How to choose the best hotel PMS (and how to recover if you didn't)

In the dynamic and ever-evolving world of hospitality, the choice of a PMS stands as a pivotal decision for hoteliers. It's a choice that can shape the future of a hotel, impacting everything from operational efficiency to guest satisfaction. Yet, navigating through the labyrinth of options can be an overwhelming task, riddled with pitfalls and false promises. With over 33 million Google search results for the term "PMS" and countless providers claiming to offer the best solution, hoteliers find themselves in the paradox of choice, where too many options lead to indecision and confusion.

This article aims to unravel the complexities of choosing the right system, shedding light on the common pitfalls and misconceptions that hoteliers face. Whether you're considering a change in your current PMS or embarking on this journey for the first time, this article will equip you with the knowledge to make an informed, strategic decision.

The Paradox of Choice

Diving into the world of hotel PMS can make your head spin. There are just so (too?) many options out there! Do a quick Google search for "hotel PMS," and you'll get over 33 million results. Even vertical platforms like HotelTechReport list 273 PMS providers, and LinkedIn has more than 1,000 options. It's literally like trying to find a needle in a haystack. When faced with this many choices, hoteliers can feel stuck, unsure of which PMS to go for. And this is when the PMS providers go all out with their marketing, trying to grab your attention.

Beyond the Sales Pitch

Hey - don’t get me wrong- there's nothing bad with marketing your product. Well, as long as you can DELIVER! The problem is that, often, this is not the case. There's a hilarious subreddit titled "Is there a not-crap PMS?" and what we can learn from it is that the tricky thing about PMS implementation is that it is pretty much impossible to see the red flags until you've already committed and started using the software. And by then, it’s usually too late.

"Changing your PMS is like entering a marriage without prior cohabitation. Making concessions (or getting a divorce) becomes the only two options."
~ Hotel General Manager, 4-star property

So, let's try to debunk some of the most obvious marketing (false) narratives surrounding PMSs:

Decoding the Timeline
Some PMS providers promise quick setup and implementation times, claiming you'll be up and running in just one (1!) day! But if that sounds too good to be true, it's often because it is. You might get caught up in these promises, imagining your system operational within 24 hours. However, fast forward to reality, and you might find yourself with unexpected problems three months later.

Let's take the front office department as an example: issues can range from splitting invoices, merging bills or rooms, handling no-shows, processing payments in multiple currencies, dealing with a combination of cash and credit card payments, incorrect city tax settings, etc. Good luck predicting these issues, even with a perfect RFP! At HotelTime Solutions, we know the time required for implementation varies based on the complexity of the hotel's operations, the number of personnel involved, and the scope of training across different departments.

Additionally, the hotel's collaboration level, particularly in data migration and manual input tasks such as entering bookings, rate codes, segment structures, revenue account setups, and payment automation, is crucial. While the basic setup of a PMS can be accomplished in a matter of hours (sic!) or days, comprehensively understanding the Standard Operating Procedures (SOPs) and tailoring training sessions for each department requires weeks (if not months).

A quick setup and a video tutorial might suffice for simpler tasks, like check-in at a small, straightforward city hotel with 40 rooms. However, in more complex environments, such as hotels with multiple outlets, varied guest segments, and numerous departments, the PMS provider should allocate more time to ensure all stakeholders are proficient with the system. That being said, although we have successfully completed some implementations in just one week, this accelerated process is more the exception than the norm, and we certainly won’t put it on our brochure…

"A prevalent issue I experienced recently is the failure of some PMSs to retrieve and save historical data from previous systems. This resulted in the loss of the entire database for some of our clients, significantly impacting our ability to conduct newsletter campaigns."
~ Tony Loeb, Co-founder of Experience CRM and Host of "10 min pour un hotelier"

APIs: Quality Over Quantity
Just because a PMS offers open APIs and can connect to many different systems doesn't mean they're any good. What matters is how deep and meaningful those APIs are, especially in a data-heavy industry like ours. A superficial API integration might not give you all the necessary info, leading to bad business decisions.

Let's take the implementation with RMSs as an example. Imagine you've got this flashy, new Property Management System that claims to be fully integrated with your RMS. Sounds fantastic, right? Well, not so fast. The integration might be there, but it only processes a tiny slice of the information you actually need for accurate pricing decisions. Sure, you could try to sift through the API documentation to figure it out before picking a PMS, but let's be honest: who - in our industry - understands any of that nonsense? And once again, you might not realize any of this until you're knee-deep in the implementation process and things start going sideways.

"Last summer, I trialled a PMS for a client of mine. They guaranteed seamless integration with my channel manager, promising that occupancy-based selling would be feasible despite my per-room pricing approach. The reality? A bug disrupted the integration between software, hampering the management of Double for Single Use rooms... Furthermore, the touted occupancy-based pricing feature was, in fact, non-existent."
~ Hospitality Consultant

The Impact of PMS on Accounting and Financial Reporting
As we have already seen, the most challenging problems arise only after implementing a new property management system. This is especially true for accounting-related issues, which can be insidious and damaging, and usually only become evident during monthly audits or reviews. This delay in problem detection means that errors, discrepancies, or inefficiencies can persist for weeks before being identified.

The situation becomes even more critical with year-end accounts. Problems in the PMS that affect accounting might only surface at the close of the fiscal year, and this delayed revelation can lead to significant financial discrepancies, affecting the hotel's overall financial health and reporting accuracy. It can also severely impact management’s ability to make informed decisions, as budgeting, forecasting, and financial planning rely on timely and accurate financial data.

Not to mention that accounting errors or delays in financial reporting can also pose compliance risks, especially in jurisdictions with stringent financial regulations. Hotels might face penalties, audits, or legal issues if their financial reporting is not up to par, a risk that increases with the scale of the accounting error or delay.

For bigger properties, persistent accounting problems can eventually erode the confidence of stakeholders, including investors, partners, and even guests. This loss of trust can have long-term implications for the hotel’s reputation and financial stability.

The Consequences of Inadequate PMS Reporting
Just like accounting/financing issues, problems in reporting may not become immediately apparent. They often surface during routine reviews or audits. This delay means that data inaccuracies or reporting errors continue to affect decision-making processes and strategic planning until they are identified and resolved.

A PMS that does not meet the specific reporting needs of a hotel can lead to inadequate data analysis, impacting everything from marketing and revenue management strategies to operational adjustments. Insufficient reporting can also leave management without the insights needed to make informed decisions, adapt to market changes, or identify opportunities for improvement.

An ill-suited PMS might also struggle with managing user rights effectively, leading to unauthorized access or, conversely, restricted access to information that certain staff members need.

Big Hotels? Bigger Problems!
For resorts or bigger properties, implementing an unsuitable PMS can lead to specific challenges. Resorts often have more complex and varied revenue streams, from room rentals to recreational activities, dining, golf, and SPA services. These services may need to be billed separately and assigned to different revenue accounts. A PMS that lacks the flexibility to segregate these items accurately can lead to accounting complexities and errors in financial reporting.

Moreover, different products and services may be subject to different VAT rates. Suppose the PMS cannot correctly apply and track these varying rates. In that case, it can lead to tax reporting errors and serious financial and legal implications, including penalties for incorrect tax submissions. Not to mention that, in resorts, guests often make multiple transactions during their stay, which need to be consolidated accurately into a single invoice at checkout. A PMS that cannot handle this consolidation effectively may result in billing errors. And, of course, resorts often use additional systems for reservations, point of sale, and other functions.

The PMS should integrate seamlessly with these systems to ensure consistent and accurate data flow across all areas of operation, so resort managers need to select a PMS that is robust and reliable and specifically tailored to handle the complexities of resort management.

“We upgraded from our outdated on-premise PMS a few years ago to a more advanced and efficient technology. We saw this as an opportunity to improve our operations by selecting the best solution available in the market, so we decided to go with one sold to us as a state-of-the-art platform offered by a reputable and globally recognized company. We were among the first hotels in our Country (Italy) to adopt it. The dream soon became a nightmare: the team in charge of the implementation was unprepared and did a very superficial and disappointing job, leaving us with many problems to solve on our own, because their customer care was a disaster as well. Their excuse was that "the software was too new, and they were still learning". We were even contacted by other hotels at the time, desperately facing the same problem, and had to pay an external consultancy company specialized in that software to help us make the PMS work! Another big problem is that, like most large corporations, the provider tends to prioritize their biggest clients, and they are not updating our software version: we were left behind on at least four updates. Whenever we try to reach them and demand the missing updates, they reply "We are working on it". It's been more than a year since the last one…”

~ Marketing Manager, 5-star Luxury property

BI: A Fancy Name for PMS Shortcomings?
In our industry, BIs are increasingly seen as a vital tool for addressing issues that arise at the PMS level. However, this (over)reliance on BI can sometimes mask underlying deficiencies in a PMS, particularly regarding data management and reporting capabilities. Some PMS providers heavily promote their systems' integration with BI tools and, while BI can indeed enhance data analysis and decision-making, it should not be used as a substitute for fundamental PMS functionalities like data accuracy, comprehensive reporting, and user-friendly interfaces. Even the best BI tools can't fully compensate for these shortcomings when a PMS lacks these core capabilities.

Moreover, BIs are designed to analyze complex datasets and provide insights that might not be immediately apparent (BIs are aptly named "intelligent" because they possess the ability to analyze data and provide insights that can be acted upon. Without this capability, they would merely be referred to as business reporting…). However, if the data sourced from the PMS is flawed or incomplete, the insights generated by BI tools will be unreliable, leading to poor strategic decisions based on inaccurate data.

Relying on BI to cover PMS deficiencies might give hotel operators a false sense of security about their data management and reporting capabilities. This overconfidence can lead to neglecting much-needed upgrades or replacements of the underlying PMS. And, ça va sans dire, implementing and maintaining BI solutions can be costly. If a hotel is forced to rely on Business Intelligence due to a deficient Property Management System (PMS), it incurs additional expenses that could have been avoided with a more capable PMS. The bottom line is that, if a PMS HAS the data, it should be also able to accurately REPRESENT the data.

"A client of mine recently moved to a new PMS, lured by the promise of a reliable new interface. Yet, frequent outages occurred multiple times weekly. The interface with our existing tech stack only functioned asynchronously due to high volume, causing delays in booking transmissions. Furthermore, while it was marketed as a singular interface for both on-premise and cloud environments, the reality proved vastly different, requiring a completely separate interface."
~ Hospitality Consultant

Stubbornness and Denial
This is an under-discussed problem: the reluctance of managers to acknowledge the PMS's shortcomings, especially if they played a pivotal role in selecting the vendor. Managers who were instrumental in selecting a PMS (or whatever software, for that matter) might find it difficult to admit that the system is not meeting the hotel's needs. This resistance can stem from a desire to avoid admitting mistakes, fear of repercussions, or a belief that the system will eventually meet its promised potential.

In some cases, managers may defend the PMS, rationalizing its failures or attributing issues to other factors, such as user error or external circumstances. This defence can delay the identification and resolution of genuine system-related problems. The problem is that, when management is in denial about a system’s deficiencies, it can negatively affect staff confidence, and employees who struggle daily with the system's flaws may feel frustrated if their concerns are dismissed or not taken seriously. This situation can lead to decreased productivity and job dissatisfaction.

Defending an ineffective PMS often means investing resources into making it work, including additional training, hiring consultants, or purchasing supplementary tools, resources might be better utilized elsewhere. And hey, what about consultants? Sure, consultants can offer valuable expertise and insights, but there are potential pitfalls when hoteliers outsource this critical decision-making process.

This reliance becomes problematic particularly if consultants have vested interests that may influence their recommendations. One of the primary concerns is that some consultants may have financial incentives, such as commissions, to recommend specific PMS solutions. This conflict of interest can lead to recommendations more aligned with the consultant's benefits than the hotel's.

Moreover, consultants might not always understand the unique challenges and requirements of each hotel they work with. Not to mention that some consultants may not be up-to-date with the latest technology trends or might have biases based on their past experiences. This situation can lead to recommendations of outdated PMS solutions or not in line with the latest industry standards and practices.

Talk To Your People, Please!
To fully grasp the potential problems with a PMS, it's essential to TALK to each department - from the front office and housekeeping to accounting and management - to understand their specific needs and challenges. A PMS might work well for one department but cause inefficiencies or problems in another.

Moreover, there can be diverse opinions about how processes should be managed. For instance, front-office staff may prioritize ease of use and guest interaction features, while accounting might focus on reporting accuracy and financial functionalities. Reconciling these differing needs and perspectives is crucial for choosing an effective PMS. Involving a cross-section of staff in the selection process is crucial to make an informed decision.

This approach ensures that the chosen PMS meets the diverse needs of the entire hotel, similar to how a well-rounded employee would fit into various aspects of the business. Yes, because -to a certain extent - selecting a new PMS can be compared to hiring a new employee.

Decision-makers may be influenced by superficial factors such as the system’s interface (look) or marketing claims (confidence), rather than the actual capabilities and fit with the hotel’s operations (qualifications). As a friend of mine always repeats: "if someone gives you a great impression during a job inteview, it doesn't mean they're good for the role, it just means they're good at interviews…"

"The installation of our hotel's access and room system to the new PMS has been a nightmarish experience. I (involuntarily) became the beta-tester of a system that was sold as fully operational… Turns out that it “might” reach its promised functionality in several months, or even years. To add insult to injury, all related IT costs are on me. A disaster!"
~ Hotel General Manager, 5-star property

The Value of Failure
As always, learning from previous mistakes can help. If you implemented the wrong PMS once, it's improbable that you'll make the same error twice. Errare humanum est, perseverare autem diabolicum! These lessons can be instrumental in guiding future decisions and improvements. Analyzing these failures helps pinpoint specific areas where the system fell short and not make the same error again.

Failures during implementation can also reveal gaps in understanding the actual needs of the users – the hotel staff. It might become clear that the system is too complex for daily operations, lacks essential features, or does not align well with the hotel's existing workflows. If a PMS fails to be implemented successfully, it could also indicate inadequate training and support. Perhaps the training provided was not comprehensive or didn't consider the varying skill levels of different users. Learning from these mistakes can lead to more effective decisions and improve future selection processes, ensuring a more thorough evaluation and alignment with the hotel’s needs.

The relationship with the PMS vendor is also crucial pre/mid-implementation. Failures might highlight issues in vendor communication, responsiveness, or support. Learning from these aspects can inform future interactions or guide the selection of vendors for other systems. The same can be said with managing change within the organization. Resistance from staff, poor communication of the new system's benefits, or inadequate leadership during the transition can all contribute to implementation issues. These insights are valuable for guiding more effective change management strategies in the future.

"A common challenge involves managing databases. Frequent issues include data synchronization, check-in and check-out process completion, and room account management. These issues not only delay operations but also tarnish the perceived efficiency of the hotel staff. Further complications arise from less intuitive and immediate than promised data extraction, with reporting features that lack user customization and sub-par grouping of guest data.”
~ Travel Tech Provider

The True Cost of PMS Ownership
Ah, the cost of ownership... That's a funny one! While the initial price of a base PMS might appear affordable, the overall expense can escalate significantly when additional factors are considered. Often, in the excitement of implementing a new tool, hoteliers might not conduct a thorough cost-benefit analysis. This oversight can lead to surprises down the line, when the total costs become apparent.

The initial cost of a PMS often covers just the basic system. However, hotels typically require additional features and integrations, each of which can add to the total price. These might include integrations with online booking platforms, point-of-sale systems, CRMs, and other essential hotel operations software. The cumulative cost of these integrations can be substantial.

Beyond integration costs, moreover, there are ongoing maintenance and upgrade fees to consider. Software systems need regular updates to remain secure and functional, and some PMS providers charge extra for these updates, adding to the total cost of ownership. Training programs or dedicated support services can also incur additional costs, which might not be included in the system's base price.

In some cases, then, alternatives that might offer better value for money are not fully explored. This could be due to time constraints, lack of awareness, or a rushed decision-making process. As a result, hoteliers might overlook more cost-effective solutions that offer comparable or even superior functionality.

Additionally, when a hotel needs to integrate third-party solutions to make up for missing essential features in their Property Management System, extra costs can (and, usually, do) arise. These costs might stem from integrating services such as BI/reporting tools, insufficient group booking and event management capabilities, as well as housekeeping and maintenance tools. And this issue is just the tip of the iceberg! The lack of certain necessary functionalities can lead to an increase in manual labour, driving up costs and detracting from the overall guest experience while also increasing staff frustration.

For example, the absence of automated payment processing tools, complex invoicing procedures, limited integration with document scanners or payment terminals, and cumbersome night audits and accounting data reconciliation can necessitate manual work in accounting or reservation departments. Furthermore, the installation of on-premise PMS systems, which remains (believe it or not) common, can incur additional IT-related expenses for infrastructures.

Conclusion: Future-Proof Your Hotel
Last but not least, it's important to emphasize the dynamic nature of our industry and how changing circumstances can impact the suitability of a PMS over time. The needs of a hotel are not static; they evolve with market trends, customer expectations, and the hotel’s growth trajectory. A PMS that seems perfect today may not meet the hotel's needs tomorrow.

Choosing a system that can adapt and evolve in line with these changing requirements is essential. Hotels, moreover, often undergo transformations such as acquisitions, expansions, or rebranding. Each of these changes can bring new operational complexities.

A flexible and scalable PMS is crucial in seamlessly managing these transitions without disrupting existing operations. And of course, the rapid pace of technological advancement means that what’s cutting-edge today may become outdated in a few years (look at the whole OpenAI soap opera...). In a nutshell, the ever-changing landscape of the hospitality industry demands a PMS that is functional today and adaptable for the future.

As we have seen, you must consider various factors, from technological advancements to operational changes, when choosing a PMS. It's a pain in the butt, we know, but, by selecting a system that can grow and evolve with you, you can also ensure a long-term, beneficial partnership with your provider, which is crucial for maintaining operational efficiency, guest satisfaction, and overall business success in our dynamic industry. Especially considering the future has its own, funny way of showing up uninvited…