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PMS and CRS: Shotgun Wedding

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June 01, 2010
David Sjolander - dsjolander@gmail.com

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Imagine you are the CIO of a major hotel chain visiting your data center after just rolling out a new centralized property management system (PMS).  Standing in the middle of the corporate data center, you find yourself staring at row upon row of servers.  One bank runs your central reservations system (CRS), and another runs your new PMS.  And it suddenly occurs to you that with PMS centralized, you now have two systems sitting side-by-side providing largely redundant functionality.  You spent millions of dollars developing or buying these systems, you will spend millions more operating and maintaining them, and yet you still suffer through the ongoing hassles and costs of integrating the two.

Problematic, expensive and redundant, the standalone CRS and PMS are on borrowed time.

The PMS was born in the late 70s and early 80s on platforms that were, at the time, called mini-computers.  They were only “mini” compared with their predecessor mainframes and had the advantage of not requiring computer rooms with raised floors or IT staffs to run them.  As room racks and NCR4200s were removed, TI-990s, IBM Series-1s, IBM System 34s and others were installed.  At the time, no one envisioned a centralized PMS, and few vendors even offered a multi-property PMS.  They were designed to run inside a single hotel, and that’s what they did.

At about the same time, hotel chains opened central reservations offices, and it didn’t take long before the CRS was created to automate them.  The functionality required was a bit different from the PMS.  The system didn’t need to worry itself with anything that happened after the guest arrived at the hotel, but it did need to allow a call center agent to search for a hotel based on various criteria and provide extremely detailed information on the hotel facilities, inventory and pricing.  It also had to enforce every rule programmatically, leaving no judgment calls to the agent.  Pretty soon the CRSs were connected to global distribution systems (GDSs) and later, online travel agents (OTAs).  Web booking engines appeared soon after the Internet became a reality, and the architecture we have today was largely and firmly established.

Within the last five years, centralized PMS have become a technical reality.  Cloud computing has caught on, and the attractiveness is compelling. Several chains have now rolled out browser-based PMSs, including Wyndham, Choice, Carlson and others.  For the most part, smaller chains and independents are still using property-based PMSs, but they generally use on-demand (or software as a service – SaaS) reservations and distribution platforms from a variety of vendors.

It is hard to imagine a future in which a standalone PMS or CRS makes sense anymore. Ironically, the large hotel chains may be the last ones in the check-in line.  With tens of millions of dollars invested in proprietary CRSs that will not make a good architectural foundation for this new environment,  and with little, if anything, on the market that can scale to thousands of hotels, they are poorly positioned to make the change.  Rather, it is independents and small chains who are poised to be pioneers this time around.

Are you with an independent hotel in need of a new PMS?  Instead of using different systems and providers for PMS and CRS, why not go with a vendor who can provide a hosted PMS with an integrated Web booking engine and  connectivity to all GDSs and a variety of OTAs?  This vendor will not only provide the software, they will host it, operate it professionally and securely, and charge you based on a subscription or transaction fee.  Are there companies out there today who can do this?  Yes, there are a few.  However, if you are a buyer looking for this combined solution, you should tread carefully.  The products on the market are few, and they are first generation.  It may not be in your best interest to jump into this world too quickly unless you have a tolerance for being on the “bleeding edge.”  However,  these systems are evolving quickly, and the options will be plentiful in the very near future.

If you work for a PMS or CRS vendor, and you don’t have a strategy for this evolution, you should be nervous.  Because, like the room rack vendors of yesteryear, your company will be irrelevant in five years, 10 years at the very most.

So what about our enlightened CIO back at the data center?  He is mesmerized by the blinking lights of the servers, dreaming about a day in the future when one system replaces two.  And he wisely decides that this is not a good time to return to the office and explain this inefficient, costly situation to the CEO.  Rather than shouldering the blame for the result of 40 years of hotel technology, and without a solution ready to replace it, he bides his time and envisions the future.  He starts planning now because that enterprise, integrated, centralized solution is not far off, and the ROI on that project will be magnificent.

David Sjolander is an executive in transition and can be reached at dsjolander@gmail.com.

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