Why Do You Need Your Own Hotel Management Software
Our CEO Olexiy Nagatkin has recently been on a long business trip to Europe, visiting some of our partners to discuss important cooperation-related matters. Using this opportunity, DIGIS Blog Editorial Team advised him to ask managers at the hotels of his stay a question about what hotel management software they use, what features they lack in their solutions and so on.
We are quite lucky as Olexiy’s trip lasted almost a month, so he had a chance to talk to a substantial number of managers at the hotels where he stayed overnight.
We have processed the received information and will insert interesting findings in our post below. The idea of the post is to familiarize our readers with hotel management system development process, tell them what they need to develop a custom hotel management system, what types of hotel management systems software are available at the market, and, generally, explain to them why they must build a hotel property management system of their own if they want their hospitality business be successful..
So, get yourselves comfortable in the chair and start reading.
What is Hotel Management Software?
Hotel Management Software or, shortly, HMS, is a system that helps hospitality companies handle their usual tasks such as reservations, guest check-ins and check-outs, hotel staff management, payments etc.
Since hotel business operations anticipate a great deal of repetitive tasks, HMS solutions offer enhanced automation capabilities, to minimize manual work and thus mitigate delay and mistake risks.
On our opinion, operations automation is the most important purpose of a hotel property management system, as without such system hotel staff would spend tons of time to fulfill the same tasks.
Hotels also need a reliable tool set to see how their staff perform, manage and maintain their property, handle incoming and outgoing payments, manage sales channels, communicate with the tax and controlling authorities etc.
So, it would be correct to identify hotel management system as a merge of a Customer Relationship Management System (CRM) and a Hotel Enterprise Resource Planning System (ERP).
There are currently multiple ready-made hotel management systems available in the market, each of which packs a great set of functions and features, which, however, may not be enough to satisfy your business specific needs.
Hotel Management Software Features
Anyone can do a Google search and find out which features are can be implemented in hotel management systems. However, it is always good to get a firsthand opinion from a primary source, i.e. from a hotel manager. Luckily, we have such at hands thanks to the poll our CEO has performed among hotel managers during his European trip.
This feature is one of the most critical capabilities of any hotel management system as all guests start their relations with hotels from room booking. Booking management module ensures all customers get rooms they have booked and helps the hotel staff track all reservation-specific details which include dates of guests check-in and check-out, guests number, preferred room type, and so on. The Booking module can have various tools to visualize room types and their occupancy.
Many hotels today sell their rooms using various platforms, for example booking.com, hotels.com, hrs.com etc. Channel management module’s main purpose is to sync bookings made via different channels. It is very important to have a good channel manager as it helps hotel staff avoid overbooking, mistaken purchases, check-in/out problems etc. This module must also have superb property listing creation and editing instruments to quickly update the hotel offerings and provide potential guests with reliable and precise information about the hotel and rooms.
This feature is regarded as the heart of any hotel management system as it deals with the most valuable asset of a hotel – with the guests. It stores all the information about guests, including their birthday dates, home addresses and contacts, previous hotel history, preferred payment options etc. The module also helps hotel staff distribute various notifications and messages to their guests with the full support of attachments – invoices, greeting cards, promos etc.
Property and Staff Management
Guests and reservations are important for a hotel, but it is also very important to ensure that the hotel property (building(s), equipment, etc.) are in good order as well. Another essential requirement is to ensure proper management of all staff-specific issues. A well-thought and well-implemented HMS houses a Property and Staff Management tools that help control the condition of the hotel property, remind about its maintenance, remind about upcoming electricity, water and other utility payments and so on. These tools also help automate routine staff operations and keep track of their performance, attendance, and other work-related matters such as shift distribution, days off and leaves etc.
Analytics and Reporting
No business is possible without analytics and reports. It is an absolute must for all hospitality businesses, regardless of their size, to have reliable instruments to track the business-wide performance and finances. The Analytics and Reporting module helps see a hotel’s income and expenses, build graphs and charts showing peak load and idle times, see analyses on the hotel’s guests and so on.
Reporting portion of the feature allows creating custom reports and export them to any external application for further needs. Reports may cover room sales, annual revenues, guests breakdown by categories etc.
Most sophisticated versions of the hotel management systems house AI-enabled Analytics and Reporting modules. Artificial Intelligence, combined with Machine Learning, helps build more accurate forecasts on the hotel performance, minimize error rates, and, generally, cut costs on business analysts and advisers.
Mobility and Cloud
Efficient management requires access to the business management tools at all times and from any place. This is why mobility and cloud support for a high-quality hotel management system is a needed feature. Hotel staff and managers get access to all hotel operation aspects from their mobile phones or tablets, while cloud support eliminates the risk of sensitive data loss – the data is stored not on servers in a hotel’s basement but on secure and password-protected cloud databases, so electricity failures or sudden hardware breakdowns will not affect the data integrity and will prevent huge expenses on data recovery.
Major Steps to Consider for Custom Hotel Management System Development
Now let’s talk a bit about how to create a hotel management software.
Actually, the development of such system anticipates a standard software creation cycle with the standard development phases: Planning, Development, Testing, Deployment.
Before starting to create a hotel management system you need to set up your development team. Depending on the scale of your future system, the team may consist of a business analyst to advise on hotel business processes and their translation in the software, project manager to manage all project-specific issues, designer to create all interfaces, screens, pages, icons, buttons etc., and, finally, developers, both the front-end and the back-end ones.
So, you have elaborated the concept, validated the idea, set up the development team and are fully ready to start building your hotel management solution. During the whole project, you need to pay close attention to the following aspects.
Nobody likes too sophisticated applications, that’s for sure. Ask your designers to create flat and simple interface that would look logical and not steal the hotel staff time.Make sure it is in line with the best design standards and style guides.
The system must support easy and simple scaling if needed. Your business may grow bigger so you would need to quickly scale the software up not to lose the momentum. It won’t be possible if your system is too rigid and provides insufficient flexibility. We recommend to opt for a modular design that will allow you to modify the system in a fast and cheap manner.
Third Party Integrations
As mentioned above, good hotel management systems have tools to manage multiple sales channels. You need to implement secure integrations with all channels where your hotel offers its services – Booking, TripAdvisor, Airbnb, etc. The links must be secure and redundant to avoid business interruptions.
Permanent Access to the Tech Support Team
No matter what size your hotel and, respectively, hotel management system, is, it can fail at some point. If its operation is not recovered in a prompt manner, you may lose clients, money, and, what is even more important, spoil your business reputation. To avoid these scary things, we recommend to think about contracting a dedicated technical support team to ensure uninterrupted maintenance of your HMS. The best option is to assign this task to a software development company you have outsourced your system development to.
If you consider all the above suggestions when planning your system development project and translate them into technical or business tasks with appropriate controllable metrics, you will most likely get a very good system for your business.
How Much Does It Cost to Build Your Own Hotel Management System
This question has billions of answers, in fact. You can choose any figure and use it as a cost, well. But the most correct answer will be “it depends”. Indeed, the final price will depend on the features the system needs to have. The more features you want, the more you need to be ready to pay. The price will also be affected by your choice of the system development contractor: if you outsource the development to Western European or North American software development teams, you may expect that one hour of their work will cost not less than USD 75-100. Indian or Chinese developers charge USD 10-20 per hour, in the meantime. So the system will cost you much cheaper. However, we would recommend you not to swing from one extreme to another. If we needed to choose, we would pick up a company or agency that has its research and development office in Ukraine. Their developers will bill you USD 30 per hour on average, and we think this price is very reasonable.
Rough estimation we have performed to find out the price limits says that approximate duration of the project development will be 5-6 months, and the system development will cost you from as low as USD 20,000 to as high as USD 350,000.
The hospitality business nowadays is on the rise as more and more people can afford traveling to various locations in the world. They go to tourist places, take sightseeing tours, meet new cultures, make new friends, and, well, they need accommodations in such places, i.e. hotels. The hotels, in their turn, to cope with the fast pace of the extremely dynamic competition, need certain solutions to boost their performance while cutting their costs. They need tools to automate routine tasks, improve their and their guests personalization, and, generally, reach new levels of the customer relationship management quality. All this can be facilitated by employing a well-designed and masterfully built hotel management software system.
Having spent a relatively small pack of bucks to develop such system, you will get a bunch of controls that would ease your life and the life of your hotel staff.
Of course, you may ask “Why do I need to build a custom system instead of buying a ready-made one? There are so many good products available over-the-shelf.” The answer is that COTS systems won’t be able to offer you YOUR LEVEL OF FLEXIBILITY. They may have expensive features you don’t need and miss some cheap ones critical to your particular needs. They may be too difficult in use, have old-fashioned design, have no integrations with your other internal and third-party software components.
Actually, the figure below shows the breakdown of answers received by Olexiy from hotel managers he met during his trip.
As we can see, almost a third of respondents think that ready-made systems don’t have that level of automation they need. 20% more respondents lack important features in the COTS hotel management systems, and other 20% think such systems are already old.
At the same time, building a custom, fully personalized, software system adapted to meet exactly your hotel needs will pay back in a short-term run and will let you free expensive resources for truly important business goals. With a custom-made hotel management system you will be able to control all aspects of your hotel life, protect sensitive information, and make your customers happy and satisfied with the level of your service. Happy clients will bring other clients, and the chain will only become longer.
In case you doubt which features your hotel needs to have in its management system, DIGIS would be happy to help you analyze your business needs and elaborate a detailed list of functional specifications. You can get a free personalized consultation on all development aspects by simply reaching out to us.