Accelerate Your Hotel Management Software Implementation by Learning From Buyers With Experience

By: Shephalii Kapoor on May 20, 2024
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Optimizing room rates, managing distribution channels, and maximizing revenue while ensuring exceptional guest experience can be overwhelming for hotel managers. A dedicated hotel management tool can save time by assisting hotel owners and managers with day-to-day tasks, such as managing reservations, scheduling housekeeping routines, processing bills, and maintaining guest relationships.

However, to make the right software purchase, knowing the correct set of features, average software price, and common challenges faced while purchasing hotel management software is crucial.

Each year, Software Advice's advisors speak with thousands of software buyers evaluating new hotel management software for their businesses. We've mined those conversations to provide insights that will help small businesses understand the budget requirements, feature needs, and pain points of current users to finalize the best tool for their needs.

Key insights

  • Software buyers prioritize front office and property management functionality during purchase, while current users consider reservations management as the top priority in hotel management software. 

  • Most businesses either rely on third-party software and manual methods for their day-to-day hotel management practices or do not have any system in place at all.

  • Switching to hotel management software is driven by the need for efficiency, functional sufficiency, and new business opportunities.

  • The top five industries investing in hotel management software allocate between $9-$144 per month, with an overall buyer average of $67 per month.

Prospective buyers and current users prioritize different features

To gain insights into user preferences, we analyzed thousands of hotel management software reviews available on Software Advice to identify the features that the users of the software consider most critical for their daily work. Interestingly, our findings revealed a discrepancy between the priorities of hotel management software buyers and users.

  • Fifty-one percent of current software users rate reservations management as the most essential feature in hotel management software as compared to buyers who are majorly looking for front office and property management functionality in a hotel management tool.

  • These findings indicate that businesses already using hotel management software find immense value in reservation management functionality. The feature enables hotel staff to handle all aspects of booking and managing reservations. Users can leverage the feature to make reservations for guests, record guest details, track room availability, and manage room rates and pricing strategies. 

  • Front office and property management, on the other hand, automates tasks related to guest services, billing, and overall property management. The feature enables smooth check-in and check-out processes, allowing front desk professionals to quickly register guests, assign rooms, process payments, and generate invoices. Moreover, it helps hotel managers oversee and manage various aspects of a hotel’s physical assets, operations, and facilities.

Pro tip

Consider a hotel management platform with reporting and data visualization capabilities to analyze occupancy rates, guest demographics, guest satisfaction, revenue, and staff performance.

Current pain points for hotel management software buyers

When our advisors asked buyers what methods they were currently using to handle their day-to-day hotel operations, here's what they found:

  • Thirty-nine percent of buyers use third-party software to automate their day-to-day operation workflows. 

  • While 26% of buyers rely on manual methods, such as spreadsheets and Word documents for their hotel management practices, nearly 25% do not have any system in place.

These discussions shed light on businesses' real-life challenges with their existing methods. These included inefficiency (39%), limited functionality (22%), and new business opportunities (14%).

  • Inefficiency: Conventional methods of hotel management, such as spreadsheets and paper-based record keeping require manual data entry for reservations, finances, guest information, and more. This can be both time-consuming and prone to errors. Similarly, third-party tools alone are not efficient enough to manage the day-to-day operations of a hotel. These tools do not automate recurring tasks, such as room allocation, check-in and check-out, inventory tracking, and guest communication. As the business scales, handling hotel operations can become even more challenging with both manual and third-party tools.

  • Limited feature options: Manual methods of hotel management and third-party tools are not tailored to the unique needs of the hospitality business. They often lack features, such as reservations management, housekeeping coordination, guest management, and front desk operations management that serve specific functions within hotel management. Moreover, these offer limited reporting and analytics capabilities that are not sufficient enough to track key performance metrics related to hotel management operations.

  • Unlocking new business opportunities: Several hotel management businesses switch to a new system from their existing methods to unlock new business opportunities by enhancing efficiency, improving the guest experience, and offering a competitive advantage in the market. Hotel management software is designed to scale with the growth of a hospitality business and accommodate increasing levels of properties, booking volume, and complexity without sacrificing operational efficiency. It allows hotel managers to operate more efficiently and provide better services amid changing market conditions.

Reasons for switching to a dedicated hotel management system

Compared to the existing methods used by professionals, a dedicated hotel management software solution offers the following benefits: 

  • Task automation: It automates several repetitive and time-consuming tasks across different departments within a hotel. Examples of such tasks may include reservation management, guest management, desk operations, and housekeeping management. The task automation feature in hotel management software reduces the need for paperwork and manual intervention, allowing hoteliers to optimize their operations while ensuring consistency and accuracy in hotel operations. 

  • Scalability: A dedicated hotel management system is designed to scale with the growth of the hotel. As the business grows, the software accommodates increased volumes of bookings, guests, and transactions. As compared to other third-party tools, a dedicated hotel management platform is well-equipped to handle the needs of small independent hotels as well as large hotel chains with multiple properties. 

  • Better functionality: As compared to third-party tools, hotel management software integrates multiple functionalities into a single platform, ensuring seamless data flow between different modules, such as reservations, billing, and housekeeping. Moreover, it offers greater customization options, allowing hotel managers to tailor the software to their specific needs and workflows. 

  • Advanced features: A dedicated hotel management solution offers a wide range of advanced features and functionalities to cater to the unique requirements of the hospitality industry. These features may include centralized revenue management, reservation management, guest relationship management, and maintenance management. These help hoteliers operate more efficiently and optimize hotel management processes to maximize revenue.

Pro tip

Select a hotel management software with core guest management features, such as mobile-friendly booking, guest preference management, multi-channel communication, loyalty program integration, and guest feedback management.

Average budget for hotel management software buyers across industries

The budget for purchasing hotel management software varies from industry to industry based on factors such as the hotel size and number of rooms, deployment model, customization level, and the required functionality.

However, the average budget across industries for purchasing hotel management software was approximately $67 per room, per month. 

The chart below highlights the average buyer budget per month for the top five industries interested in hotel management software.

Average budget for hotel management software by industry

Use cases for hotel management software

Based on our advisors’ interactions, these are the top five industries using a hotel management tool for different use cases: 

  • Independent hotels need hotel management solutions to automate operational tasks, manage guest information, and handle special requests, enabling staff to deliver personalized guest experience and enhanced service. Other than basic features in a hotel management solution, such businesses may also need advanced features, such as dynamic pricing, customer relationship management (CRM), multi-property management, and advanced reporting that allows for more accurate predictions and strategic planning.

  • Motels usually often have smaller operations and staff as compared to independent hotels. Therefore, they usually need a tool with a simple interface and features, such as basic reservations management, limited inventory management, and basic reporting that provide essential information on occupancy rates, revenue, and guest experience. 

  • Bed and breakfast establishments often prioritize personalized service and direct bookings. Therefore, they generally look for features, such as room and rate management, online booking integration, and guest communication tools in hotel management software. 

  • Lodges, as compared to independent hotels, have different operational requirements due to their distinct locations and guest expectations. They need a hotel management solution that offers resource management, remote access, and group booking management features that can help them simplify reservation processes, allocate rooms, and coordinate activities for group events. 

  • Campgrounds, similar to lodges, cater to different types of guests and offer distinct experiences. In addition to the basic hotel software features, they may need other features in the tool, such as amenity management, mobile accessibility, and integration with point-of-sale systems to facilitate guest billing.

Looking for more resources?

Click here to check out our hotel management software directory, FrontRunners Report, and Buyers Guide, and compare hundreds of products.


Methodology

Software buyers analysis methodology

Findings are based on data from conversations that Software Advice’s advisor team has daily with software buyers seeking guidance on purchase decisions. The data used to create this report is based on interactions with small-to-midsize businesses seeking hotel management tools. For this report, we analyzed approximately 500+ phone interactions from May 1, 2023, to May 3, 2024.

The findings of this report represent buyers who contacted Software Advice and may not be indicative of the market as a whole. Data points are rounded to the nearest whole number.