Hotel Management Software
BuyerView | 2015
Hundreds of hospitality professionals contact Software Advice each year to find software that meets the needs of their properties. Digging into these interactions provides us with a great deal of insight into industry trends and buyer behaviors.
In this report, we analyze a random sample of buyer interactions from the past year to uncover the factors that drive new hotel management system (HMS) purchases.
In response to increased demand for lodging, bolstered by a growing class of millennial travelers, the U.S. is in the midst of a
Overall travel spending has slowed in the first quarter of 2015, but it’s still rising by 2 percent annually, according to the U.S. Department of Commerce. And U.S. business travel is expected to reach $295.7 billion in 2015—in due to the growth of millennial travelers, who take an average of three more trips each year than older age groups, and are 62 percent more likely to extend business trips into vacations.
This data paints a lucrative picture for hospitality companies—but without adequate software in place, they’ll be ill-prepared to handle the growth. Using a HMS can help:
In this report, we’ll explore these and other benefits by looking at the current methods, common pain points and most requested functionality among a sample of prospective HMS buyers.
When asked what methods they use to manage their hospitality business, the largest percentage of buyers (34 percent) say they already have a hotel management system. Another one-quarter use pen-and-paper methods, and 16 percent say they have no system in place at all.
Travelers today expect a certain degree of personalization when staying in a hotel. Many companies use software to handle daily tasks so they can focus on adding a human touch to guests’ stay. Software can streamline the check-in and check-out process, generate financial reports, manage housekeeping staff and more—freeing the general manager to greet guests and address their needs.
A HMS can also store and organize guest data to help hotel staff provide personal touches. A general manager might notice, for example, that a guest orders a particular wine during their stay. When that guest books another stay in the future—even if it’s at a different location of the same hotel brand—the manager can review the guest’s information and leave a bottle of the wine in their room.
Scott Sussman is the hotel and marketing director at The Peacock Inn; a 16-room independent luxury hotel with a fine dining restaurant in Princeton, New Jersey (part of the Ascend Hotel Collection by Choice Hotels). He says he’s surprised that so many buyers are using manual methods because software offers so much in terms of the “sheer organization” of reservations, guest information and distribution of hotel rates.
“[Software offers] organization not just for today and tomorrow, but for months ahead,” he explains. “It gives you the ability to handle rates and see what’s coming up.”
In this way, a HMS can help hoteliers prepare for the growth that’s expected to continue in the market.
Among those replacing an existing HMS, the top response, at 14 percent, is that it’s missing necessary features and functionality.
Others say their system isn’t user-friendly (13 percent), or note that they would like an integrated system (12 percent)—meaning they want a comprehensive HMS that can perform all necessary functions, instead of using different systems for different tasks.
Of those who cite missing features, one-quarter say they would like a system with an online booking engine. Our demographic information may help explain why an online presence is so important: 34 percent of buyers in our sample are from independent hotels, while those from motels make up the second-largest percentage (16 percent). A combined majority of buyers’ properties also have fewer than 50 rooms. (Charts can be found in the Demographics section below.)
As we’ve noted in past reports, millennials are the travelers hotels want to attract most. According to data from the Pew Research Center, they also make up the largest age group in the U.S. workforce—and many of them have now reached a comfortable position in their careers, with more time and money to travel for both business and pleasure.
Boutique and independent hotels offer the type of authentic experience millennials seek, as opposed to the corporate luxury hotel offerings that dominated the hospitality industry decades ago. In response to this demand, the boutique hotel market is booming: It’s expected to grow by about 6 percent per year through 2019, according to a report by IBISWorld.
So, we can see that independent hotels are aware that having an online presence is important to attract new guests, especially millennials. They must maintain consistent rates across all online travel websites, where millennials are likely to read hotel reviews before booking. An HMS with functionality to add an online booking engine to the hotel’s website can help achieve these goals.
Aditya Sanghi, CEO of Hotelogix (which offers a hotel management system), says an online booking engine is crucial, since, on average, travelers read between six and 12 reviews before making a booking.
“The brand promise and expectation should be carried onto other travel websites, and it’s important for them to have a booking engine to maintain rate parity,” Sanghi says.
Rate parity—meaning a hotel’s rates are consistent across all distribution channels, such as Expedia and Orbitz—is especially important when competing with other hotels in the same area.
Overall, more than three-quarters of buyers in our sample (both those with and without software) are looking for a HMS with online booking capabilities, while 75 percent request reservation management.
Housekeeping management (61 percent) and front desk management (58 percent) rank third and fourth in terms of desired functionality.
Reservation, housekeeping and front desk management are all core applications every hotel needs to access on a daily basis. Hospitality staff must ensure that reservations are entered into the system, that housekeeping staff is organized and on-time and that guests are checked in quickly. Aside from pure organization, these HMS applications offer several additional benefits.
Use Case: For example, below we see the reservation calendar view in Hotelogix. Color codes for reservations can be customized—here, we see checked-out reservations in orange, in-house guests in green, future reservations in blue and rooms that are blocked for maintenance in yellow. This offers a high-level look at reservations for a month ahead, allowing management to make decisions based on occupancy.
Maybe a manager sees that multiple corporate groups will be arriving in a few weeks. This could prompt her to divert some housekeeping staff to clean and prepare an additional conference room. Alternatively, she might notice that many families with children are staying soon, and add more kid-friendly options to the breakfast menu.
A color-coded reservation calendar in Hotelogix
Managers can use housekeeping management functionality to keep track of which rooms are clean and ready for check-in, which are currently being cleaned and which haven’t been attended to. Overall, this helps hotels more efficiently prioritize cleanings, so guests always arrive to a clean room on time. Also, with mobile devices in hand, housekeeping staff can update a room’s status immediately after cleaning, adding to the real-time data in the system.
Below, we see a Hotelogix screen showing the status and availability of rooms and which worker is assigned. This allows managers to make informed decisions so that guest satisfaction isn’t impacted by a dirty room.
Room status view in Hotelogix
Finally, online booking engines give potential guests the ability to book a room from a hotel’s website, which feeds the reservation data directly into the HMS. As an added bonus, online bookings made directly through a hotel’s website allows the hotel to avoid the 15 to 25 percent commission it must typically pay online travel agencies for each booking.
Sussman reiterates how important online booking is in today’s hospitality industry.
“No one wants to call anymore,” he says. “People want to do things online, without talking to anybody—so having that option available is huge.”
The data provided by the HMS buyers in our sample confirms overall trends in hospitality today: Independent hotels are popping up to attract the millennial crowd, and they want to aggressively market themselves online.
Buyers should make sure the software they purchase can help them stay on top of daily responsibilities, such as managing check-ins, room cleanings and reservations, while also offering crucial online booking engine functionality.
With daily tasks streamlined by software, hotel managers can spend more time on increased personalization, which requires careful attention to individual guest behavior and habits. Travelers today expect a seamless experience—one that hotel management software can help provide.
As we mentioned above, the demographic breakdown of the sample shows that 34 percent of buyers are from independent hotels, followed by 16 percent from motels and 14 percent from inns.
Our advisors regularly speak with buyers who contact Software Advice seeking new hotel management software. The data used to create this report was collected by our advisors during those interactions for business purposes rather than for market research. We randomly selected 385 interactions from the U.S. during April 2014 and June 2015 to analyze for this report.
These findings exclusively represent those buyers who contacted Software Advice for guidance on software selection, and may not be indicative of the market as a whole. Expert commentary solely represents the views of the individual. Chart values are rounded to the nearest whole number.
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