Importance of Hotel Software for Small & Mid-Size Hotels

The importance of Hotel Management Software or Property Management Systems for hotels cannot be stressed enough anymore. It is one of the most important factors which contribute significantly to the long-term success of a hotel.

In recent years, there has been a rise in budget travellers around the world which has led to a rise in a number of small to mid-size hotels in the industry. This has drastically changed the landscape of the Hospitality industry in general and directly affected the Hospitality IT industry.

Hotel Management Software (HMS) BuyerView 2014, a survey conducted by HMS research firm Software Advice, surveyed 385 randomly selected buyers in 2013. The survey was conducted to discover what exactly buyers expect or want when choosing software for their property.

According to the report, 54% of hotel management software purchasers in the industry are independent small to mid-size hotels. The report also states that the majority of the buyers are adapting to the latest software in order to leave behind the manual management of their property and buyers are specifically looking for software which offers reservation and online booking facilities.

Majority of Purchaser are small to Mid-size Hotels

A majority of the owners or managers, who are looking for a software solution represent (57%) properties which have 10 to 50 rooms. A combined 11 per cent of buyers are from very small properties such as B&Bs, Inns, chain hotels, or large hotels with 500-plus rooms.

Generally, small to mid-sized hotels are more likely to purchase a hotel software. — Graphical representation of the size of properties looking for hotel software.

Independent Hotels, Resorts and Inns are the Primary Customer

When consulted with various managers and owners of different property types, the report found that around 1 per cent are looking for software for a large hotel or a chain hotel. This is not surprising as the big brands usually have to go for in-house or corporate-mandated software. The rise of independent properties is very evident from the fact that the majority of the buyers (54 per cent combined) comprised independent hotels, inns, and resorts.

As travellers are also opting more for independent hotels, inns and resorts, the properties have to adapt to new technology and advancements to keep up with the growing demand.

Majority of the buyers want to upgrade to a better system

When questioned about what method they currently use to manage their properties, 34 per cent of respondents are already using a property management system. The next 28 per cent used manual methods consisting of spreadsheets or paper, on the other hand, 15 per cent had no method in place.

Most of the hotels prefer a dedicated software for their hotel management. — Graphical representation of various methods used by hotels to manage their operations.

The “Other” categories (10 per cent) use independent booking systems or have stopped using a property management system. 7 per cent of buyers use management software with reservation facilities to meet their requirements, and the last 4 per cent use software built specifically for them.

Buyers want feature-rich and faster software

The report also highlights the diverse set of reasons that buyers have provided. Approximately 18 per cent are looking for speed and efficiency in software which is also compatible with the latest hardware in the market. 16 per cent of respondents said they go for a new product because the current one being used lacks the necessary features, such as internet bookings and channel management, other 15 per cent want to improve efficiency.

The rise of Global Distribution System (GDS) channels over the last few years is no surprise as online bookings have become a standard norm in the industry today and since 2011 bookings from GDS have grown by 14 per cent. It is a surprise to no one that one of the most frequently requested features is the feature to connect to the (GDS) system with the ability to manage real-time rates and inventory.

Among others looking for an upgrade towards new software is the bad experience with support service (15 per cent), lack of satisfaction with the user interface or GUI for other 9 per cent and unsound technical software for 7 per cent of the respondents and the remaining 6 per cent are looking for a solution which requires minimum investment.

First-timers expect higher efficiency

The prime reason of replacing manual methods of hotel management is to improve efficiency. — Graphical representation of the major reasons that hotels have to replace the manual methods.

72 per cent of first-time buyers of hotel software make it clear that they want to achieve higher efficiency in their day-to-day operations and get away from the traditional methods. Property Management System can automate daily operations and bring a higher level of efficiency.

Majority of Buyers Need Reservation and Guest Management

28 per cent of total respondents, the highest in this survey said they would like the ability to enter and edit reservations, which is a central function of a property management system. The next 22 percent of buyers want an online booking capability giving them a competitive advantage, which does not surprise as 65% of hotel bookings now are made online.

A better reservation management is what most of the hotels look for. — Graphical representations of most required features of hotel software.

Approximately 11 percent would use guest management features which will help them maintain information about their guests to understand them better and provide better service in the future.

Housekeeping management was important for 9 per cent of respondents and another 9 per cent expected advanced accounting and reporting features. Lastly, 6 per cent of hoteliers want a distribution management and marketing functions part of their hotel management software.

Implementation in less than three months

85% of the hotel properties expect to implement a new hotel software in less than 3 months. — Graphical representation of the minimum duration in which hotels want to get the software to be implemented.

A staggering 85 of buyers expect the new hotel software to be implemented in less than 3 months; given the nature of the industry and how fast things are evolving it comes as no surprise. 14 per cent want the system to be implemented in three to six months, and remaining 2 per cent in 6 to 12 months ahead of time.

Conclusion

Analysis by the Software Advice Team, reflected in the report clearly shows the diversity and rapid expansion of independent hotels and how they are demanding higher-performing systems with the latest features. As the competition is heating up across the industry, first-time buyers or buyers who are upgrading are looking for a solid property management system with specific features, real-time reservation, online bookings, channel management and guest management as it is the key to constant growth and stay ahead of the competition.