Part 5: Don't Get SaaS-y: A Hotelier's Guide to What's Really in Your PMS Licence
So, you're on the hunt for a new Property Management System. You've sat through dazzling demos, witnessed slick user interfaces, and heard promises of operational nirvana. And you're nearly ready to sign on the dotted line…
But hold your horses. Before you commit to a long-term digital partnership, let's have a little chat about the fine print—the crucial details that determine whether your new PMS is a dream come true or a recurring financial nightmare.
I'm not saying that anyone is trying to pull a fast one. The world of SaaS may be a glorious, sprawling marketplace of innovation, but it’s also a landscape where different companies have vastly different ideas about what ‘all-inclusive’ really means. What one vendor considers a standard feature, another deems a premium, extra-special, sold-separately add-on. It's less about deliberate deception and more about a fundamental lack of standardisation.
Think of it like buying a car. One model comes with satellite navigation and heated seats as standard. For another, they’re optional extras you only discover are missing on the first frosty morning you can’t find your way to the airport. The key is to pop the bonnet and kick the tyres before you drive it off the forecourt.
The Grand Tour: What Did They Really Show You?
That demo was spectacular, wasn't it? A seamless flow from booking to check-out, with automated upselling, dynamic pricing, and housekeeping reports that practically fold the towels themselves. But here’s the million-dollar question (sometimes literally): was that the proposed licence package or the full-fat, bells-and-whistles, VIP version?
So, it’s time to channel your inner investigative journalist.
- Rule Number One: Assume Nothing. Ask for a specific, itemised list of every module and function included in your proposed licence fee.
- Flip the Script: Don't just ask what's included. Explicitly ask, "What is not included?" Are there modules for rate management, conference room booking, or advanced reporting that were showcased but will actually cost extra? This simple question can be incredibly revealing.
The Connection Conundrum: Are All Your Interfaces Included?
A modern hotel PMS is the central nervous system of your operation, a hub connecting to dozens of other critical systems: channel managers, payment gateways, point-of-sale systems, key card locks, and guest apps. These connections, or interfaces, are what make the magic happen. But they can also be a potential minefield of hidden costs.Think of it this way:
- How many are free? Does your licence include all or only a set number of active interfaces? If so, how many?
- What about the future? What happens if you want to switch the payment provider or add a new online travel agent? Is there a fee for swapping out an interface?
- Don't forget the labour. Does the licence fee also cover the technical service required to implement a new connection, or will you get a separate invoice for a technician's time? Again, what is explicitly not included in the setup of these interfaces?
The Tying of Knots: Mandatory Marriages
Some PMS providers have their own, in-house solutions for things like Point of Sale, housekeeping, or booking engines. These can be excellent, seamlessly integrated tools, but even so, you may want to replace them, now or later, with other solutions of your choosing—is that possible? You need to know if you're choosing a PMS or a whole new, unchangeable ecosystem.
The Crystal Ball: Future-Proofing Your Licence
Your hotel is not a static entity. You might expand, add new services, or change your operational model. How flexible is your PMS licence?
- The Upgrade Path: If you start with a "basic" licence, what is the process and cost to upgrade to a more feature-rich version later?
- The Long Game: Does the initial licence tier you choose lock you into a certain price structure for future additions, or can you mix and match?
- Understand the long-term implications of your starting point.
The Renewal Riddle: What Happens When the Honeymoon is Over?
That initial contract price looks fine. But what happens in year two, three, or five? A low introductory offer can quickly lose its lustre if it's followed by steep, unpredictable price hikes.
- Ask for a 3-5 year cost projection. Reputable vendors should be able to provide this.
- Understand the "how." How are future costs calculated? Is there a fixed annual percentage increase (e.g., tied to inflation), or is it re-evaluated based on market rates? Unpredictable renewals can wreak havoc on your long-term budgeting.
Comparing Apples, Oranges, and the Total Cost of Ownership
You'll encounter various pricing models on your quest: per room, per user, a percentage of revenue. Trying to compare them directly is like trying to nail jelly to a wall. A low "per room" fee might look attractive, but what if it comes with hefty transactional costs or charges for every single integration?
The only way to get a true comparison is to insist on a Total Cost of Ownership (TCO) projection over a set period, say, three years.
Don't be vague. Give every shortlisted vendor the exact same set of assumptions. For example:
"Please provide a three-year Total Cost of Ownership calculation for your PMS based on the following: A 150-room hotel with an average occupancy of 70%. The average room rate is €200 per night. 90% of our revenue is processed via credit card. We require interfaces for [list your specific channel manager, POS, key lock system, etc.]. Please detail all one-time setup fees, training, recurring monthly/annual fees, and any transactional charges. Crucially, if your model is based on turnover, please clarify if this is calculated including or excluding VAT."
And once you have their TCO, ask the most important follow-up question: "What costs are NOT included in this calculation?" This could be anything from after-hours support to data migration fees if you ever decide to leave.
It's Not About Being Cheap, It's About Being Smart
The goal here isn't to find the absolute cheapest system. The cheapest option today can often become the most expensive headache tomorrow. This exercise is about gaining clarity and control. It’s about understanding the true value of what you're buying so you can make an informed decision.
You might find that the vendor who initially appeared more expensive actually includes far more for a secure, predictable future, making them the better long-term partner. You're not just buying software; you're investing in the backbone of your business.
A Final Word with a Friend
When you speak to reference customers—and you absolutely should—go beyond asking if they "like the system." Ask them specifically about the money:
"Is the licence and overall cost what you expected it to be when you signed the contract? Have there been any surprising invoices?" Their real-world experience is the final, and perhaps most valuable, piece of your puzzle.
Choosing a PMS is a significant commitment. By asking these tough, specific questions, you’re not being difficult; you’re being a savvy business owner. You’re ensuring that when the ink is dry, the only surprise you get is how much smoother your hotel runs!
To Conclude
In these five articles, we've looked at the various pitfalls one can encounter when choosing a new PMS. There's no getting around the fact that this is one of the biggest, most difficult, and most important business decisions a hotel makes. It's a choice of a technical platform you hope to stick with for 5-10 years.
To conclude, I would like to advise that in this case, as in so many others, it's all about finding a supplier, a business partner, whom you trust and who you believe will care about you and solve your problems long after the ink has dried.
There are PMSs from many different companies, but with the advice we've covered, you should be able to form your own opinion about what suits YOU and not have to rely on loud marketing.
Yours truly,
Kim
