By Taylor Short
From Software Advice’s conversations with hospitality professionals, we gain deep insight into what buyers are looking for in hotel management systems (HMS), which we can use to identify existing and emerging trends in the industry.
In this report, we look at current hotel management software buyer behavior. We also identify the most popular software functionality most hotels use to attract guests, facilitate easy direct bookings and improve the guest experience.
- The use of a hotel-specific system is increasing alongside modest industry growth—hotel management system adoption increased by 2 percent in the past two years.
- Sixty-two percent of buyers are looking to replace problematic software, while 38 percent are new users looking to automate and increase organization.
- Hotels are almost entirely in the cloud—96 percent of HMS buyers opt for web-based deployment.
U.S. Hospitality Industry Growth Boosts HMS Adoption
Hospitality companies use a wide array of methods to handle daily tasks, such as taking reservations, checking guests in and out and tracking housekeeping.
As the industry continues to see modest growth in supply and demand in 2017, we see that the adoption of a hotel-specific management system has increased by 2 percent from two years ago. At the same time, there’s a 2 percent decrease of manual methods, which include pen and paper or spreadsheets.
This suggests that more hospitality companies recognize the benefits of a hotel-specific property management system (PMS).
These systems offer features crucial to hospitality. As a hotel manager, your standard PMS addresses the needs of apartment or condo managers; an HMS includes functionality that you need to stand out from the competition, including:
- Reservation management
- Revenue management
- Channel management
- Guest relationship management
An HMS serves as an all-in-one system. HMS users don’t have to click around different windows or log-in and out of different programs because these systems integrate all systems into one, seamless experience.
Managers Need to Automate Daily Tasks and Enable Online Bookings
For HMS seekers, a combined 62 percent cite specific problems with the software—it’s old, it lacks features or it’s hard to use—as their reason for shopping around. Another 27 percent are just starting out and want a new system to help them stay organized from the beginning.
We also looked at the applications buyers request most to find out their must-have functionality. Front desk applications, unsurprisingly, ranked first; every hotel needs proper front desk capabilities to check guests in and out and generating key cards.
Beyond the basics, buyers need to make sure their hotel has an online presence that can attract guests who can book directly from the hotel’s website. It’s no surprise, then, that an online booking engine (OBE) was a close second at 23 percent.
The facts are undeniable: about 148 million travel bookings are made online each year. That’s 57 percent of all travel reservations made in a year. Even more importantly, 65 percent of same-day reservations are made on a smartphone.
As travelers consistently and increasingly perform research and book online, your goal should be to use an online booking engine to get your property in front of them as soon and often as possible during their selection journey.
An OBE also offers other useful capabilities:
- Customization and branding. Most OBE vendors allow hotels to embed the engine within a branded landing page, so guests stay engaged with your specific logos and themes throughout the booking experience.
- Image gallery. In addition to logos, hotels can also insert professional photos and galleries into the page to show off your rooms and amenities.
- Real time pricing and inventory. The rates and availability of rooms are pulled from the HMS directly, minimizing double bookings or other guest inconveniences.
Cloud-Based Hotel Management Software Is Now Standard
We’re approaching a time when more and more software is cloud-based, while the older on-premise model of deployment is typically relegated to industries and organizations with extreme security concerns or other special requirements.
It seems hotel software buyers are following this trend: Of those who have a preference, 96 percent would prefer web-based hotel management software.
Preferred Deployment Option for Hotel Software
Nearly half of our respondents represent independent hotels (we’ll share more demographics below), and their budgets can be prohibitive to software investments. For these smaller hotels, cloud-based software offers significant benefits:
- Lower costs. Cloud-based software typically trades the large upfront costs associated with on-premise software for a subscription-based payment option, paid monthly or annually.
- Security. Hotel data in the cloud is protected in the vendor’s servers and is regularly backed up, so you don’t have to worry that a local disaster could wipe away your guest information.
- Flexibility. As long as you are connected to the internet, you’ll be able to access a cloud-based solution. Maintenance and updates can typically be implemented overnight, so hotels don’t need to suspend operations.
Demographics of Hotel Management Software Buyers
As mentioned, 48 percent of respondents are from independent hotels, as compared to the remaining franchised properties.
Buyer Demographics: Type of Hospitality Company
Smart hoteliers know that the younger, most lucrative traveler segments today are looking for a real experience—not just a nice guest room. This trend has spurred the increase of boutique, independent hotels across the country, designed to provide more authentic experiences. This sense of authenticity gives smaller hotels a powerful feature to stand out from large hotel chains.