivery terms. Your suppliers will use your Purchase Orders in creating your invoices. This alone can spare you a great deal of attrition and many costly mistakes.
2. Your Invoice Management will become a great deal more precise and robust if you implement a capability that will allow you to collate the contents of your Purchase Orders with those of the invoices you will receive in response to them.
3. Your Invoice Management functionality must store information on seasonal or any other discounts and other privileges your vendors offer. Your Hotel PMS must notify your staff about when they should best order a product or service.
4. To optimize your cash flows and ease the pressure on your finances, your Invoice Management functionality can be designed to sync your invoice payments with your cash flows.

Nice-to-Have Hotel Property Management software functionality

AI-Enabled personalized recommendations

Hospitality is a vertical where AI gives market players a sizable edge.

One of the AI factors you should consider first thing is the AI-enabled possibility to track and analyze your visitors’ previous journeys across your site. In many instances, this can provide you with the three crucial insights that will allow you to deliver a tailored and appealing offer: the customer’s needs, the customer’s budget, and the customer’s likes and preferences. More specifically, it is possible to learn about the customer’s previous bookings and related purchases, hotel rating preferences, travel itineraries, and visits to your hotels’ facilities.

To benefit from this opportunity, you need to include an AI-driven recommender system that can both use real-time data and derive insights from the historical data, stored in your system.

AI-enhanced room search

If you run a major hotel or a hotel chain that offers a diverse variety of accommodations, you can facilitate your guests’ selection of the more suitable accommodations by implementing image-based search.

For example, if a visitor to your site has taken an instant liking to a suite that is not going to be available any time soon, you can give them the ability to use the suite’s image to locate a similar-looking suite that is available at the moment.

AI-driven chatbots

AI-driven chatbots with a powerful NLP layer can pack a punch for your hotel business by providing 24/7 multilingual support to your callers and other potential customers.

Furthermore, similar to AI recommender systems, such chatbots can make a contribution to your sales as they can be taught to instantly collect info on your potential customers from across the Web. These chatbots can then leverage these customers’ preferences while conversing with them.

AR/VR

If you run a luxury hotel that boasts sophisticated hotel facilities, or a hotel located in a particularly attractive setting, Augmented Reality (AR) and Virtual Reality (VR) are two more awesome technologies that you as a hotelier can benefit from.

More particularly, VR can generate virtual tours of your hotel rooms that can be very useful in swaying your site visitors’ choice in favor of your hotel.

The overall requirements your Hotel PMS must be compliant with to support your business needs and have robust performance

System scalability

Your Hotel Property Management system must preferably have a modular architecture, so that you can generally use your application without at least one of its constituent modules.

Another major requirement for any automated Hotel Property management system you must necessarily discuss with your HMS software provider would be your system’s infinite scalability.

Your system must be endlessly scalable to support the addition of any new entities to any of its functional areas. This includes the various types of vendors and partners and the legal documents your dealings with them may require, your range of the available hotel facilities, the ancillary products and services your hotel offers, and more.

It must be possible to expand the functionality of your hotel property management software system to include at least one more hotel in its entirety, so that you can then manage it as part of your current operation or just another business unit.

System security

The security of your Hotel PMS is just as important as its scalability. As a hotelier, you collect a massive amount of basic personal guest data, transaction data, and vendor data. The processing and storage of this data needs to be protected.

Furthermore, your data storage and processing must be made either GDPR-compliant, or compliant with any other similar regulations applicable in your location.

Your provider of hotel property management software must be cognizant of these data security regulations and capable of implementing this functionality to ensure your hotel business’s full compliance with them. The latter can include functional capabilities that perform data-cleansing (for example, this can be implemented for the personal details of those hotel guests, who have not stayed at your hotel for a specified number of years), anonymization of older invoices, the ability to promptly inform any of your numerous past customers in response to an inquiry about the kinds of their data your hotel holds, the ability to instantly delete personal guest data upon request, encrypted storage of guest data at rest, a function that determines and groups your past guests, who have granted permission to use their data for marketing purposes, and more.

Implementation options

Of the three possible implementation options – out-of-the-box, cloud-based, and custom-developed, the combination of custom-developed and cloud-based seems to be the most optimal option for a host of reasons.

Firstly, you receive a solution that is tailored to your needs and future-proofed in accordance with your likely growth scenarios.

Secondly, you can save up to a half of your software development spend by opting for a well-established nearshore or offshore custom software provider.

Thirdly, the stability and constant availability of the Cloud makes it a good fit for hospitality as a business niche: it is vastly important that your employees be able to access the system seamlessly from anywhere and at any time.

The cost of a full-fledged Hotel Property Management system: the readily available and custom development options

Just like with the majority of business applications, the cost of purchasing or developing a Hotel Property Management system varies very significantly depending on the complexity and scale of this system’s functionality.

While you can generally purchase a Hotel PMS for around $ 50-500 per month depending on the number of rooms you have, you can have the same kind of software custom-developed for you for approximately $ 20K-60K, depending on the qualifications and location of your custom software provider.

Learning about how to outsource app development for your HMS project to a well-known software outsourcing destination (such as, for instance, Eastern Europe) can be a lot of help here.

Outsourcing the development of your HMS software can create dramatic cost savings under both the scenarios: in most instances, you can cut your custom development costs by almost a factor of 2. In the case of readily available HMS software, these savings can be lower but still very tangible.

Please also note that as we have already mentioned before, most of the PMS on the market require a customization of sorts to fit the needs of a specific company.

Our Experience

SPD Technology has been in the business of custom software development for close to 17 years, offering services like web and mobile app development. Over this time, we have created a diverse number of sizable IT products, including large-scale platforms with complex and wide-ranging functionality. These IT products include advanced financial software products, large-scale eCommerce platforms, and sophisticated attraction ticketing software. Our software allows one to make single and group bookings for multiple sites and attraction options and use coupons to get discounts.

Our company can develop hotel property and attraction management software in accordance with all your needs, wants, and requirements. SPD Technology employs some 500+ eminently qualified software engineers, business analysts, software architects, project managers, QA engineers and other experts who are versed in designing and building high-performance, high-load, and infinitely scalable enterprise-grade software systems. We would be delighted to use the expertise and experience we have to help you make your project a success.

Are you ready to take your hotel business to an entire new level?

Nowadays, the fierce competition makes hotel owners lean over backwards to stay profitable. Many make a go of sundry software apps with limited functionality and legacy business processes, but feel like these business practices are doomed.

Modern-day comprehensive hotel property management systems offer much better booking, inventory management, housekeeping management and other functionality that creates decisive competitive advantages.

Would you be interested in comprehensively automating your hotel business, so that you will be able to benefit from these advantages too? You are welcome to get in touch with us to discuss how one can affordably build a robust and efficient Hotel PMS and how our mobile and web development services can be of assistance here.