Software Needs Cycle: Must-Have Functionality for Hotel Management

by:
on March 29, 2017

Launching a new hotel is a challenging yet rewarding endeavor. And, once you’re up and running, scaling and optimizing your business can be just as difficult.

But hoteliers don’t have to face these hurdles alone. Hotel management software can help you meet these goals.

We looked at Software Advice data from real buyers and users to determine the top-requested applications based on the hotel’s level of sophistication. Here, we’ll reveal what software applications you need when you start, when you need to grow and later to optimize your hospitality business.

Needs Cycle for Independent Hotels [GRAPHIC]

independent hotel needs cycle
Software Advice has a team of software experts that provide free telephone consultations to hotel owners and managers searching for software. We studied a sample of these buyer discussions to gauge demand for hotel software functions by level of sophistication. (Learn more about these buyer discussions here.)

Hotel Applications to Start With

This section is for independent hotels that are just launching and need core functionality to handle daily tasks.

Front Office and Reservation Management

What it does: This is the hub of your hotel operations, where you can check guests in and out, add or edit reservations and availability and review details about each stay.

Why you need it to start: This front office application is the foundation of a successful hotel business, as it gives managers a bird’s eye view of operations in one place. So, it’s a natural starting point.

All hotel data should be accessible in this interface to improve service and management. For example, as guests check in, a front desk employee could see that housekeeping is currently cleaning their room. The clerk could offer the guests a free drink as they wait to preserve a positive first impression.

Key Considerations:

  • Look for front office functionality that enhances guest engagement, such as showing personalized messaging during check-in.
  • Most modern reservation systems offer a tape chart view, or a linear calendar view of each reservation based on the length of stay. Carefully evaluate this feature for user-friendliness; it’s likely to be what your employees will use most often.

Online Booking Engine (OBE)

What it is: The online booking engine gives guests the ability to search for and book rooms and view rates and other amenities directly on your website. This reservation data then populates the calendars on the front desk application and updates availability.

Why you need it to start: Guests aren’t likely to call your front desk to reserve a room anymore. Travelers primarily book rooms online, and mobile bookings are becoming increasingly common.

If you want to run a successful hotel in 2017 and beyond, you must offer online bookings.

OBEs also include several other useful features:

  • Personalized format and logos
  • Support for multiple languages and currencies
  • Up-selling opportunities at time of booking

Key Considerations:

  • Because so many bookings come from mobile devices—27 percent of airline and hotel bookings in the second quarter of 2016 and growing—adopt a stable OBE that’s easy to navigate on a smaller screen.
  • Customizable OBEs allow hoteliers to create special discounts or promotions as travelers land on your website. Offer “Book Now and Save” deals that greet website visitors to boost direct bookings.

Housekeeping Management

What it does: Housekeeping management helps coordinate and assign cleaning duties with communication tools and status management.

Why you need it to start: Positive first impressions in hotels can turn a first-timer into a loyal, long-time repeat guest. Think about how your guests feel as they walk into a poorly cleaned room; with efficient housekeeping management, you can be confident about the cleanliness of your property.

In our latest Hotel Management Buyer Report, we found that 48 percent of hotel software buyers who contact us represent independent hotels, most with around 10 to 49 rooms.

Furthermore, the largest percentage of these hotels (27 percent) say they need software because they’re just launching the business and want to automate tasks from the start.

So when we looked at the most-requested applications of these small-to-medium sized independent hotels, we see a similar ranking as our needs cycle.

 

Most Requested Independent Hotel Applications

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Clearly, hotel professionals just starting out see these top three functions of a hotel management system as the basis for a successful hotel launch—the ability to manage reservations from online travelers and provide a clean, comfortable space to relax are foundational.

Housekeeping management functionality helps manage one of these three critical aspects of hospitality.

Key Considerations:

  • Smaller properties, such as inns or bed-and-breakfasts, may not need to coordinate with more than one cleaner. Many vendors are able to customize housekeeping applications to fit your basic needs.

Hotel Applications to Help You Grow

This section is for established independent hotels looking to increase new and repeat bookings by maximizing visibility and improving the guest experience.

Guest Relationship Management

What it does: Guest relationship management (GRM) is functionally similar to popular customer relationship management applications. Hotels can gather and store information about guests before, during and after their stay.

Contact information, payment details, purchase history, event participation, personal preferences, feedback from past stays, reviews posted to online travel sites, loyalty program balance, redemption data and even images—All of this data can be used to personalize their experience and entice return stays or purchases with targeted marketing.

Why you need it to grow: Independent hotels grow by increasing direct bookings and building a reputation of quality. From there, you can raise room rates accordingly to increase revenue-per-available-room (RevPAR).

A GRM lets hotels delve into customer details to help answer some key questions about important points in their hotel customer journey, showing hoteliers the best ways to delight each guest or traveler segment.

GRM tool
 

A GRM helps you gather data and answer questions about traveler preferences and behaviors

In the guest profiles, you may see that some high-spenders are business travelers who need frequent transportation. Or that a family spent most of their stay last year at a nearby amusement park.

You can improve their experience and your reputation by pre-arranging cab rides for business travelers, or partner with the amusement park to offer a themed welcome basket with goodies for the kids. These little conveniences and delights go a long way to building loyalty and prompting positive online reviews.

Key Considerations:

  • A GRM is essentially a customer relationship management (CRM) system, so if a specific hotel software vendor doesn’t offer this functionality, many stand-alone systems focused on hospitality are able to integrate with your core software.
  • Look for a GRM that includes strong reporting capabilities that can dissect data in various ways to identify trends among travelers.

Central Reservations

What it does: Central reservations generally refers to functionality in a hotel management system that allows hospitality companies to share their room inventory and rates on the Global Distribution System (GDS).

This system ensures information about hotels and flights are consistent and up-to-date as travelers search and book online.

 

How the GDS Connects Consumers to Travel Details
global distribution system

Why you need it to grow: A GDS can help you avoid a lot of confusion or worse: a reservation for a room that isn’t available. Bad reviews over major inconveniences can truly hurt an independent hotel, so consistent rates and inventory is an important part of the guest experience.

You never know where your guests will come from, and wide distribution can put your property in front of people from all over the world.

Key Considerations:

  • This application is often offered as an add-on module, but is becoming increasingly valuable as travelers search dozens of websites before booking. You want your accurate property inventory and rates to be seen as much as possible during this search.
  • The combination of a GRM and central reservations can help hotels hone their distribution and tailor their website and amenities to their most lucrative traveler segments.

Maintenance Management

What it does: Similar to housekeeping, maintenance management helps you keep the physical property in working order to provide a safe, functional space for guests.

Hotel managers or facility managers can schedule daily or monthly routine repairs to prevent burnt-out light bulbs and noisy elevators, or emergency repairs for leaky toilets or contaminated pool water.

Why you need it to grow: Maintenance applications lets you track regular check-ups or reactive repairs on lighting, elevators, molding, toilets, pools and more. Not only should guests enter a clean hotel, but structural disrepair plants the idea that there must be other problems with the property.

The strongest benefit of this functionality is never losing track of maintenance requests.

Key Considerations:

  • Like housekeeping, it’s possible to work with a single maintenance employee or a third-party maintenance team to handle tasks for smaller properties. As such, maintenance is often an add-on application.
  • Some vendors also combine housekeeping and maintenance management, so that managers can assign maintenance tasks through the same interface.

Hotel Applications for Optimization

This section is for established independent hotels seeking to optimize performance with new and diversified revenue streams.

Reporting and Analytics

What it does: Reporting and analytics features allow managers to delve into data about occupancy, guest behavior, accounting, rates and even guest sentiment to spot new trends that should be addressed.

Typically, hotel management systems will offer templates for industry-standard report types, such as financial forecasting for stakeholders and night audit, end-of-day or sales reports. If needed, many vendors can customize report types or allow users to create their own.

Why you need it to optimize: Every hotel collects valuable data, but not all of them use the data in a constructive way. It’s true that even hotels just starting out should use reporting to find trends that they could take advantage of, but established hotels have the volume of data available to gain significant benefit from analytics.

Analytics can offer data-driven proof about which kinds of travelers are most valuable for your property and their travel behaviors to open up opportunities for upselling or marketing.

Key Considerations:

  • Each hotel may need specific reports not available standard in a reporting application, but most vendors will customize features or report types for clients, which may include a fee.
  • Hotel reports contain sensitive information, so use the access control features available in many hotel management system to block unauthorized employee access to data you want to keep private.

Revenue Management

What it does: Revenue management gives hotel managers the tools to accurately gauge their market in order to appropriately set room rates and discounts, so they can remove the guesswork from setting prices.

The software is able to gather rates and inventory from the hotel manager’s property, as well as the data from competing hotels in the same market. Additional factors that can impact rates include special events or festivals, weather, changes in flights or currency values.

The types of data gathered can vary among vendors, but they tend to compare current conditions to historical data to forecast the best time to increase or decrease room rates.

Why you need it to optimize: This technology is one of the most discussed (and argued about) topics in hospitality, generally because the return-on-investment has so much potential.

Like analytics, revenue management is another valuable way hotels can transform lots of data into useful insights about pricing, inventory, marketing or revenue streams. Instead of generating separate reports, a dashboard offers a big-picture view identify revenue areas to improve.

Key Considerations:

  • Revenue management can be complicated, which is why it’s become the newest valuable role in hospitality, as identified in a 2014 report on emerging hotel professions. Software helps greatly, but consider hiring or outsourcing help to fully understand your data.
  • Advanced capabilities available in modern hotel revenue management applications can offer recommendations even for additional revenue departments, such as restaurants, spas or golf clubs.

Restaurant POS or Catering, Spa etc.

What it does: Depending on the characteristics of your property, a restaurant may be a major part of the business. In addition to that, you may offer catering or events, or you might have a spa and other wellness amenities.

Hotel management systems offer capabilities to manage these additional revenue generators:

  • Point-of-sale (POS) system is used to process transactions in a restaurant, spa or the front desk. These typically can handle various types of currency and languages.
  • Catering and events management stores details about vendors, staffing, menus, budgets, invoices, attendees and more.

Why you need it to optimize: We found that food and drink is important to 91 percent of travelers. This a big reason why hotel restaurants are so popular, and they can draw locals as well.

 

Importance of Local Food and Drink for Travelers

local food and drink importance for travelers

If your hotel offers these extra amenities, software will help you run them smoothly. Use software to ensure your spa or restaurant adds value for your guests and bottom line.

Key Considerations:

  • In an integrated system, managers can use POS systems to drive sales by coordinating and presenting specials and limited-time offers on each screen, for both employees and guests.

Next Steps

Hotel management software vendors tend to offer these applications in a suite, but depending on your size or level of sophistication, you may want to add stand-alone applications as your business grows.

If you’re ready to start your software search, we have a few next steps to help you on your way:

  • If you’d like more personal help, call our software advisors at (844) 688-1783 for a free phone consultation to help narrow down hotel systems based on your specific needs.

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