Why Switching to a Cloud-Based PMS Could be a Good Idea

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Why Switching to a Cloud-Based PMS Could be a Good Idea

By Nikhil John, marketing evangelist, Hotelogix - 08/08/2019

Imagine waking up from a year-long coma in the 21st century. Chances are that the world would seem like a different place. With the pace at which modern-day technology updates itself, it's no surprise that anyone could be caught off guard. It’s been short of a decade that the Hospitality industry woke up to the existence of cloud systems and the industry’s response to it has been like waking up from a coma.

Baffled by this new technology that’s well employed in other industries and often afraid of the consequences of adopting this technology, the hospitality industry is taking to the cloud but only in bouts. Consider a scene out of a Sci-fi movie where a handful of people are brought back to consciousness after a prolonged glitch in their hibernation chambers, just to realize their ship’s navigation system is leading them astray. The case is similar with the hospitality industry… Very few hotel owners found their way home to the Cloud.

So, what are these concerns that are holding the hospitality industry back? Here we will discuss 8 common questions and concerns among hotel executives wanting to know more about the use of cloud computing at their property.

We have a system that we’re used to and we’re paying for its maintenance

Many hotels around the world still rely on their trusty old on-premise systems. Even in the most advanced of markets this remains the case. In a study by Grant Thorton titled “Emerging Clouds in Hotel Technology,” markets like the UK and U.S. have the highest adoption rates of a property management system, but only 32% in the UK and 30% in the U.S. have transitioned to using cloud technology. That means that approximately 70% of hotels still run operations on an on-premise PMS.  Even more interesting: many hotel chains and larger franchises have not yet taken to the cloud. Instead, the majority of hotel cloud users are the smaller and mid-range independent hotels. While on-premise PMS systems were a "must have" years ago, cloud technology has evolved and improved to the point where these on-premise systems are no longer necessary.

What's required for a hotel to run its operations in the cloud?

To start off, hotels can say goodbye to server rooms and all the technology that comes with it. No wires, no cooling system, no team working around the clock to ensure that malfunctions are kept at bay. What’s required is an internet connection and a PC to access the web application. The servers are no longer your headache as web server providers have a team trained to do just that. And with timely backups of data and security protocols in place, your data is ensured the highest grade of safety.

Without all the hardware, the AMC you pay is now non-existent and the stress of possible hardware failure is removed. Cloud systems mostly sell on a subscription basis and don’t include any maintenance costs.

It takes forever to migrate to a new system; where will the decades of data I have stored go?

Contrary to popular belief, migrating to a cloud system shouldn’t take that long.

To put things in perspective an on-premise setup requires:

  • A server room with servers
  • A cooling system
  • Lots of wires
  • A team to ensure these systems are up and running

And every workstation needs a licensed copy of the product installed on it. These systems are usually dedicated solely to the PMS and don’t really let you use the PC/Laptop for anything else.

In a cloud system, the servers are handled by an external web hosting service like AWS or IBM Watson (this varies based on your PMS provider). The amount of time taken for migrating to a cloud system is somewhere between 15 days to a month. When it comes to historic data, it can be easily saved and used for predictive insights.

What about staff training?

Cloud systems were built for speed and ease of use. Unlike on-premise systems that have their own learning curve and weren’t really built with ease of use in mind, cloud PMSs are generally super easy to learn and are designed thoughtfully. With clear and easy guidelines on how to perform tasks and usually dedicated account managers, the whole experience of maneuvering around the product is simplified.

What about data security?

Once you switch to a cloud-based system, the responsibility for data security rests on your PMS provider and the web server providers. With the number of organizations trusting their data with server services like AWS, Microsoft Azure, IBM cloud and even Google, you can rest assured that your data is in good hands. They have teams employed around the clock to ensure no data breaches or server downtimes occur.

Why shift to a cloud system when my on-premise system already does it all?

Speed!

But that’s not it.

A cloud PMS lets you do a lot more than just shift your server systems to an external provider. It can save you a large amount of money in terms of hardware and resources. It also enables the transfer of data in real time. That means that inventory is updated almost instantly and so are rates across all the channels you have. Certain cloud systems enable integrations to various third-party hospitality tools like channel managers, revenue management systems, ERPs, accounting and reputation management systems to name a few.

So why have all that separately? My PMS has it all in one package!

Well picture this, your PMS does perfectly what a PMS is meant to do. The add-ons and other capabilities in there are just thrown in for good measure. I'm not saying that these add-ons won't work. All I'm saying is that your hotel could do a whole lot better with products from companies that specialize in certain tools like channel managers, accounting systems, etc.

Now, again you may be using these tools as standalone platforms already, but a lot of the operational efficiency that your on-premise system claims to have, is lost due to this disconnect. Cloud systems ensure that all these tools function in a well-controlled ecosystem and in sync with each other. It can also boil down to personal preference. You have the freedom to choose the tools that suit you best, whether it is based on the price of the tool or the functionality it offers.

What if my current PMS provider has a cloud option?

That’s great, but the chances are that your PMS provider is offering a “hybrid” cloud solution. If done right, benefits of hybrid cloud systems are unparalleled, but they are not cost effective. They may be cheaper than an on-premise system, but they are not as affordable as pure cloud-based PMS systems. And even hybrid models come with their own set of problems.

  • Depending on the kind of setup you’re looking for, you will need an in-house IT team designated to ensure maximum security measures are taken.
  • A fast performing on-premise infrastructure could face issues while performing alongside a slow performing public infrastructure which can overall result in a rather laggy performance of your hybrid setup.

If not setup and done right, a hybrid system can turn out to be more of a nuisance than the boon it should be. So, tread safely along this path. But yes, if splurging on a well setup hybrid system is not an issue, then go for it. 

About the Author

Nikhil is a marketing evangelist at Hotelogix with an interest in curating engaging content for the right audiences. He is an automotive enthusiast and a music buff with a dream of one day, having these three interests make him his bread and butter