The 2014 Smart Decision Guide to Hotel Property Management Systems [Chapter 1]

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Everything you need to know for selecting – and implementing – the right Hotel Property Management System for your business.

Independently produced and distributed by:

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The 2014 Smart Decision Guide to Hotel Property Management Systems

TM

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Introduction pg. 3

Chapter 1: Topic Overview and Key Concepts pg. 4

Chapter 2: Buying Considerations and Evaluation Checklist pg. 10

Chapter 3: Must-Ask Questions pg. 17

Chapter 4: Roadmap and Recommendations pg. 20

Chapter 5: Inside Voices and Outside Voices pg. 23

Appendix pg. 27

Table of Contents

The 2014 Smart Decision Guide to Hotel Property Management Systems Entire content © 2014 Starfleet Media, LLC. All rights reserved. Unauthorized use of reproduction is prohibited.

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Hotels, resorts and other lodging properties consist of a diversity of operations, all

of which need to run like a well-oiled machine. This means enabling,

administering, tracking and measuring the constant flow of activities in the front

office, the bookings and reservations departments, and the concierge and guest

services, housekeeping, and banquet management departments. Other crucial

functions that need to be managed and monitored in an integrated manner

include inventory, maintenance and security.

Ensuring that all the operations that are central to running a lodging property are

working as efficiently and effectively as possible – all the while delivering the best

possible guest experience – is no easy task. In fact, it requires serious technology.

Until recently, no single software application excelled at automating all of the

different hotel operations, let alone doing so in a unified and integrated fashion.

Instead, people often utilized a combination of Excel spreadsheets and

standalone department-specific software programs – oftentimes in conjunction

with age-old manual processes. The software, once it became available, tended to

be clunky and inefficient. Data was fragmented. Performance reporting was

incomplete. And the interface and overall user experience left a lot to be desired.

Next-generation Hotel Property Management Systems are a horse of a different

color, brimming with features and functionality specifically designed to meet the

end-to-end needs of modern-day lodging properties. No wonder the hospitality

industry has come to embrace these solutions as a strategic imperative.

Introduction

Until recently, no single software application excelled at automating all of the different hotel operations, let alone doing so in a unified and integrated fashion.


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Chapter 1 Topic Overview and Key Concepts


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Hotel Property Management Systems are designed to automate repetitive

hotel functions and to track , monitor and analyze activities across the front

office and other parts of the organization. The first generation of these

platforms generally focused on such core functions as guest registration, room

inventory, guest charges, financial accounting and housekeeping records. With

many of these systems, the scope has now expanded to include a host of other

functions, departments and areas of accountability.

The platform capabilities have also become increasingly sophisticated, built

with both customization and scalability in mind. Some systems now include

Global Distribution System connectivity to automate transactions with

booking agents, Customer Relationship Management features designed to

engender greater satisfaction, loyalty and retention, and financial features like

food and beverage costing to maximize restaurant profitability and revenue

and yield management tools to optimize guest occupancy and room rates.

Many Hotel Property Management Systems also now integrate with third-party

technologies like point of sale (POS) software, accounting software, credit card

transaction systems, and keycard, minibar and entertainment applications.

Some systems allow additional modules and interfaces to be purchased and

integrated separately, based on the needs of individual properties. Some also

now serve as marketing and sales tools. Utilizing a treasure trove of data, they

can be used to create targeted marketing promotions and campaigns based

on individual guest profiles, behaviors and preferences.

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The platform capabilities have also become increasingly sophisticated, built with both customization and scalability in mind.

Topic Overview


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Regardless of size and the volume of business it does, whether it is a no-perks

budget traveler operation or an upscale resort offering first-class

accommodations and premier luxury services, or whether it exists as a

standalone entity or part of an international chain, lodging properties can

compete effectively only by automating their day-to-day operations across

multiple departments and functions. Competing effectively also means

gaining visibility into all aspects of operational performance and guest

experiences. The right Hotel Property Management System is key to

maximizing efficiency, maintaining competitive parity and using analytical

reporting to drive continuous performance improvement.

Still, the requirements and expectations on the part of prospective buyers can

vary dramatically. A full-service hotel will likely require a robust and

comprehensive system, one that can handle not just basic operational

functions like guest bookings, housekeeping, guest charges and maintenance

management, but also revenue management, advanced reporting and high

levels of guest service . The system may need to integrate with online booking

engines and manage hotel restaurants and cocktail lounges along with spas,

banquet rooms, dry cleaning and other facilities as well as such guest

amenities as bed turndown service, newspaper delivery, room service and

transportation shuttles. A full-service hotel will naturally have more service

requests as well as more complex reservation, scheduling , inventory and

hospitality needs than a limited-service hotel, which may nonetheless also

have much to gain from a next-generation system.

Chapter 1

The right Hotel Property Management System is key to maximizing efficiency, maintaining competitive parity and using analytical reporting to drive continuous performance improvement.

Topic Overview


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Chapter 1 Topic Overview

67%

81%

89%

94%

0 20 40 60 80 100

Improve data accuracy and performance reporting

Increase revenue and profitability

Reduce hotel operating costs

Improve guest satisfaction

Research Data Point What are the biggest benefits one can expect to gain with the right Hotel Property Management System?

In all cases, the main purpose of a Hotel Property Management System is to minimize costs and maximize

revenue and profitability. These financial outcomes mean not only streamlining day-to-day operations

across the organization by maintaining better management controls but also gaining a deeper

understanding of the unmet wants, needs and behaviors of guests through analytical reporting — and then,

importantly, acting upon those insights to increase guest satisfaction, loyalty, brand advocacy and retention.

While the range of features and functionality of Hotel Property Management Systems is broad, the

overarching goals tend to be the same: to reduce costs, generate business insights and, ultimately, increase

hotel occupancy, revenue per available room (REVPAR) and overall profitability.

Increase revenue Increase profitability Reduce operating costs

Streamline operations Improve staff efficiency Reduce guest wait time

Improve guest satisfaction Increase guest loyalty and retention Increase brand advocacy


Research findings are derived from the Q2 2014 survey on Hotel Property Management Systems (n=112).

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As the complexity of hotel operations continues to grow along with the

sophistication of the enabling technologies and infrastructure, prospective

buyers of Hotel Property Management Systems who may not already be well-

versed in some of the more recent trends and technology innovations should

spend some time researching the expanded range of possibilities. Following

are just a few high-level concepts to keep in mind.

Guest Profiling. The ability to capture and store individual guest information

in a centralized data repository and be able to augment, modify, analyze and

access those records from any part of the organization is quickly moving from

“nice-to-have” to “must-have” capability. Ideally, each guest profile record

should contain all available demographic, behavioral and past purchase

information, with details of the individual’s stated and inferred preferences.

Over time, a database containing multidimensional portraits of guests can

become an extremely valuable tool for multiple departments, including

Reservations, Sales, Marketing, Guest Services and Credit, allowing hotels to

drive increased customer loyalty, brand advocacy and, ultimately, revenue.

Transaction history is especially important. Analysis of guest spending patterns

can be used to create advanced segmentation schemes that increase customer

satisfaction and profitability (e.g., by offering package and amenity upgrade

offers during service delivery) as well as . Many systems now provide complete

folio control, meaning that all of the charges incurred and payments made by

an individual guest or a corporate account during a stay or over a specified

period of time are recorded and can be readily accessed.

Chapter 1

Prospective buyers of Hotel Property Management Systems who may not already be well-versed in some of the more recent trends and technology innovations should spend some time researching the expanded range of possibilities.

Key Concepts


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Revenue or Yield Management. The goal with revenue, or yield,

management is to be able to dynamic ally price room rates based on hotel

capacity. That means being able to forecast demand for available rooms in a

real-time manner. Utilizing algorithmic pricing models, hotels can

automatically adjust for seasonality, events and other factors to help maximize

occupancy at the best possible price. Pioneered by the airline industry, yield

management modules have proven to be effective in optimizing revenue

through dynamic pricing strategies and are today being integrated as a core

component in a growing number of Hotel Property Management Systems.

Customer Relationship Management. Lodging properties can capture a

tremendous amount of valuable information about their guests based on their

transactions and interactions. By continuously enhancing guest profiles with

additional data and by understanding the commonalities of guests by looking

closely at their psychographic makeup and creating useful segmentation

schemes, hotels can maximize the value of guest relationships through

carefully tailored services, communications and offers while minimizing the

cost of resources otherwise expended to build, maintain and increase the

value of those relationships. As the central point of technology and data, and

given the capacity to provide a unified view of how guests are engaging across

all parts of the business on an individual basis, Hotel Property Management

Systems have become the focal point of Customer Relationship Management.

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Hotels can maximize the value of guest relationships through carefully tailored services, communications and offers while minimizing the cost of resources otherwise expended to build, maintain and increase the value of those relationships.

Key Concepts


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This Smart Decision GuideTM is the result of primary and secondary research conducted by Starfleet Media. It was independently produced, without editorial involvement from the company underwriters. Our approach to content production provides for unbiased, fact-based information. It represents the best and most comprehensive information, analysis and recommendations available at the time of publication. Starfleet Media assumes no liability for the use or interpretation of any information contained in this Smart Decision Guide. Purchase decisions based on the information contained herein are the sole responsibility of the individual decision maker(s) and/or the companies they represent. Unless otherwise noted, the entire content of this publication is copyrighted by Starfleet Media. It may not be reproduced, distributed, archived, or transmitted in any form or by any means without the prior written consent by Starfleet Media, except by the company underwriters that have secured perpetual licensing rights to the content. For additional information, please contact Starfleet Media at [email protected].


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The 2014 Smart Decision Guide to Hotel Property Management Systems [Chapter 1]