Cloud Or On-Premises Hotel PMS: What Works Well For Hotels

Cloud Or On-Premises Hotel PMS: What Works Well For Hotels

Aditya Sanghi
Aditya Sanghi

The Hotel Property Management System came into existence in the 1970s. From then till the 2010s, those on-premises solutions, with little functionalities and limitations, helped hotels manage the front and back-office operations. From 1970 to 2010, in those 40 years, it only evolved a little and couldn’t cater to the hotels’ changing requirements. For example, it couldn’t help them sell more rooms online. Then from 2010 onwards, we saw things changing with cloud computing. Yes, we are talking about the emergence of cloud-based Hotel PMS that has altered how hotels adopt technology to manage end-to-end operations. Today, we will drive our point home – the cloud is the ultimate tool for a hotel’s overall success.

Saves costs

For hotels, the on-premises version involves a huge long-term licence fee upfront. But a cloud PMS comes only with a subscription fee. Hotels can cancel their subscription for a specific period. For example, a hotel has 50 rooms and plans to renovate 10 of them, which will take one month. It means the hotel will only have to pay for the 40 rooms for that month.

An on-premise PMS also makes a hotel spend extra on cyber security protocols to prevent the loss of operational and guest data. However, in the case of a cloud PMS, the cloud-hosting protects data, accounts and workloads from unauthorised access via top-notch encryption.

Plus, thanks to the power of the cloud, it doesn’t involve any costly annual maintenance costs (AMC) that hotels need to pay for on-premises applications. Additionally, on-premises PMS requires hotels to invest in local servers, hardware, IT teams, etc. But with a cloud PMS, they don’t need costly servers and hardware, thus eliminating the need for an IT team.

Offers faster time-to-market and free upgrades

Implementation of an on-premises PMS becomes time-consuming due to the need for server installations. For example, it may take 15 -20 days to implement it at a 50-room property. It hinders a hotel’s ability to go live and start selling as soon as possible. The vendor also has to deal with a lengthy development cycle when adding new product features. It restricts a hotel’s ability to make the most of its IT investment. And then hotels have to pay for those upgrades.

But with higher scalability and elasticity, a cloud PMS can be installed at a 50-room property in about 48 hours, accelerating a hotel’s time-to-market process. The vendor has the required computing flexibility to build and release product upgrades frequently. Moreover, those upgrades are for free, ensuring more cost savings.

Improves staff performance

On-premises Hotel PMS sits on a local server at a property. Thus, the staff must be at the hotel to access it. That’s why, with too much stress on flexibility, agility, and ease of managing operations in today’s era of mobility, those PMSs are no longer desirable options.

Contrary to this, users can access a cloud PMS on the go via their mobile devices on the web and can execute daily operations while keeping an eye on the hotel’s position. It exponentially increases their overall performance and productivity.

Helps in selling more

Hotels need to sell more online as more travellers are making reservations via OTAs or a hotel’s website. But they are unlikely to see more online bookings with an on-premises PMS as it does not integrate with a channel manager on the cloud, which also plays the most critical role in automatically updating rates and inventories on OTAs. Not only this, but it has similar constraints with the web booking engine on the hotel brand’s website, compromising the direct bookings that can be generated.

But a cloud Hotel PMS addresses all these concerns efficiently. It seamlessly integrates with a cloud-based channel manager and web booking engine and helps hotels drive incremental OTA and direct bookings. A hotel’s sales team can access the inventory and rates in real-time and can sell on the go. With separate consoles for travel agents and corporate clients, a hotel can get more reservations via those two critical booking sources. Moreover, the revenue management solution integration automatically changes room rates based on competition, local demand, etc., and allows for selling at the best rates.

Aids in efficient marketing

Today’s intelligent Customer Relationship Management (CRM) solutions are on the cloud, and it is challenging for hotels to leverage the power of this tool along with an on-premise Hotel PMS.

Here too, a cloud PMS comes as a saviour. Thanks to its seamless two-way integration with a CRM solution and tons of guest data flowing between these two systems, hotels can efficiently segment their guest profile, past preferences and purchases. It helps them develop targeted messaging and marketing campaigns at the right time and frequency for better conversion.

Boosts guest experience

Think of contactless services that guests want the most from a hotel. With an on-premises solution, offering those contactless services and enabling guests to do everything at a hotel via their smartphones is impossible.

By virtue of cloud architecture and the associated mobility that comes with a cloud PMS, hotels can easily roll out several contactless services to their guests. From check-in to check-out and everything in between, they can allow guests to do everything via mobile phones.

Cloud has been powering the hotel industry’s growth for over a decade, emerging as an enabler. It has undoubtedly changed how hotels today look at IT as part of their corporate growth strategy. It enables them to gain a competitive advantage while dealing with changing business dynamics and guests’ needs. The cloud is the ultimate tool to drive overall growth via enhanced efficiency, revenues, and guest satisfaction.

This article was published in Hotelier India.