When soliciting proposals for new or replacement PBX systems (whether for new builds or existing hotels) most properties invite industry solution providers to submit bids or proposals for both options – premise and hosted/cloud. For many years, premise-based options offered a better ROI when factored over the long term. That’s because monthly licensing costs for hosted options (typically based on the number of extensions) were just too high – especially for guestrooms where phone use is limited to ordering a cheeseburger and fries from room service. Additionally, many operators looking to reduce opex costs are also turning to time and materials (T&M) support options, which have proven advantageous for most stable installations.

The primary factors that have led to this shift include:

Reduction in licensing costs: 

Like most subscription-based applications, hosted PBX solutions typically have a monthly recurring cost (MRC) made up of a number of items including hosting fees, hardware equipment, support and PBX license fees. Until recently, the price for some primary application providers was fairly expensive, particularly when you factor in guestroom extensions. This resulted in
a cost prohibitive MRC for many hotels, especially larger properties with room counts that resulted
in a much higher long-term cost than that of premise-based options. Recognizing that the feature requirements for guestrooms were substantially different than that of administrative phones, systems providers started to focus on restructuring licensing fees to provide for lower cost options that included pricing based on functional features and, in some cases, occupancy.

Lower communication costs: 

In some cases, hosted providers are including charges for session initiation protocol (SIP) trunking, which uses the internet instead of phone lines, as part of a hotel’s MRC. They’re also including either an allocation of minutes and/or free local and long-distance minutes, although they still charge for international and toll-free calls.

Centralized services: 

One of the major advantages for brands, management companies and operators who have multiple properties is the ability to centralize services between properties at little to no additional cost. Additionally, there are no communications costs associated with these calls. This can represent a large savings in labor costs for properties that can centralize operational or streamline services during off-late-night or off-peak periods.

Redundancy options:

While premise-based systems offer local redundancy, hosted/cloud-based products also have the ability to reroute calls to other lines – and even cell phones – should there be a disruption or cut in communications at the property. Most system offerings are also set up for failover to multiple data centers to provide additional system redundancy in the cloud. Properties seeking additional redundancy can receive a survivable node at the property level.