Hotel Online  Special Report
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..Hotel Software
Is Hotel Software and Technology Keeping
Pace with the Hospitality Marketplace?
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Chicago - (November 2005) – One of the most exciting aspects of the hospitality industry is its dynamic nature. Distribution Channels, Hotel Software, In-Room Technologies, and Networking are currently undergoing dramatic changes. In addition, the methods in which you reach your guests and consequently meet their expectations are also changing rapidly. Add to this mix the fact that Condos, Fractional ownerships, Spas, and Waterparks are continuing to create new business processes and revenue streams for today’s hotelier, and it is evident that there is a need for appropriate technologies to help support these new opportunities. Over the coming weeks, Software Strategy will explore the technologies available to support these changes. In this article we will start with Property Management Systems (PMS), and touch on their interactions with both Central Reservations Systems (CRS) and Internet Booking Engines (IBE).

First, we will address what the typical PMS can deliver today, despite the changes that are afoot. To do this, we need to break down the available products into three broad categories, based on the features they commonly offer.

Multi-Module Systems (MMS): Delivers a full-featured software solution for a three to five star hotel or resort property, usually with more than 100 rooms. The typical customer of this category places emphasis on high service levels that support the customer experience. In addition, most of these software companies provide multiple software modules to address business process automation across all property needs. Pricing for these systems can start as low as $20,000 or as high as $60,000 (17,000 or 50,000 EUR) for the core PMS module. Incremental modules, training, and support are offered for additional fees.

Select Module Systems (SMS): Provides a solid, single-property reservation-handling platform without all of the features or modules of a Multi-Module System. A portion of these systems has ventured into highly-utilized modules like Point of Sale and Internet Booking Engines. In fact, some of these also provide connectivity to a limited set of distribution channels. The typical property using these systems can range from a small hotel or resort with a focused set of guest amenities, to a larger hotel offering a limited service customer experience. Pricing for this software can start as low as $1,000 or as high as $10,000 (850 or 8,500 EUR) with charges for additional feature sets and modules.

Basic Reservation Systems (BRS): Offers a more basic reservation processing capability for hotels and motels with less complicated operations. These systems are designed for a single property and can handle most standard reservation related features. These companies purposefully keep their products simple to use. These systems target smaller hotel, motels, and bed and breakfasts that only require software to support basic reservation handling. Pricing for this software often starts as low as $200 (170 EUR).

Second, we will display the common features in each of these categories. While any given product may have a unique combination of features for a specific target market, each type of system has a common set of core features that have come to be expected. The following table outlines the high level features quite often available in each tier.
 
 

Tier

Functionality

MMS
SMS
BRS
Core Property Management System      
Reservation Management
˜
˜
˜
Guest Profile Management
˜
˜
˜
Rate Management
˜
˜
˜
Reporting
˜
˜
˜
Back Office
˜
˜
¡
Housekeeping
˜
œ
¡
Customer Communication
˜
œ
 
Payroll
˜
œ
 
Internet Booking Engine
œ
œ
 
Point of Sale
œ
œ
 
Distribution Connectivity (Voice, GDS, Internet)
œ
¡
 
Central Reservations for Multiple Hotels
œ
   
Sales & Catering
œ
   
Spa Management
œ
   
Activity Scheduling
œ
   
Golf Management
œ
   
Club Management
¡
   
Condo Management
¡
   
Revenue Management
¡
   
Legend
˜
Most systems offer this feature
œ
This feature is somewhat common
¡
Only a few systems offer this feature
  This feature is not available

These classifications provide you with an easy guide to understanding the available PMS options as you begin your search. However, as the PMS companies enhance their software, and software companies in other categories do the same, your software decisions continuously become more complex.

The Lines Begin to Blur

As software products continue to mature, and acquisitions create new product combinations, the lines separating Central Reservation Systems (CRS), Property Management Systems (PMS), and Internet Booking Engines (IBE) continue to blur. PMS are adding CRS functionality to support multiple hotels, creating more CRS and Distribution software options, especially for small brands and management companies. CRS are starting to offer a better means for centralizing activities that previously required both property level software and property level personnel, offering opportunities for overall cost reduction.

As the online marketplace generates significantly more business for hotels, PMS companies are adding Internet booking capabilities to compete with the transaction based engines already available. This offers hoteliers the ability to choose either a transaction based model or a software purchase model, each with their unique advantages. Each hotel should carefully compare the lower up front, yet continual costs of the transaction model with the larger investment, yet lower ongoing costs associated with the software purchase model. All of these changes are attempting to keep up with the dynamic hospitality marketplace. Your software options are only complicated further when you take into account integration.

A Word on Integration

Whether software companies expand product feature sets through acquisition or through their own development efforts, integration across product modules may be handled in many ways. When new modules and features are added through acquisition, interfacing is usually chosen instead of integration, as this offers a simpler means to let previously disparate systems communicate with each other. In its simplest form, interfacing can offer the ability to share information with another system. A posting interface typically sends guest charges from one system to another system. In the case of reservations, one-way and two-way interfaces are built to transfer reservation transactions. For two-way interfaces, the transactions move in both directions, creating information flow both to and from each system.

When expanding an existing software code base, it is possible for a software company to integrate the system at the core. This type of integration offers the ability to share information at the database level, such as guest profiles, across all modules. Accessing guest profiles, reservations, activities, and charges from any module, and creating dynamic updates, then becomes much more feasible. This translates to more streamlined business processes and an improved guest experience!

The following table highlights common integration types in each PMS category. However, be aware that there can be significant variations in the details of any interface or integration solution. When reviewing possible options for your property, be sure to understand these details, as they can have a significant impact on both your processes as well as your customer experience.
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Tier

Integration Types

MMS
SMS
BRS
Posting Interface
˜
œ
¡
1-Way Reservation Interface for CRS or IBE
˜
œ
 
2-Way Reservation Interface for CRS or IBE
œ
¡
 
Full Integration - Shared Database
¡
   
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Our industry continues to change at a frantic rate, making it hard for software companies to keep pace. Whether or not the changes in technology are commensurate with our industry’s changes, it is Software Strategy’s goal to help you maintain awareness of your technology options in multiple software and technology categories.
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Software Categories
Internet Booking Engines Sales and Catering Revenue Management
Point of Sale Spa Management Customer Relationship Management
Club Management Golf Management E-Mail Marketing
Business Intelligence Systems Web Site Design & Hosting Inventory Management
In-Room Technology Categories
High Definition TVs In-Room Entertainment High Speed Internet Access
Voice over IP (VoIP) Energy Management Systems Minibar Systems
In-Room Safes Locks & Keycard Systems Networking
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To receive a Free Vendor List for one of the three PMS subcategories discussed or any of the above Software or In-Room Technology categories, visit our web site at www.SoftwareStrategy.net or send an e-mail to info@softwarestrategy.net with your request.

About Software Strategy

Software Strategy (www.SoftwareStrategy.net) is dedicated to researching hospitality technology products in order to help hotels make fast and accurate decisions on their technology investments. By working directly with technology and software vendors and using its own Technology Research Lab to understand the details of each offering, Software Strategy compiles knowledge about each product to support hotels in the technology discovery process. This research generates a set of products and services designed to both help hoteliers identify the appropriate technology products for review and to navigate the entire software comparison and procurement process with greater efficiency.

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Contact:

Tim Henthorn
Managing Director
Software Strategy
thenthorn@SoftwareStrategy.net

773-551-2088
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Also See: Searching for Hotel Software?; A Guide to Finding and Purchasing the Right Property Management System / September 2005

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