Is the Future of Hotel Property Management Systems in the Cloud?
The internal server has been a standard fixture of hotels for a few decades now. It represented a huge leap forward in terms of organisational efficiency. Suddenly, there was complicated software that could help you manage and track all your departments via a central point. This was a gold mine for software developers — and for computer repair pros who fixed countless IT problems in hotels across the world.
The majority of hotels continue to operate internal servers today. Why? Convenience, security and economy are the main reasons. In many cases, these systems continue to perform reliably and the case for adopting a new way of doing things is simply not compelling enough..
Eventually though, the case for the cloud-based PMS will become overwhelming. As the benefits of cloud-based property management systems multiply — and as more properties move away from in-house solutions —developers will phase out traditional offerings and stop issuing updates. This is already happening throughout the software world, not just hotel property management systems. What was once a license to install and use software on your own server is now a cloud-based subscription service.
But it's one thing to push your music or photo collection to the cloud. Hoteliers need a very strong case indeed before they entrust vital functions and data to faraway servers. What are the issues to consider for the cloud-based PMS?
Security concerns
The world has seen more large-scale hacking incidents in recent years. Major corporations have been hacked, exposing the personal information of millions and creating a series of legal/PR nightmares.
Cloud-based systems are a migration of many little servers (the traditional way of storing data) toward fewer, bigger servers. Doesn't this make your data less secure? Aren't big professional servers in faraway places more likely to be targeted by hackers?
Not necessarily. Cloud-based property management systems know that a major security breach would be fatal to their business, so they have to invest constantly in security upgrades. Overall, their servers are better equipped to protect against viruses and security breaches. As hackers become more sophisticated, so must the measures designed to stop them. Boutiques might argue that keeping information in-house makes their guests less of a target — but given all the other benefits of cloud computing, it's difficult to argue that in-house software is a better solution.
Note: A process called tokenization, wherein sensitive data (e.g. credit card details) is replaced by symbols for its journey through cyberspace, is a vital security feature for any cloud-based PMS.
Maintenance/updates
A true cloud-based PMS isn't located anywhere on your property. None of the data you collect and store will ever exist on the premises — except when you call it up using a PC or mobile device. Maintenance and updates occur automatically in the cloud. As a hotel manager, your only concern is your account credentials and the end-user interface.
Which means, of course, that stable Internet is a must for any cloud-based PMS. If your connection goes, so will your ability to use the PMS. Investing in a PMS before you invest in rock solid data infrastructure is therefore not the best decision.
Other concerns
The cloud-based PMS can perform any function your in-house PMS can — bookings, point of sale, telephone, accounts receivable, F&B management, HR, payroll, and so on. If anything, there's net-increase in functionality since the system is constantly improving with a view toward winning more clients like you. Plus, you have all the convenience of the cloud.
Be wary, however, of any cloud-based PMS designed mainly for desktop use. The increase in mobile interactions continues to impact our industry, and many hotels are choosing to bring reception out from behind the desk. Managers also need to able to monitor and adjust situations immediately, whether they're on the premises or not. In order to be effective in these ways, the cloud-based PMS needs a sophisticated mobile interface that won't compromise functionality.
It's also worth mentioning that not every "cloud-based PMS" you come across is "truly" cloud-based. Some of these offerings are user-installed software that lives on your server and updates to the cloud frequently. This leaves you will most of the same problems if something breaks down, and deprives you of real-time monitoring.
Other issues
At the moment, your choices are still on a server, or in the cloud. But there may be even more developments in this area, especially with the emergence of blockchain technology. There are already developers such as Winding Tree looking to revolutionise the travel industry so it makes sense that this new technology will eventually make it's way into a hotel management system as well. According to Duetto, companies such as the TUI Group have already developed their own in-house private blockchain to manage a variety of transactions so it would seem inevitable that the larger hotel management area would be under review.
Conclusions
I suspect the current cloud systems will be around for a while, and RMS Hotel, CiiRUS, and Hotelogix are a few of the names you should investigate if you're interested in moving to a cloud-based PMS. The functionality is already impressive, and ever-evolving. Depending on the size and scope of your property — and depending on what kind of results you get from your existing PMS — 2018 may not be the year to move into the cloud. But the writing appears to be on the wall (or in the sky). As more capital and more trust moves into cloud-based PMS services, the case will only grow stronger. And if blockchain technology takes off, expect this to be even stronger still.
Dean Minett
Director - Minett Consulting
Minett Consulting
