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  27 Dec 2021
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How Hotel Management Works


The Hotel Industry is an umbrella term for businesses under the service industry and catering for customers who require overnight accommodation. In this sense, motels, inns, vacation rentals, etc fall into the Hotel Industry.

The Hotel industry is one of the fastest-growing sectors in the 21st century and as it expands, so do its management requirements. What goes on behind the scenes? And how do successful Hotels manage their operations?

This article elaborates on how hotel management works and a crucial tool used in hotel management - how Hotel Management systems work.

What is Hotel Management?

Hotel management is an area of the hospitality industry that involves overseeing the operations of a hotel property. From the largest hotels to the smallest cafeterias, all such businesses form an important part of the hospitality industry.

Generally, systems and tools used in Hotel Management can be used in Hospitality management as well.

Hospitality management refers to the application of management concepts and structured leadership in the areas of accommodation, dining, and general guest services.

What is a Hotel Management System?

A Hotel Management System or Hotel Property Management System (PMS) is a centralized online system that manages day-to-day operations in a hotel. This includes organizing tasks, managing bookings and reservations, account management, occupancy management, and much more.

A Hotel Management system serves as the ultimate organizer for businesses that are looking to automate their workforce and maximize efficiency

For a thorough guide on what a Hotel PMS is, be sure to check out this article -

https://www.bookingninjas.com/blog/what-is-property-management-system-pms

Purpose of Hotel Management System

A Hotel PMS serves one principal purpose: to make the daily operations of hotel management easier.

It does this by achieving several objectives as follows:

Maximize Revenue

Many components of a Hotel Management system are designed to give the user control over operations like updating rates, customer relations, and other factors that contribute to revenue generation.

Revenue Management and Yield management are techniques that are made easily implementable by the use of a Hotel PMS.

Read more on the Difference Between Yield Management and Revenue Management

Reduce Manual Workload

Asides from the power and control that a Hotel PMS provides about Revenue generation, reduction of manual workload is another reason why many hoteliers seek the help of a PMS.

Tasks that could take hours to run through or require multiple hands on deck can be easily automated with the use of an effective PMS.

Manage and Analyze Data

By collecting accurate data and updated reports and analyzing this information, Hotel PMS enables you to predict customer behavior, determine if your marketing strategies are effective, and much more.

A Hotel PMS documents and provides detailed analysis and reports in a way that is clear and easy to understand.

Centralize Operations

A very crucial objective of any Hotel PMS is to centralize all the operations of your hotel. Why have multiple applications and tools scattered with information about your hotel when you could handle all of the management of your Hotel in one central software.

Even better, good Hotel PMS can easily integrate with your favorite third-party applications which your Hotel can't do without. Centralizing your operations brings about better organization, seamless workflow and, cuts down cost on multiple applications.

Reference: https://hoteltalk.app/t/main-objectives-of-using-hotel-software-pms-or-front-office-system/1618

How a Hotel Property Management System Works

A Hotel PMS is simply a bundle of components that work together in harmony to create a centralized system. A system that can handle the different challenges in your hotel management.

Therefore to have a deeper understanding of how a Hotel Property Management System works, you must understand how the various components work.

Components of a Hotel Property Management System (PMS)

Hotel Reservation System

A Hotel reservation system is a core feature of any property management software. It's a software tool that allows you to digitize your reservation calendar, allows your customers to make their reservations online and also make their payments.

Front-desk operations.

A front-office module allows your front-desk manager to view and update room reservation status, check guests in and out, and process payments.

Channel management.

A channel manager connects your Hotel reservation system directly to distribution channels such as Online Travel Agencies (OTAs) and metasearch engines. It makes room inventory available to travelers who want to book a room or property online by listing the available rooms on different sources.

Revenue Management System

Revenue management system enables dynamic pricing. You can easily price the rooms based on past reservations, competitors' rates, weather data, local events, and other factors.

It improves pricing strategies, and updates prices across all distribution channels to sell more rooms at the optimal rate.

Housekeeping Management

Housekeeping functionality includes management of room status, housekeeping staff assignment for room cleaning, keeping lists of tasks for housekeepers, and more.

Point of Sale

It automates transactions and keeps financial data in one place. Most hotels have some kind of restaurant on the premises, not to mention properties with gyms and spas. With a Point of Sale system, hoteliers can include additional costs or discounts to the final bill for each customer.

Food and Beverage Costing

Food and Beverage costing can be easily manipulated with this component of a PMS. This also plays a role in yield management.

CRM and Customer Data Management.

A CRM (Customer Relationship Management) helps store guest data and provides a database that's easily accessible. This also includes guest contact information before and after their stay, guest experience measurement, loyalty programs, and personalization tools.

CRMs can exist alone outside of a PMS and if that is the case, a PMS can integrate with the CRM to ensure no data is lost.

Reports and Analytics.

To monitor current processes and understand business performance, reports and analytics are vital. A PMS helps in collecting relevant data and providing hoteliers with various types of automated reports such as audit reports, room and tax reports, shift audit reports, departure/arrival reports, housekeeping reports, or other ongoing reporting.

Back-office Management.

Some PMSs provide back-office management features. These features include email campaign management, internal messaging, and accounting.

Who is Responsible for Operating the PMS in Hotel?

Typically, a General Manager is responsible for heading the administration of a Hotel PMS but, they are not the only ones that operate the PMS in the hotel.

Front desk officers, IT staff, revenue manager, and various other roles in a hotel are involved in the operation of a Hotel PMS.

Benefits and Advantages of Hotel Management System

Have Control Over Your Business

There's one thing in common in all of the features which have been mentioned. It is the use of technology in helping you have more control over how the affairs of your business are run.

Take a chain of hotels for example, how do you run all the properties at the same pace when they are in different locations, being run by different staff and you're not even there?

With the use of the right PMS, you can have proper control over all of your properties and know how each of them is doing.

Have a Proper Management System For Your Employees

Give no room to slacking off on your team and amongst your staff.

With everything being automated and properly documented, you can have proper management of all the members of your staff.

From housekeeping to maintenance, security, and safety, you can ensure all hands are on deck.

Integrate with Third-party Applications

Many useful third-party applications are important in your business and need to be integrated with your existing systems.

A PMS will help you integrate with these third-party applications easily and run everything from one place without any hassle.

Some of the PMS software already have existing relationships with these third-party applications and working with them helps reduce cost, save time and get you the best service available.

High Efficiency and Time Saved

It's no surprise that any successful hotel establishment or real estate facility is dependent on a PMS of some sort to manage their property.

This is because its utilization of technology helps to increase overall functionality and in the end saves time.

You can now focus on other things involving your business since you have all these other things under control.

Increase Revenue

Revenue management refers to the strategic distribution and pricing tactics you use to sell your property's perishable inventory to the right guests at the right time, to boost revenue growth.

You can achieve this through the use of data reports and analytics to help you to predict when they'd be in high demand and thus influencing the pricing of the services you deliver.

In the end, it helps to boost your establishment's finances.

How Long Does it Take To Implement a Hotel Management System

Many times, Hoteliers are interested in adopting a PMS but are hesitant because nobody likes change especially when it takes a long time.

Luckily, most good Hotel Management systems take a reasonable amount of time to be implemented in your Hotel. For example, Booking Ninjas, an all-in-one PMS, only takes about 4 to 8 weeks to implement.

List of Hotel Management Systems

Here is a list of Hotel Management Systems to try out. They offer demos/free trials so you can take a test run before going further to adopt the PMS fully.

  • Booking Ninjas
  • Hotelogix
  • Opera PMS
  • Hoteliga. ...
  • FCS CosmoPMS. ...
  • SkyTouch Hotel OS. ...
  • Cloudbeds. ...
  • Smart Hotel Software.

Conclusion

Hotel management is a serious business that could pose a real headache to many. That's why Hotel management systems have been put in place to give hotel managers maximum control over their hotel.

The benefits of using PMS technology in hotels are plentiful especially in an era where customers have the highest expectations and all your competitors are leveraging PMS technology as well.

Want to find out if adopting a new PMS for your hotel management is right for you? Schedule a discovery call with us today.