Many hoteliers are reluctant to invest in mobile SaaS-based technology. Superficially, this approach seems logical: Hoteliers face increasing competition and labor costs, and many do not see the benefit of taking on another monthly SaaS-based fee.

After all, “if it ain’t broke, don’t fix it”... Right?

Not really. When trying to figure out the ROI for core technology, savvy hoteliers should look beyond the baseline monthly fee and try to develop a more holistic picture of how that technology fits within their business’s cost structure, goals, and revenue opportunities. This article will try to paint such a picture by looking at how a native-cloud PMS can affect a hotel’s maintenance and ownership costs, operational costs, revenue, and scalability.

There is More to Ownership Costs Than Just a Monthly Fee

Many legacy on-site PMS providers argue that once you pay for the system, you don’t have to worry about recurring monthly fees 一 but the devil is in the details. Many companies spend approximately 75% of their IT budgets on maintaining existing tech infrastructure, and 53% of hoteliers listed outdated technology and inflexible integration systems as major tech pain points.

Implementing and maintaining on-site legacy systems can be expensive and demanding: On-site servers require higher energy bills to run and keep cool and often require regular maintenance and “premium” software updates to remain current and operational. Legacy PMS providers often require their clients to purchase “proprietary” integrations to expand their tech stack, forcing them into an expensive “walled garden” that artificially limits their system’s flexibility.

Because SaaS-based PMS systems do not require the end user to set up expensive on-site servers, they can eliminate these hidden costs. SaaS-based platforms require no on-premise hardware, no on-site manual assistance, or on-site server security. They require no additional energy costs, no scheduled system downtime, and offer regular automatic software updates for free. Some native-cloud PMS systems also run on a webhook-enhanced open-API architecture, meaning they can seamlessly integrate with almost any third-party platform without additional integration costs.

Many legacy systems have tried to capitalize on the success of their mobile competitors by offering “cloud-based” versions of their own. But again, the devil is in the details. Legacy “cloud-based” alternatives are still hosted on independent servers that suffer from issues with performance, reliability, and customer service. By contrast, native-cloud based PMS systems are built on secure and eliable architectures like Amazon’s AWS, offering unparalleled speed, performance, 99.966% uptime, and unlimited scalability.

They also offer best-in-class data security with PCI DSS and GDPR compliance, and ISO 27001 and SOC2 Type2 certifications. SaaS-based PMS platforms also offer data-at-rest encryption, HTTPS encryption in transit, as well as VPN and firewall protection. They also conduct regular security monitoring and 3rd party penetration testing, while taking daily database snapshots to protect against physical disasters 一 all with no additional cost to the end user.

A Native-Cloud PMS Can Also Reduce Operational Costs While Empowering Small Teams

The labor shortage in the hotel industry has shown no signs of slowing, and constant employee turnover has had a major impact on the hotel industry’s productivity and bottom line. Every year, the hospitality industry experiences an employee turnover rate of 73.8% (!!), and it can cost up to $3,500 to replace a minimum wage employee when you factor in training, onboarding expenses, and overtime or substitution coverage. For middle- or high-level employees, this number can increase exponentially, reaching up to 400% of a departing high-level employee’s annual salary.

Since the PMS is the primary tool through which hotelier’s manage their hotel and employees interact with guests, it’s crucial to select a PMS that can reduce operational costs and empower employees to be as productive as they can. Cloud PMS platforms that are built and optimized for mobile, offer cleaner and more intuitive interfaces that promote ease-of-use and adoption. Employees can spend less time training or buried in their screens and more time serving their guests. For example, front desk agents can be fully trained on Stayntouch’s PMS in under two days, with most modules taking only 90-min of training to master. This gives hoteliers enormous flexibility in sourcing potential hires since they can focus on candidates who excel at actually serving guests, rather than those who can navigate a clunky and outdated user interface.

A native-cloud PMS can also empower staff to provide better and more organic service to their guests 一 and gain more job satisfaction in the process. Employees who feel empowered to make a meaningful contribution to their company are more likely to be satisfied in their positions and less likely to switch companies. And even a minuscule 2% drop in turnover can save a midsize company hundreds of thousands of dollars per year.

Mobile, cloud-based systems enable staff members to escape the confines of the front desk and meet their guests anywhere in the hotel. Similarly, mobile flexibility allows hoteliers to manage multiple properties on the go, and optimize rates and restrictions from anywhere with an internet connection. Mobile communication and automation can also make staff much more efficient while eliminating a lot of the administrative busywork that can contribute to turnover. A hotel PMS powered by automation can streamline everything from end-of-day reporting, room status updates and allocation, and inventory updates, while mobile or kiosk-based self-check-in can enhance the bandwidth of front-desk staff, and their ability to provide exceptional service.

Mobility Can Turn Your PMS Into a Revenue Generator

When staff members are freed from their screens and from the granite front desk, they are able to deliver the personalized service that drives customer loyalty 一 and revenue. When interacting with a guest, a mobile PMS allows a staff member to easily access a guest’s profile, check them in, suggest upgrades and add-ons, and facilitate custom requests, without having to break their focus on the guest. These natural, fluid interactions are critical to boosting in-person conversions. For example, if a guest wants to know about bike rentals, the associate can quickly check the inventory screen to see what’s available, order the item, and update the guest’s stay card. Or a staff member notices that a particular guest likes a certain type of wine or dessert from their guest profile, and casually mentions it as a potential add-on during their check-in conversation.

A mobile PMS can earn revenue in other ways as well. Mobile check-in, for example, can streamline front-desk operations, but it can also help personalize the guest welcome experience, and earn additional ancillary revenue for hotels. Approximately 60% of guests prefer to check in with a mobile device, creating a powerful touchpoint to send targeted, automated offers for room upgrades, add-ons, loyalty benefits, and monetized early check-in/ late check-out. Mobile upselling gives customers the power to customize their stay literally in the palm of their hand, and in doing so garners significantly high conversion rates. Stayntouch clients report up to an 18% conversion rate for room upsells, and up to a 10% conversion rate for add-ons. The revenue generated from these conversions can often turn a hotel’s PMS from a cost center to a revenue generator. In fact, Stayntouch clients earn up to 240% ROI by leveraging automated mobile upsells and upgrades.

Does Your Technology Promote Your Hotel’s Growth… or Hold it Back?

The most important question a hotelier can ask about a prospective tech platform is whether it is future-proofed to grow along with the hotel's expanding needs and changing market environment, or if it only serves the hotel’s immediate operational requirements. Native-cloud PMS platforms can reduce costs and increase revenue, but they can also deliver multi-dimensional scalability, helping hotels grow and integrate their tech stack, expand into new markets and customer segments, and implement and manage new properties with ease. All of which are far more important to a hotel’s long-term business goals than a simple monthly fee.

About Stayntouch

Stayntouch delivers a cloud-native and guest-centric hotel property management system (PMS) with a comprehensive library of over 1,100 integrations. Stayntouch's cloud-native PMS empowers independent hotels, hotel groups, and management companies to drive revenue, reduce costs, enhance service, and captivate their guests. In 2022, Stayntouch launched Stayntouch 2.0, a fully integrated technology suite featuring its core cloud-native PMS and guest kiosk solution, a comprehensive chain management module, a seamless booking engine (Stayntouch Booking), a robust payment processing platform (Stayntouch Pay), and a powerful channel manager. Stayntouch 2.0 enables hotels to streamline their operations, maximize and diversify their revenue streams, and deliver an even more enhanced guest experience with the innovation and support of one trusted technology partner. Stayntouch is supported by a team of professionals with deep roots in the hospitality industry and is a trusted partner to industry-leading management companies including Sage Hospitality, HEI Hotels & Resorts, and EOS Hospitality, innovative independent brands such as Village Hotels, Pod Hotels, and First Hotels, and iconic flagship properties such as the TWA Hotel, Showboat Hotel Atlantic City, and Zoku Amsterdam. For more information, visit www.stayntouch.com.

Frewoini Golla
Director of Marketing
Stayntouch