This is a key question for the efficient running of any business and it will very much depend on how many properties you have in how many locations; as well as of course your future plans for the business. What follows is a discussion of some key factors to consider and where to find more information before you make your decision.
‘ The more transactions and complexity to your business, the more functionality out of your system. You are therefore moving more towards a PMS system.’
Why are there so many different opinions on the right System for my Serviced Accommodation?
This is a simple question to answer: different answers from different people with different operating models and therefore different requirements coupled sometimes with a little bit of “you don’t know what you don’t know!”
What System should I get?
Now this question is a little more complex to answer. Firstly we need to acknowledge that when talking about systems the following tends to be used interchangeably; Property Management Systems, Vacation Rental Software and Channel Managers. So what are they? Are they the same or different?
Property Management Systems (PMS)
A PMS is a computerised system that facilitates the management of properties. PMSs have historically been associated the functionality required within the Hotel sector for shorter length of stay and high levels of transactions. Functionality reflected the fact that there was a reception desk, food and beverage outlets, on site maintenance, cleaning staff and scale.
Some Examples of PMSs are:
Vacation Rental Software
Vacation Rental software has been more associated with the longer stay market and lower levels of transactions. The software centred around reservations and some limited marketing and distribution. Aimed primarily at holiday homes, extended stay, relocation, condo’s, apartments, villas, holiday cottages. Reflecting that in most cases there was no reception desk and self catering facilities.
Examples of vacation rental software include:
What is the difference?
Both Vacation Rental Systems and PMS’ are designed to help you to manage your operation.
So, you could argue that their reason for being is the same. They both help you manage your property and are only differentiated by the type of property that you operate.
Whether you are in the short stay and/or Long stay markets with or without a reception desk, catering or self catering, there will be a number of functions that are needed in your “System”:
Here are some of the functions different ‘systems’ might incorporate to help with the decision making and efficient running of your business.
- Database of Property Information
- Recording Guest bookings and details
- Point of Sale
- Accounts Receivable and invoicing
- Sales and Marketing
- Posting of charges
- Materials Management
- HR and Payroll
- Quality Management
- Guest communications and customisable templates
- Reports for Tracking Housekeeping and Maintenance
- Reports for payments
- Reports for Management accounts
- Reports for KPIs and Revenue Management
- Triggered communications and alerts
- Calendar of bookings/availability
- Food and Beverage/Catering
Third party solutions can be integrated (depending on supplier and PMS/Vacation Rental used) and in some cases, some of the PMS’s and vacation rentals will have these already built into their systems as an “off the shelf package”.
You need to ask the System provider what functionality is included and if these are provided by third parties and if so what and who are these? Of course, you will also need to check that these are at no additional cost.
If it isn’t built into your “System” you will need to identify which providers your PMS/Vacation Rental System of choice has existing integrations with and check out the functionality of these providers . These providers will charge you separately to the agreed billing arrangement with your System provider.
Here is a few examples of some third party integrations that your operation may need:
- Revenue Management system
- Guest Portal
- Door Locking
- Booking Engine/Brand website
- Door Locking
- Mailing campaigns/marketing comms
- House Keeping task lists and checklists
- Sales and Purchase Ledger
- Payment Card Authorisation
- Channel Manager
- Mobile Staff Communications (housekeeping/Maintenance)
Vacation rental software solutions historically would have had basic functionality of some of the items listed above. However, the ongoing development and customer requirements have meant that Vacation Rental Software has developed to incorporate more of the PMS functionalities although the level of sophistication of these functions can remain quite limited.
Advancements in technology such as mobile devices and apps coupled with trends to outsource and Cluster/regionalise cleaning and maintenance for hotels and in some instances replace reception desks with check in kiosks have all gone some way in narrowing the gap between Hotels and serviced accommodation.
Additionally, the emergence of Airbnb, aparthotels and hotel brands entering into the serviced accommodation sector suggest that the distinction between hotels and Serviced Accommodation is narrowing with both seeking short and long stay guests.
And, don’t forget the change in trends surrounding the experiences and types of stays that guests are looking for?
A system that fits your specific needs based on the size and scale of the properties your manage is essential.
The difference lies between the type of operator you are and the level of functionality that your business needs.
If you have a small apartment in a big city that you rent out a couple of weekends a year or a house that you rent out throughout the year these are lower level of transactions and lower levels of resources needed. This operation would lend itself to the Vacation Rental Software Systems.
Alternatively, if you have multiple rooms in the same building renting to multiple short stay guest or you have multi properties in multi locations, with multiple rooms for multiple guests, the level of transactions and resources escalate, and the operation becomes much more complex and your need much more functionality out of your system. You are therefore moving more towards a PMS system.
For example if you have a large portfolio of properties and a low level of staffing (cleaners, reservations staff, 3rd party maintenance suppliers etc) to fulfil your operation you may be dependent upon a high level of automation and communication to gain efficiencies.
This would suggest that you need a system that has greater levels of automation. Whereby your system automatically sends a notification to your preferred maintenance supplier, sends your cleaners a notification that your guests have checked out, and a notification to your guest.
Don’t assume that your system of choice will be able to handle this. A large number of systems will simply give you a report that you can export and physically send on to your operational staff (maintenance/cleaning).
Equally, if you are in a location where your booking demands are high you may need to change your rates daily, or weekly in order tocapitalise on your market. If you are not using an automated Pricing tool, you need to have easy user friendly rate changing functionality including bulk copying and derived rates. Remember Vacation Rentals would be/are historically geared towards longer stay and less frequent transactions and this is an area that they are generally not strong in.
A good system should be able to give you accurate and timely information for KPIs; Average Rate, Revpau/Revpar, and occupancy by individual room/apartment/house by day/by week/by month and collectively for all blocks of rooms/apartments.
The extent and number of functions available, the capability for integration with other third parties, the extent of automation, the level and extractability of reporting and data available, length of stay and number of transactions. Ultimately, the level of functionality aligned with the size and scale of operation is the deciding factor in choosing the right solution for you.
For me, alongside the continuing development of trends in the Hospitality and Tourism Industry, a generic term relating to the system used for managing your accommodation should be adopted. Whether you need software because you have accommodation for the holidays/vacation, relocations, extended stay or shorter transactional stays.
You could segment each of these into relocation software, extended stay software, hotel software, hostel software… and so on but they all generically need a system to manage the property. A Property Management System (PMS) is a generic reference to all types of accommodation providers systems.
Another level of confusion in the answer to “What System should I have?” stems from understanding what Channel Managers are?
What is a Channel Manager?
A lot of people refer to a Channel Manager when referring to the functions of a PMS or Vacation Rental Software System. And again, through time and development Channel Managers are starting to include some limited functionality of PMSs/Vacation Rentals.
The prime purpose of a Channel Manager is to “push” your availability and your rates to 3rd party on line travel agents (OTAs such as booking.com and Airbnb.co.uk etc) and to receive (“pull”) bookings into your Systems calendar and booking details.
Some Channel Managers will have limited XML “push/pull” partnerships with OTAs which therefore limits the extent of where you can distribute your rates and availability securely.
Whilst the majority of Serviced Accommodation providers will depend upon booking.com and Airbnb there are 100’s of other OTA’s available who operate in specific parts of the world and are geared to different audiences. So, depending on the type of customer, the length of stay that you are looking for and ability to provide services for overseas guests will depend upon the OTA’s that are of interest to you.
A channel manager is not designed to manage your operation but to distribute your rates and availability.
Staah explains this nicely at: https://www.youtube.com/watch?v=JFdvUhQBfRA
Again, the type of channel manager you have depends on the level of operation that you have and the functionality that you are looking for. This link describes the top 10 channel managers, dont be put off by the repeated references to Hotels this is simply because the providers haven’t as of yet got around to changing their descriptions to fully include the serviced accommodation sector, focus on the functionalities
Examples of channel managers are:
Depending upon the extent of your operation will depend upon whether you need a channel manager or not.
If you have a sizeable, multi unit, multi location operation you are likely to need 3 parts to your System Solution.
- PMS with stronger functionality
- Channel Manager
- Booking Engine with Brand Website.
If your vision is to grow your portfolio over time and to avoid having to change your PMS, to align the relevant functionality that you need, a cloud based PMS with open A frames to integrate additional service providers would be a good option.
Capterra is a comparison site that is useful to read up on Systems with differing levels of functionality. Please note that channel managers, reputation managers, PMS’s and Vacation Rental Software can all be listed under PMS and Vacation Rental Software so make sure you are familiar with what you are looking at.
Also, a large number of suppliers are US based.
How to Pick the Right Solution for You!
- Be realistic about what level of Operator you are and are due to be so that you can remove the limited or full functionality options depending on where you sit in the scale of Operations.
- Know what your vision is in order to future proof yourself and ensure that have flexibility to add additional functionality through third parties over time.
- Know the extent that you need to distribute and market your rates in case you need additional channels to extend your availability and rates.
- Understand your market and the segment of guests
- Section your operation into key areas eg. Reservations, Finance, Marketing, Distribution, CRM (customer relationship management), Rates, Reports, Support & Training etc
- Identify what you are looking for to support your processes under each of these headings.
- Know the processes of your operation and identify if there are areas within it that could be automated.
- Know the level of communication that is needed for guests and staff to avoid disruption, confusion and complaint.
- Be prepared to adjust the processes to align with the right system solution for you.
- Don’t let your budget dictate the solution.
If you need any help and would like a pdf copy of the criteria sheet to identify the functionality you need please contact colin@OptimiZeRevenue.co.uk