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How Much PMS Do You Really Need?

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June 01, 2013
Guest Management Systems
Jon Inge - jon@joninge.com

With the growing emphasis on CRM systems, can the PMS be simpler?

We’re at an interesting point in the development of property management systems. Several vendors are developing new systems, though none have yet approached the rich functionality of older products with years of enhancements built into them.  At the same time, many multiproperty brands are looking to replace their existing standard property management systems, but as their strategic emphasis has shifted from central reservations (CRS) to customer relationship management (CRM) they’ve been wondering whether the new PMS really needs to have as much functionality as the old one.

When a franchise brand’s primary strategic system was the CRS (and its call center), mandating the use of one or two specific PMSs at the property level made a lot of sense. It still does, and all brands do it; it minimizes the number of CRS interfaces that need support and helps ensure standard data entry at each property for guest profiles, and increasingly, their history/preference data generated by linked systems on site. However, as hotel loyalty programs grew in prominence they began to centralize all guest information, growing into full CRM systems that quickly took over as the chains’ most strategic applications.  All their customer information and all their marketing efforts are driven from them, and CRS bookings become just events attached to a guest’s profile and influenced by his or her past history. 

Some brands developed their own PMSs, such as Marriott’s FSPMS and FOSSE, Starwood’s Galaxy and Hilton’s OnQ; others standardized on third-party systems. However, in all cases they mandated only the PMS and left it up to the individual properties to decide what to use for their other operational areas.  As a result, several vendors who concentrated on chain-hotel business focused on producing pure PMSs, with functionality covering the traditional core of individual and group reservations, check-in/checkout, folio charges, housekeeping/rooms management and the all-important CRS interface. MSI, RoomKey, Galaxy, SkyTouch and Infor’s epitome and HMS are examples.

Other vendors looking more to the independent and resort market expanded their PMSs to include sales and catering, spa/golf/activity management, CRM and sometimes even POS, both retail and food and beverage. For this segment of the market these integrated PMS applications (from vendors such as Agilysys, IQware, NORTHWIND and PAR Springer-Miller Systems) became their most strategic system. A few companies (including Cenium, IDS, Indra and Prologic First) have taken it even further, extending out into full ERPs that cover every operational area including financial and supply chain operations. MICROS falls between the two camps, offering a well-integrated PMS/S&C/CRS suite but relying on third parties for guest activity management and financial systems.

The real world being what it is, properties seldom fall into one segment or the other. Commercial city center hotels often need sales and catering systems, and many have added spas or other guest activities. Pure PMS vendors therefore developed good interfaces to link up with the third-party vendors’ systems typically used to manage these areas. Conversely, properties in the independent and resort world often already had existing point solutions in specific areas, and so vendors typically made their systems very modular and developed interfaces to link to the other vendors’ products until such time as they could, perhaps, replace them with their own modules. 

As a result, inter-system interfaces have become critical to the success of both factions, and, especially under HTNG’s guidance, many flexible and powerful links are now available. This has led to crossover, with pure PMS vendors successfully partnering with other vendors in offering system sets to resorts and independents, and with business hotels often buying just the main PMS module from resort system vendors. It often just comes down to which system’s functionality and user interface appeals most to the hotel management.

But a new twist has been introduced by the rise of stand-alone CRM systems. Knowing as much as possible about guests’ histories, experiences and preferences has become absolutely critical to success, producing more repeat business through personally targeted marketing and more new business by making carefully targeted offers to similar populations.

To meet this need, many third-party vendor specialists developed good e-marketing campaign management modules based on guest profile databases compiled from PMS folio information, and several PMS vendors added similar modules to their own products. However, the rise of more complete and comprehensive stand-alone CRM suites such as Newmarket’s Libra onDemand has introduced a new strategic system candidate, in many ways rivaling the marketing potential of the major chains’ loyalty programs.

Multiproperty chains looking for a new system therefore have an opportunity to shift. Even if an existing PMS is quite comprehensive, its replacement could be very straightforward, with the remaining functionality filled out with a combination of central reservations and CRM systems. So do the developers of the new generation of PMSs still in development really need to build them out to the comprehensive level of their predecessors, or should they just focus on perfecting their interfacing abilities?

It depends. If you’re an owner/manager of a new-build property, there’s a great deal in favor of having as comprehensive a system as you can get, even up to the ERP level of one system managing the complete operation.  If you’re the owner or manager of a franchised brand property you have no say in which PMS to use anyway, though you’ll get the best results if all your other management systems are as well-integrated as they can be amongst themselves as well as interfacing with the PMS. (For that your best bet is a modular system that does not rely on the core PMS to support its other modules, but these are few; ResortSuite, Indra’s TMS, IDS Next and Prologic First are some.)

There is much to be said for Mike Blake’s (CIO of Commune Hotels and former CIO of Hyatt Hotels) philosophy of “broker, integrate, orchestrate,” leveraging the expertise and accelerated development of system specialists into a multivendor, well-integrated whole. That can certainly be based around a modern, pure PMS, but it requires good partnerships between the vendors and strong central IT coordination to reduce the support issues surrounding the critical interfaces. 

Given the varied demands of the different market segments, there will always need to be a mix of vendor approaches, but whatever else it’s attached to, a well-designed, intuitive and well-interfaced PMS module is still the core of operational success at every property.

Jon Inge is an independent consultant specializing in technology at the property level. He can be reached at jon@joninge.com or at (206) 546-0966.

©2013 Hospitality Upgrade
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