When the going gets tough, it can be tempting to cut back on investment in your property management system, but that could ultimately hurt your business by eliminating an opportunity for boosting operational efficiency. Rosalind Mullen reports.
Many hospitality businesses will have spent this year juggling the demands of getting the business back on its feet post-Covid while battling a chronic skills shortage. Dealing with the long-tail Covid impact of track-and-trace on staff rotas and guest bookings, and managing new cleaning and social distancing expectations, will have presented further challenges for hotels.
As a result, technology has become more crucial than ever for hoteliers – especially those who find themselves short-staffed. Property management systems (PMS), which give centralised control over all operations and enhance guest service, are specially useful. The development of cloud computing, for instance, means PMS servers no longer have to be located on the premises, which allows for faster system implementation, consistent upgrades of new capabilities, and easier and more seamless integrations via open application programming interfaces (APIs).
All in one
In the past, a hotel would require a PMS and then several other applications that integrated with it. Increasingly, however, providers are building those apps into one system. The PMS, channel manager, booking engine, revenue management system and payment processor now all function from one backend, with everything seamlessly integrated.
Richard Castle, president and COO of software supplier Cloudbeds, says: "A hotelier shouldn't have to constantly switch between different systems in their day-to-day work. We like to say that the last thing a hotelier needs is to deal with an alphabet soup of acronyms – PMS, CRS, RMS, CM, IBE, etc. All they need is one platform that allows them to run their business successfully: to increase reservations, streamline operations, and free staff up to deliver more memorable guest experiences."
Post-Covid, that level of versatility is good news. Oracle Hospitality, which launched Opera Cloud in March 2019 just before the pandemic, is one company that has responded quickly to changing demands from hotels and their guests. "There are new priorities," says vice-president of strategy and product management Tanya Pratt. "We look at changes in the marketplace and work out how we evolve and pivot to deliver what is meaningful today."
Pratt, who spent more than 20 years at Fairmont Hotels and Resorts, believes there are three key requirements. She says: "In a nutshell, it's about making guests and the employees feel safe about being together by making transactions touchless. Second, with remote working and furlough, it's about getting the information and knowledge that is in your employees' heads onto the app so that it is accessible to all. Third, it is about making APIs open so apps can talk to each other, with data for anybody to use, allowing an entire hospitality ecosystem to innovate alongside us."
into the cloud
In line with this, more hoteliers have seen the benefit of moving their PMS to the cloud. Pratt says: "About 80% still had legacy systems on-premise, but that couldn't support new business strategies and integration with new partners and advancements. It was also labour-intensive and expensive to support. During lockdown, it made hotels vulnerable as there were no staff on-property."
With staff working remotely or on furlough, hoteliers also wanted greater communication with their teams – and to harness their knowledge. "Before Covid, you could ask the person next to you, but suddenly you couldn't do that. We needed to take information that was in people's heads and make it visible on the software. It sounds simple, but it wasn't there before," Pratt says. "The team got on top of that as soon as they got the feedback."
Guests, meanwhile, wanted touchless transactions. "Because Opera Cloud is fully mobile and cloud-based, guests can check in from their room away from public spaces. This wasn't available in the past," says Pratt. "It was particularly helpful early on in the pandemic when people were bubble-wrapping themselves." Communicating with the guest via their preferred device has also become more important. "We ensure guest profile information is available," says Pratt. "A team member can, for instance, make a note that a guest prefers three pillows – our application allows for that."
Another change is that operators already working from the cloud have demanded a more rapid delivery of new integrations. "They were looking at how to advance and evolve their business model to deliver to customers. Now, new features and functionality can be upgraded more rapidly," says Pratt. "The Oracle platform provides tools to enable customers and their partners to build their own integrations and innovate. It's fast and seamless; quick to market. It would have taken months or years previously."
Castle is also looking to satisfy this trend. He launched Cloudbeds' hospitality platform and is constantly adding channel partners and app integrations. The platform currently connects to more than 300 distribution channels and offers connections to hundreds of apps in areas such as guest experience, guest communications, housekeeping and point of sale.
Castle adds that short-staffed employers should be looking for a PMS that can reduce administrative work. Artificial intelligence, for instance, can be used to automate manual repetitive tasks so that fewer staff are needed.
"When you're short-staffed, you have less time to deal with the manual work that comes with updating, much less maintaining, your rates in different extranets across different distribution channels," he says. "Does your PMS allow you to simply update the room across every channel instantly in one click? Can you set pricing rules that automatically update your rates based on what prices your competitors have set? If you have a short-term cancellation, is it possible for you to instantly make that inventory available again to sell?"
Calum McIndoe, director of sales UK & Ireland at PMS supplier Infor Hospitality, also identifies the staffing benefits of tech. "If you can convince more than 50% of your guests to check in and out digitally, do you need as many front-desk staff? If you can manage the room attendants and housekeeping more efficiently, can you reduce head count here also?"
No wonder, then, that the pandemic has led to the greater adoption of PMS apps. For instance, hotel departments that hadn't previously linked into a PMS are seeing clear benefits from going mobile. Take housekeeping. The head-housekeeper can now send attendants their duties via an app on their mobile device, all ranked in order. "It's all digital," says McIndoe. "Gone is the endless time spent trying to find a room attendant when something in a room needs to be corrected." The PMS app can also be used to launch a maintenance request. And even to manage social distancing and contact tracing.
On the subject of social distancing, there's a handy new authorisation app on the market. It works for certain front-desk functions such as rate overrides, room-moves or large currency transactions that require authorisation from a supervisor or manager.
"Post-pandemic, the manager might be working from home, or wanting to socially distance so may not be as available as before," McIndoe explains. "The PMS can now be set to send a message to the authoriser's mobile device when required and receive back the authorisation to complete the task." Lost opportunities?
The UK hospitality sector has taken a bashing from the pandemic and its associates lockdowns, so how does a hotelier balance making an investment in installing or upgrading their PMS with applying resource to solve some of their many other headaches?
"The time when things are tougher or slower is when it is more important to be more strategic about those investments," says Pratt at Oracle. "Hoteliers need to think about the opportunities that will be lost if they remain on whatever legacy system they are on today."
Castle at Cloudbeds, agrees, underlining his point that ideally a PMS needs to be part of a larger platform that allows for the automation needed to achieve operational efficiency. It should also serve as a data insight tool that you can use to analyse business in real-time.
"It's all about automation and the seamless integration between the systems needed to make your business run smoothly and successfully. A PMS isn't helping you if you're still putting in hours of work that you can easily eliminate through automation."
Not just for the luxury end of the market
Smaller hotels can also benefit from a property management system, although they tend to go for more affordable cut-down systems than bigger companies do. PMS supplier Little Hotelier, for instance, designs systems for properties ranging from two to 30 rooms, with a basic package that starts at £30 a month plus 1% of total booking value.
Product director Harini Boppana says: "It's perfect for small hotel businesses that want to pay less when there is low demand. For example, if their total booking value is £1,000 a month, then 1% equates to just £10 a month."
The less complex system, which takes just an hour to set up, can still manage reservations and room allocations, take payments securely, distribute rooms, and sync all this activity across all a hotel's systems so there is no double-booking of rooms or missed bookings. Customers can get insights into how they're performing and there is also a mobile app.
In the wake of the pandemic, a feature has been introduced into the PMS that allows guest payments to be taken upfront. This means hoteliers can lock in revenue faster and more easily, as market conditions evolve. "Likewise, we got serious about invoices to support small accommodation providers in markets where local regulations were tightening," Boppana says. "We also delivered multifactor authentication, and made our app available in more languages – it now supports English, French, German, Indonesian, Italian, Portuguese, Spanish and Thai."
For businesses that want more predictable costs, Little Hotelier Pro costs a fixed rate of £69 a month, and allows add-ons such as metasearch bookings, a hotel website builder and the ability to search competitor rates.
The cloud-based system opening up Acostay's horizons
Australian-based Acostay Hotel Group has been able to leverage the pandemic as an opportunity to test the cloud as a platform for a new business model.
Even before the Covid-19 crisis, the management company – which owns and operates Great Southern Hotels in Sydney, Perth, Melbourne and Brisbane, plus another in Colombo, Sri Lanka – was migrating to Oracle's Opera Cloud in a bid to reduce costs through the elimination of on-premises servers, faster innovation with continuous software updates, and centralised data that can be accessed from anywhere with mobile devices.
It also helps with staffing costs. Acostay director Robbie Owaijan says: "Labour is the biggest cost for any hotelier, and we addressed it by moving many of our departments – for example, reservations, accounts receivable, accounts payable, and finance – to an offshore setup, where the cost of doing business is much lower than in Australia.
"Our plan is to move back-office operations at each of our properties, shifting more than 40% of our total workforce and reducing labour cost by 30%. The reorganisation wouldn't be possible without Opera Cloud, which is allowing us not only to consolidate our business but also to get a better understanding of what's happening within it. Our employees can now access business-critical data in real time, share information with each other, and execute day-to-day activities at our hotels – without being on site."
An added benefit is that the PMS allows Acostay to continue developing its business model. The efficiencies and centralised control achieved will allow it to transform into a hotel management company for budget hotels, both independents and franchisees.
"We're confident that what we've achieved at our properties we can do for others. We have a model to increase hotel profitability, and we know it's one that works because we witnessed its performance during the pandemic," Owaijan says.
"When Covid-19 hit, we were slammed by a loss of income. While many hotel operators shut down their hotels, we managed to fill more than 100 rooms every night, mostly by providing healthcare workers with a safe place to stay. We operated efficiently and took care of our guests' needs because our employees could access their relevant information on Opera Cloud PMS remotely.
"There's a shift occurring within the hospitality industry, from prioritising physical infrastructure to looking at technology as an enabler of change. This trend is not limited to luxury hotels. By capitalising on that movement, there is a significant opportunity for budget hotels to take their service level up and to increase revenue."
Sponsor's comment: Infor
Hospitality is about connection and experience. A robust hospitality cloud platform helps you understand the competitive landscape from a higher vantage point. It lends a clearer view of how to better serve guests, find new revenue opportunities, and optimise existing ones. That helps inform your vision across all properties to enable you to meet the future with greater confidence.
Each solution plays its part to create an end-to-end and scalable technology platform:
- Hotel PMS – the central hub of operations and CRM
- Revenue and price management – to forecast and analyse revenue opportunities and set competitive rates using AI, 24/7, 365 days a year.
- Sales and catering – managing hotel amenities and events and end to end in a user-friendly way.