Hotel owners have always been debating on whether to choose a hospitality management software on the cloud or just keep sticking with the good old On-premises system. The technology-savvy hoteliers would preferably lean on the modern cloud-based PMS, which has gradually caught up with all the features, conveniences, and benefits one seeks for earlier on the On-premises PMS.  

As its name describes, On Premises’ PMS and data are stored on a physical server at the site. The software shall then be installed on any workstation that needs access to it. The cloud-based PMS, on the other hand, typically features access through a web browser-based, making the software highly flexible and delivering real-time access to hoteliers. 

The cloud computing hospitality management software has been favored by hoteliers in the last few years, making a significant shift in the industry

Switching over to a cloud-based Property Management System has been going on for a while now. What does the cloud have to offer making this paradigm shift? Is it a trend or it is a new movement? Both systems serve the same purpose, however, each can be tailored to its customer’s needs differently. Here are a few highlights on the pros and cons of the two systems that have stood out for us. 

Technical Differentiations 

On-premise Property Management System requires a significant number of “on property” hardware compared to the Cloud-based one. It gives the hoteliers total control: data and the system, system configurations, networks, updates, and changes are all yours to decide. Running the On-premises PMS means hoteliers must maintain a dedicated server room, which also needs an effective cooling system and an around-the-clock support team to keep everything up and running smoothly.  

On-premise hotel management system puts hotel owners in complete control of the system, while be a heavy burden expenditure upfront

Backup data and migration can become a headache. They get accumulated over time. To make sure you store data correctly, update in time and security in check shall drain out your human resources.   

With the cloud computing vendors, the PMS providers would be responsible for most of the IT operations expense. The hoteliers can also get the advantages from the cloud computing vendors’ highly available servers, at their optimal performance. The upgrades and backups will also be covered by your vendors, as all of these are included in your contract.  

The Cost 

The On-premises PMS licensed fee normally does not include the initial setup fees and already totals up a huge sum of capital. The hidden cost includes hardware server costs, additional IT staff expenses to manage the system infrastructure, maintenance fees (yes, more maintenance fees), and the expenses of other 3rd party software integrations. Depending on the size of your hospitality business, everything adds up and gets more expensive by the day. The capital expenditure spent on the On-premise PMS can be a burden for small and medium-size hotel businesses.

The cost of purchasing a hospitality management system in a long term is not sustainable as your business model scales up

A cloud-based PMS has a much lower entry cost. They charge a fixed monthly subscription model, with a small initial setup fee. No server cost, maintenance fee, extra human resources cost, lower energy bills and is an extremely affordable budget for small and medium scaled hotel businesses.  

Mobility & Scalability  

If you value the ability to be accessible to your PMS anywhere in the world at any given time, the cloud-based Property Management System is the one. Your system is hosted on the internet and can be available to login using any devices supporting a web-based browser. Certain access restrictions can also be set up to enhance security if you have the need to do so. 

Although you can set up your On-premises PMS to be accessed from an off-site workstation or device, remote access can be affected by various factors. Getting real-time data can certainly be challenging, especially not at the speed that cloud-based PMS delivers.  

The cloud computing system provides greater flexibility in scaling up or down your hotel model and gives you the option to add or scale back licensing fees.  

Integrations 

The On-premise PMS has been around for years, way before the cloud-based system. It gets developed and integrated with countless integrations from accounting software to POS systems, from F&B to in-room management systems, and much more. However, the implementation of the process is complex and time-consuming. As cloud computing services are growing faster than ever, 3rd party software is constantly developing to adapt to the prevalence of cloud-based solutions. The integration process is getting easier and faster on the cloud thanks to the open API. Undoubtedly, On-premises PMS is still ahead of the Cloud-based system when it comes to the number of integration capabilities, the flexibility of built-in reports that got customized, added over the years. 

The cloud-based PMS makes the integration faster and much easier with the open API

Security 

Many hoteliers are afraid of not being in control if they cannot physically neither see nor locate the system in their property. It is old-fashioned thinking and is a quite common mindset found in the hospitality industry, mostly in big corporations and international hotel chains. 

In reality, they fail to consider following the security standards protocols for the in-house system. The server has to function at all times, meaning your hotel should have an uninterrupted power supply 24/7 with backup power to keep your server operating in a power outage or unexpected occurrences. Data backup for any crucial business data on your system is also essential in case of unusual erasing data events. Otherwise, a security breach can happen, losing your internal data, your brand reputation, revenue loss is unavoidable. 

On-Premises Property Management system puts you in total control of your servers, hardware, upgrades, data and so on, however, security protocols can be chaotic

The cloud-based PMS vendors have the expertise to carry out security procedures in building and maintaining the highly robust cloud computing platform. They help to remove all those hassles and vulnerabilities associated with servers automatically. With all the security standards to comply, hoteliers can rest assured that their data are well protected, the system is running up-to-date. They also offer public and private cloud computing networks for hoteliers to choose from depending on their preferences. 

Which Property Management System is right for my business? 

There is certainly not a right or wrong answer. Every hotel has its own requirement, expectation, and deployment strategy. Undoubtedly, there are many benefits the cloud-based PMS has outperformed On-premises: 

• Lower upfront cost: servers, IT staff, hardware, etc. 
• Regular and predictable cost for license fees and maintenance. 
• Highly accessible to the system in real-time 
• Quick and easy integration 
• Highly secured and very high uptime 

It explains the widespread adoption of cloud-based systems. The only thing you have to hold responsible for is your Internet connectivity which is basic infrastructure any hotel should already have in place. In fact, the switch to cloud-based PMS is not impossible for the existing On-premises system. With all said and done, we believe the shift toward Cloud-based PMS is here and you should take it into consideration. What is your thought on those two systems? Which PMS platform system you would go with? Share with us in the comment section down below.  

We also have a previous blog on the controversy of “Buy or Build your own Property Management Software?”. Be sure to check it out and don’t forget to tune in to the next blog where we share our own journey in Building hotel management software right here next week.  

The hotel business performance is measured and reflected in the revenue management indicators. Continuing the previous article about “The revenue management metrics every hotel owner needs to know (Part 1)”, we will go through the remaining 06 key revenue management metrics.

7. Direct Revenue Ratio – DRR (Direct Revenue Ratio)

What is Direct Sales DRR?

DRR is the index that shows the percentage of revenue coming from direct bookings such as website, phone, emails compared to the total revenue. The commission for third parties might affect your revenue and profits by around 40 percent.

DRR formula:

(Revenue from direct bookings) ÷ (Total revenue) x 100 =% DRR

Example:

In a month, your hotel generates $40,000 in revenue. The revenue comes from direct booking is $20,000, the DRR is calculated as follows:

DRR = $20,000 in direct bookings ÷ $40,000 of total revenue x 100% = 50%

How to improve DRR

• Encourage loyal guests

Keep a record of guests who have stayed at the hotel and occasionally offer them special offers. It will encourage guests to book you directly for their future visits.

• Use social media

Create a social networking site for your hotel to reach potential customers directly. Social media such as Facebook and Instagram are powerful tools to promote your hotel and make it easy for guests to contact you directly. 

• Direct booking privileges

To boost direct booking, you want to give your guests the privilege when they book directly with you. Free airport transfer, early check-in, late check-out, complimentary drinks, F&B discount, and so on are some of the offers you can give to direct booking guests.

8. Evaluate hotel comp sets

Research and evaluate your competitors are essential, no matter which industry you are in. By identifying groups of direct competitors, you can contrast and reference the potential of competitors.

Identify your competitors

You can determine your group of direct competitors by the following factors:

• Your position:

Positioning your hotel in the industry is the first step to identify your direct competitors. What types of accommodation facilities do you offer? How big are they? Who are their target customers? Answering those questions would help you identify your position and direct competitors. 

• Your services:

As well as positioning your hotel in the marketplace, you can identify competitors base on the products and services you provide. 

Market analysis

Once you know your competitors, the next step is to compare and analyze the market in which you are.

Step 1: Identify the group of competitors

Step 2: Assess your strengths and weaknesses

Step 3: Enhance improvement and development

Put yourself in the shoes of guests to get their standards and expectations from you and your competitors.

9. Marketing Cost Per Booking – MCPB

What is the marketing cost per booking?

The MCPB is the metric that measures the costs needed to attract new guests. With this metric, not only do you know how much it will cost you to get guests, but you also evaluate the effectiveness of your branding campaigns.

How to calculate MCPB?

The first step is to find out from which channels that your guests use to find your hotel. Calculating your average cost per acquisition can be simple, but here’s an equation to get started:

For each campaign or channel, subtract the total marketing cost from its total revenue.

This will help you figure out which channels are working well, and which are not.

10. Tripadvisor rating

Tripadvisor is one of the most popular reviews and rating sites in the hospitality and tourism industry. The voice of guests has the power and affects your hotel rating and booking.

How to increase reviews on Tripadvisor

Before you learn how to improve your ranking position on TripAdvisor, the first step is to get lots of customer reviews.

1. Create an Amazing Guest Experience
   One of the most fundamental things about getting a good review is that you provide the best experience. You have to deliver an experience, service that is beyond your guests’ expectations, so they want to share their incredible experiences with others.
2. Encourage guests to write reviews
   You want to encourage guests to leave a review about how they feel about their stay. You can ask guests to write reviews upon check-out, or you can send a thank-you email with a link to your TripAdvisor review page.

How to improve your ranking on Tripadvisor

Notice that reviews and ratings about your hotel on Tripadvisor do not always match. For example, you can get many good reviews but your hotel rating is not on top. Here’s the algorithm Tripadvisor is using:

• Latest Reviews:

Make sure you have new reviews on Tripadvisor regularly. The more recent reviews, the more trustworthy they are for potential customers. Outdated reviews are not valuable to your hotel.

• Review Score:

How positive are your reviews? Of course, when considering your Tripadvisor ranking, the strength of reviews will be taken into account. Keep impressing your guests.

• The Volume of Reviews:

How many reviews do you have? The more reviews you have, the more potential guests have to judge you. Keep encouraging guests to leave a review. Furthermore, regularly engage and respond to bad reviews to improve your reputation.

Booking.com – one of the world’s largest booking and review sites

11. Reviews on Booking.com

Booking.com – a platform of reviews, ratings, and reservations

Founded in 1996, Booking.com is now one of the world’s largest booking and review sites. Guests can write reviews and book rooms on a single platform. Therefore, Booking.com has a huge impact on hotels around the world.

How to increase your Booking.com reviews?

There are 02 steps to get more reviews: create a guest experience that is beyond expectations and encourage guests to write reviews by the end of their stay. In particular, if your guests booked through Booking.com then you do not want to miss their reviews. So how can you improve your ranking on Booking.com?

Booking.com allows guests to search for hotels according to their preferences such as hotels with swimming pools, spa services, etc. Therefore, you should always update your hotel amenities and facilities on Booking.com. This will help your ranking position in more searches.

According to Booking.com the best way to improve search ranking is keeping your page up to date. As long as your page is up to date and relevant to the guests you are targeting, then you should rank well in their searches.

12. Guest Satisfaction

Guest satisfaction – one of the most important metrics that you must pay attention to. There are several factors to take into account when measuring guest satisfaction. However, two main factors affect guest satisfaction:

• Essential services

You are providing essential services to customers: a place to eat & a place to sleep. The hotel is the guests’ second home. Therefore, you must make sure your hotel is clean, safe, and comfortable.

• Friendly staffs

Another factor that affects guest satisfaction in the hotel industry is the hotel staff. The staff’s welcoming and smiles are the first impressions of a guest. 

How to measure guests satisfaction

It is simple to know how satisfied your customers are: You can encourage them to write a review about their stay (on Tripadvisor, Booking.com, etc.). Or you can send them a survey via email or upon check-out.

How to improve guest satisfaction

There are many ways you can do to enhance your guest experience. A personalized experience such as a romantic couple room décor or a birthday cake, or even a hand-writing welcome note can impress your guests and give them a warm feeling.

2020 was a year with many challenges for the hospitality industry. Knowing 12 key hotel metrics is one of the ways to grow back in 2021. 

It is undeniable that OTA is one of the biggest channels to promote your hotel and contributes significant revenue for hotels. However, having your hotel bookings entirely depends on OTAs is not ideal as you have to pay commissions for each booking they deliver. When it comes to optimizing cost, it is essential to boost revenue from direct bookings.

Direct Bookings count when your guests book directly with you either via your website, phone call, or walk-in, without any other intermediaries.
So how should you boost direct bookings for your hotel? Here are a few tricks.

1. Optimize your hotel’s website

Put yourself in guests’ shoes to understand what drives them to make a booking decision. Guests may first discover your hotel via online channels, but they always at least check out your website, browsing for more information before making a reservation. So make sure your website provides the most accurate and attractive information about rooms and your hotels, and some good reviews would help. Your web doesn’t need to be excellent, over-the-roof, but a clean, simple, and eye-catching one to create a good impression.
The majority of travelers book their stay on mobile, so it’s essential to have a mobile-friendly website.
Next, optimize your website to rank on Google. It is not a one-day task, but you have to keep it up as you don’t want to lose to competitors.

2. Simplify the booking process
Try to narrow your booking process down to 3 steps, make it short & simple to reduce the opt-out rate. And it is best to learn from top online booking sites.

Also, make sure your reservation system supports multiple payment methods, as well as the ability to integrate with PMS.

3. Offer more values for guests
Guest experience is not a myth, and you should take good care of it. Travelers expect more and more from their stays. The loyalty program is one of the best ways to show you care about your guests. Offer loyalty programs when guests book directly with you, where they can earn points and redeem for services discount at your hotels.

4. Increase your hotel’s reputation
Good reviews can influence a traveler’s booking decision in a big way. On the 5-point rating scale, even just a 0.5 point makes a huge impact (for ex. from 3.5 to 4). So, it’s crucial to have a strategy to collect good reviews and smartly display them on your website. Handling bad reviews is also needed to be put on the plan. Wrong ways of handling bad reviews could result in more bad reviews or destroy your reputation.

5. Leverage the power of social media
Young travelers love their social media. Thanks to social media and the internet, traveling memories are sharing across the globe in an instant. And you want your hotel’s brand is in those moments. Have your guests share photos of your hotel rooms or tag your social account on their posts is the best media tactic one could ask for.

Hotel software management – also known as Property Management System (PMS) has imperceptibly become a necessity, the heart of the hospitality business ecosystem. Every hotel owner, from small to boutique, corporation to multinational hotel chain, will eventually come across this conundrum: “To buy or to Build our own PMS?” at least once in their career. Even though it is a simple yes/no question, to come up with an answer will take you countless debates, meetings, discussions, persuasions and sleepless nights. With either choice, the final decision ultimately determines the next stage of your business. It can possibly pave your very first step in the Digital Transformation evolution journey.

To Buy or To Build your own Property Management System – the ultimate question to anyone in the hotel industry

Then which is better? In this blog, let us walk you through the whole process. You might be able to find yours ;).

Buying a Property Management System is quicker and easier

There are two types of hospitality management software out there that have been used popularly: On-Premise PMS software – everything is done internally from implementation to running the solution, maintenance to updates and setting up your servers; and the cloud-based PMS – cloud provider maintains servers, network and software for you, you can access all the information hosted by the vendors on a web browser-based, requiring no active management.

Both options are widely marketed from all the big brands in the hospitality industry software, such as Opera PMS by Oracle, Protel Air by Protel, Hotelogix PMS by Hotelogix, MSI CloudPM by MSI and so on.

Depending on your hotel model and operation needs, you can decide to stick with either On-Premise or Cloud. We shall have a detailed blog on The Cloud Property Management System and On-Premise Property Management System Showdown following up very soon, this might be able to help you figure this out.

Have an off-the-rack hotel management system up and running can be faster and economically efficient for small scales hospitality business

Purchasing a ready-made PMS is convenient. Have all your requirements listed out and match it with the existing PMS that provides those features. Voilà! You can have the system in place within days! It definitely benefits if your hotel model is small to medium size. The value-added from the PMS can be shown in a short period of time right after the installation. This means you can achieve a higher ROI ratio pretty quickly. Plus the initial cost of purchasing an off-a-shelves PMS is rather a fraction of the cost of building one.

The odds of purchasing your own PMS

Although big brands are involved in the making, all the PMSs still have their own limitations. Here are the few (but not limited to) that hotel owners have experienced over the years. If you do experience the same, don’t forget to like our blog knowing you are not alone.

The intuitive user interface:

Many have underestimated this feature, but it plays a tremendous role in the purchase decision process. The better and more easy-to-use interface the Property Management Software has, the faster a user can learn and adapt to it. Result in much less training time obviously.

Customizable Reservation, Fees & Taxes

Reservation might seem easy and impossible to go wrong to some, but when you have multiple channel reservation systems within your hospitality software management, overbooking happens more often than you think. Having it tailored to your hotel preferences, can be tricky and require extreme help from the PMS support team. Especially when it comes to complicated fees and tax policy, it can take months (if you are lucky) or longer (if not never) when there are technical customizations involved to get it running.

Report System

Mostly the report system comes with generic reports that won’t meet up your hotel report’s requirement. You’ll find the report system to be either too specific or too broad. Sometimes it just does not have the type of report that you are looking for. Seeking support can be discouraging, as you would end up receiving the typical “out of our scope” response or “we will put it on our next release” to later know that request would never be granted. It’s unlikely for the PMS vendor to acknowledge your problem as a worthy addition.

Buying an existing PMS for your hotel can result in frustration with the lack of reports you actually need

Accessibility & Integration

Unable to access your Property Management System from your mobile? Take too long or it won’t sync in real-time? Difficult to integrate with your current Hospitality Point of Sales, OTAs and the Hospitality Channels Manager? Before purchasing, you might look forward to all the promises the PMS sales team has committed to. Your high expectations will only bring greater disappointments. Be sure to keep those expectations on your brief and actual contracts, otherwise be clear on the possible risk of failure.

Supported languages & currencies

Double-check whether or not your Property Management System supports your local languages and currencies. If not, it sooner or later will impact your system and may cause a contradiction with the other existing software you already have. It’s best that your PMS supports all languages & currencies, or get ready to be back on the hot seat of whether to suffer from the accumulating frustration or starting over with a new PMS system.

In-time support and upgrades

Getting the support in-time can be a struggle! The software never runs smoothly as they promise. Without the support and upgrades, it means nothing. Some PMSs are well known for their prolonged queuing support time. Surprise? Unfortunately, this is the norm! Nobody would like to wait for 3 whole business days in order to get supported when your system is crashed and unable to function probably. The dependency on the support team along the way will scare you for good, especially to those who have enterprise-level PMS software.

Is Building the New Property Management Software for everyone?

Building the complete new software starting from scratch is not anyone’s cup of tea. It is almost impossible and out of the norm for small and medium-size hospitality businesses to walk this path.

It can be difficult to start building your own Property Management System, especially if your business is a small scaled hotel

The opportunity cost

The project can accumulate technical debts along the road and later turn into a technical deficit, making the software quality suffer. It also does not justify the cost of operations. The math on the opportunity cost of allocating the additional resources in building the software or spending the same cost to focus on other smaller budget projects might bring greater revenue and assets for the hotel in the short-term period may put a halt on the project.

The timeline and human resources

Even if a hotel owner goes ahead in building software, it would not suffice to find a competent team of technology specialists building PMS software within the scheduled timelines. Many others took years to build and perfect their software, how can hotel owners be able to manage the team to deliver on the dot.

How many other projects and assets you have to give up in order to build your own hotel management system? Is it worth the trade-off?

The budget

Last but not least, what is the actual budget? Will there be sufficient resources to help see it through to completion? It can get overwhelming at times and may make the owner compromise for less. Though the hotel might have proposed a timeline and finances, while in the making, things can merely go sideways. Are hotel owners prepared to take a failure? Honestly speaking, not many are willing to accept the loss of building a PMS project. It leaves a heavy financial burden to carry on.

Then who would like to take this bumpy road in building a brand-new PMS themselves?

There are multinational and big corporation hotel chains willing to invest in building their own PMS system. Any company with a long-term vision in scaling up, dependency on PMS vendors is not ideal, as its pricing model won’t be sustainable for the hotel’s system.

In addition, waiting for the PMS vendors to solve the unique problem specific to a hotel is unrealistic. Especially if the problem is one of the kinds, the issue shall be pushed to the very end of their backlog that never gains enough interest or benefits for them to proceed.

Getting your PMS software developed in-house guarantees a fully customizable model that can touch base on all the problems, issues, and expectations that one hotel currently confronts with. It puts the owner in complete control over the software from collected data to even security risks, from operation compatibility to mobile-friendly, and so on.

Building your own hotel management software brings greater value and rewarding if you can go through with it

In short, if you have an in-depth knowledge of the hospitality industry, inside and out, coherently and thoroughly, from its process to operation, front to back; while owning a strong and committed technical team then we don’t see any reason to hold you back from building a PMS for yourself. All the cons shall cancel out once you meet those two criteria; the pros shall recapture your mission, vision and reassure the investment you make is well-spent. Remember patience and persistence are your friends.

This has been rather a long blog, and we hope you have got the answer you have been looking for. What do you choose to do: Build or Buy? Drop us a comment down below. We love to hear your side of the story.

Tune in with us on our next blogs, where we will dig deeper into the software insights that you don’t want to miss. See you here, this time next week!

To manage your hotel effectively, here are the 12 key metrics that you need to understand. In the challenging year of 2021, improving the following 12 metrics is even more essential to growing your business.

1. Average Occupancy Rate – AOR

What is the AOR?

AOR is the percentage of occupied rooms compared to the total number of hotel rooms in a given period. The AOR is one of the most important indicators as it shows the hotels’ performance. The AOR index is the foundation to calculate the GOPPAR index. Ideally, the AOR should be 65% or more in a year.

AOR formula:

(Total number of rooms occupied) ÷ (Total number of available rooms) x 100 =% AOR

Example: 

In one month, your hotel has 65 rooms occupied out of 100. So, your AOR for that month will be:

65 used rooms ÷ 100 existing rooms = 65% AOR

How to improve the average occupancy?

• Special treats for returning guests

Collect and save your customer information to build a personalized experience, loyalty program to attract more returning guests. 

• Hotel chain

For business travelers, you can consider opening a hotel chain with properties in strategic locations. This tactic will diversify your brand.

• Special promotions

Create an exclusive offer for each targeted group of customers to attract them to your property.

2. Average Daily Rate – ADR

What is ADR?

ADR describes the average daily income per paid occupied room. ADR is used to measure the business performance of your hotel.

The formula for calculating ADR index: 

(Average room revenue earned) ÷ (Number of rooms booked) = ADR 

Example: If your hotel makes $20,000 in room revenue by booking out 200 rooms, then your ADR would be: $20,000 room revenue ÷ 200 rooms booked = $100 ADR

Note: When calculating ADR, do not include the formula for unpaid rooms, non-paid rooms for staff, etc.

How to improve ADR?

• Increase room rates

One of the simplest ways to improve your ADR is to increase room rates. However, you need to carefully consider the pricing strategy to come up with a reasonable increase.

• Focus on potential customers

OTA sites are great sources of information about potential customers who have a high ADR. Business travelers, for example, are often seen as high-value customers. Focus on attracting these customers would improve your ADR.

3. Revenue Per Available Room – RevPAR

What is the RevPAR Index?

RevPAR is one of the important metrics. This index shows the revenue per available room (both occupied and unoccupied rooms).

Difference between ADR and RevPAR:

The ADR only shows the revenue from occupied rooms, while RevPAR presents room revenues and hotel reservation rates. In other words, the RevPAR index shows a big picture of the actual room revenue performance based on the number of rooms of a hotel.

RevPAR formula:

Average daily rate (ADR) x Average occupancy rate (AOR) = RevPAR

Or

Room revenues ÷ Available rooms for sale = RevPAR

Example:

If you have 200 rooms, with an ADR average daily room rate of $ 100 and an average occupancy of 80%, total revenue is $ 16,000, RevPAR would be calculated like this:

$ 100 (ADR) x 80% (AOR) = $ 80 (RevPAR)

$ 16,000 (Room revenue) / 200 (Available Rooms) = $ 80 (RevPAR)

How to improve your RevPAR metrics?

• Adjust room rates based on market demand

To increase your RevPAR, you need to improve your ADR and AOR. You can decrease low-season room rates to increase your AOR and increase your room rates during the high season to boost your ADR, and overall improve your RevPAR.

• Discount offers

Different offers for different seasons or holidays are always attracting guests’ attention. Such as wedding packages including rooms and romantic dinners; or family packages for Christmas or summertime.

• Upselling strategy

One of the strategies to improve your RevPAR indicator effectively is upselling. You can provide other services such as breakfast in bed, room upgrades…Upselling not only encourages guests to spend more on your property but also leverages their experience.

4. Total Revenue Per Available Room – TrevPAR

What is TrevPAR?

If hotel-related KPIs are as diverse as they are numerous, then TRevPAR or total revenue per available room is the rainbow-flavored ice cream of performance metrics. TrevPAR shows the total revenue from every service brought to a hotel.

The difference between TrevPAR and RevPAR:

TrevPAR shows the total revenue from each guest stay, including services and purchases such as restaurants, spas, and bars. Meanwhile, RevPAR only shows the revenue from rent rooms.

TrevPAR formula:

(Total revenue) ÷ (Total number of available rooms) = TrevPAR

Example:

Let say you own a hotel with 30 rooms. Last month, total hotel revenue included dining, bar, and other services were $30000. The TrevPAR index is calculated as follow:

$ 30000 total revenue ÷ 30 rooms = $ 1000 TrevPAR

How to improve the TrevPAR indicator?

• Save guest profiles

Collect your guests’ information is essential for improving the guest experience and encouraging them to use more services during their stay. For example, information like traveling style, favorite room, favorite food, activities, special needs…By understanding your guests, you can deliver a better experience.

• Improve your services

The most obvious way to increase your TrevPAR index is to improve the services of your hotel. You want to make sure that the food is good, the spa is clean, and delivers exceptional services.

• Upselling strategy

You can apply an upselling strategy to the services that you offer in your hotel: special parking areas, room upgrades, spa packages, and so on.

5. Gross Operating Profit Per Available Room – GopPAR

What is the GopPAR?

GopPAR looks at the performance of your hotel via revenues and expenses. GopPAR can tell you a lot about the financial health of your hotel.

The difference between TrevPAR and GopPAR:

TrevPAR gives you an overview of how the business is doing across the board based on revenue. Meanwhile, GopPAR goes a step further and looks at how your hotel is doing in terms of operational performance. Based on the TrevPAR index, you will see that the hotel is doing very well with great sales. However, if the operating costs are too high, the GopPAR metric will show that the actual profit is not as you expected, and you will have to keep your operating costs under control.

GopPAR formula:

(Gross revenue) – (Operating expenses) = Gross Operating Revenue (GOR)

(Gross Operating Revenue) ÷ (Total number of available rooms) = GopPAR

Example:

Assuming you have 10 rooms, your gross operating revenue (GOR) last year was $100,000. The calculation of the GopPAR is as follows:

$100,000 GOR ÷ 10 rooms = $10,000 GopPAR

How to improve GopPAR Index?

• Boost your revenue

Increasing hotel revenue would result in increasing the GopPAR. There are several ways to do it. For example, adjusting room rates, create add-on packages…However, you want to plan a pricing strategy that matches the quality of the service you provide.

• Minimize operating costs

In addition to increasing your revenue, cutting your operating costs will also improve your GopPAR. Using modern management software and applying technology in daily operations can help to cut costs. Note that cutting operating costs must not affect your guests’ experience.

6. Average Length of Stay – ALOS

What is ALOS?

ALOS stands for Average Length of Stay. In other words, this is the metric that represents the average number of night guests staying at your hotel. By tracking the ALOS index, you can find out if your guests stay shorter or longer than usual. As a result, you can encourage longer stays at your hotel.

ALOS formula:

(Total occupied room nights) ÷ (Total number of bookings) = ALOS

Example:

Let us say you had 60 room nights and 12 bookings in the previous month. So, the ALOS in that month will be 60 ÷ 12 = 5 nights.

How to improve ALOS?

• Setting a minimum length of stay

A quick way to increase ALOS is to set a minimum length of stay (02 nights, 03 nights, etc.). This will significantly improve the ALOS, especially in the low season.

• Flexible pricing policy

You can offer promotions for longer stays. For example, a discount of 5% for guests staying 05 nights or more. 

Catch on to the rest of the metrics in the next article: “The revenue management metrics every hotel owner needs to know (Part 2)” to learn about 06 other important metrics in measuring your hotel business.

Travel agencies (TAs) are an important channel, contributing a lot of sales for hotels, besides online travel agencies (OTAs) or direct booking. Depending on your business size, the number of travel agencies you have can vary from a handful to dozens. When it comes to booking management, this can be a hassle for both sides. Hoteliers could have a difficult time controlling the inventory between agencies and making sure room, and rate information are correct. On the other hand, travel agencies are struggling to get the best rooms at the best rates available. Phone call reservation with the hotel is time-consuming and not effective as information is quickly outdated.

A booking portal or a reservation system was created to bridge this gap and remove the difficulties for agencies and hotels from making reservations.

How it works

A Booking Portal plays the role of a middleman. It is a platform between agencies and hotels where agencies can place direct bookings.

• For travel agencies

With the Booking Portal, agencies can check real-time information of inventories, rate plans for them from the hotel. They can search, book easily and instantly. Also, there are options to view booking history, make adjustments, add or cancel reservations. All in one platform, no hassle, no delay.

• For hotels

The software makes life easier for hoteliers in managing travel agent profiles and their bookings. You can make sure the information is always in sync, and you can check the performance of any agency in no time.

Managing booking through agencies is easy with the Booking Portal

Benefits of the Booking Portal

• Remove manual processes
  One platform for all activities: check, book, edit, and even cancel. Everything is quick after few clicks, no phone call, no waiting time, and no error. The process is now automated with real-time data and updates for both sides.
• Reduce overbookings
  Agencies can only book rooms and rates available for them. Having a central pool of inventories helps hotels reduce the risk of overbookings.
• Increase revenue for both
  As people said a satisfied customer is the best business strategy. Through a booking portal, hoteliers make it easy for travel agents to satisfy their guests’ demands, which returns in a win-win situation for both hotels and travel agencies.

Do I need one?

There is no correct answer to this question, but it all depends on your TA network. If you find it taking too much time and effort with your current way of doing things, probably it’s time to consider having a booking portal.

Contact us now for a free consultation about Booking Portal!

The Food and Beverage industry is one of the fastest-growing businesses in Vietnam. Whether you are running a coffee shop or a restaurant chain, you need a management system to help run and manage your business effectively. Why you need one, and what are the benefits a system can bring for your business? We will discuss these points in this article.

What an F&B management system can do

This software is built to support all restaurant operations and can apply to almost all business models. Here are some of the main features:

• Manage all your restaurant information: floor plan, area map, table setup, menu, promotions, and so on
• Connect and synchronize all POS devices
• You can split – combine orders, view order history, apply for promotions, send orders to kitchen printers or kitchen display units
• Manage employee & work shift

Besides, for hotels and hotel chains, an F&B system must have the ability to integrate with PMS to allow in-room charge.

What are the benefits?

• Save operation time and costs: All operational activities, from creating orders, printing bills to sending invoices, can be done quickly right on a POS device or mobile application. Your staff can serve guests smoothly and deliver excellent hospitality.
• Minimize errors: All the data is updated and synchronized between POS and kitchen printers. And this helps to remove the risk of wrong orders which could bring disappointment to your guests.
• Better business management: knowing your business performance at the right time with the correct data is very important. What you can count on as an F&B software is its clear dashboard and comprehensive reports. Just a glare to know how the business is going.
• Improve customer service: serve your guests better with a system that handles all your operation needs, so your staff can spend more time with the guests.

Select one for your restaurant

No matter what size or scale of your restaurant operations may be, the right management system is your most reliable source when it comes to both efficient operations and optimal growth. Here are points you should consider when selecting a system

1. Data transparency
   You want to make sure that the system gives you real-time data; across businesses. A restaurant manager needs to know what’s going on all the time. It is critical to have real-time data as you may need timely action when problems arise.
2. Easy to use
   No one wants a complicated system that takes months to master. Check the system interface before you decide to buy one. To make sure the interface is user-friendly, clean, and easy to understand.
3. Scalability
   Choose a system that can support your growth and geographic expansion in the long-run. You don’t want to keep changing the software as your business expands, as it will cost you a lot.

If you still have questions regarding choosing the right F&B system for your restaurant, don’t hesitate to contact our consultant team for further advice.

In the fast-paced world of hospitality, leveraging technology is crucial for streamlining operations and elevating guest experiences. A Central Reservation System (CRS) stands out as an essential tool, acting as more than just a booking platform. It’s a comprehensive system designed to manage room inventory, rates, and reservations across various channels, ultimately enhancing booking processes, optimizing room management, implementing dynamic rate control, and improving guest service. Let’s delve into the intricacies of CRS, highlighting its features and benefits within modern hospitality management.

Introduction to Central Reservation System

What is CRS?

A CRS, or central reservation system, is a sophisticated, computerized platform used to store and distribute detailed information about hotels, resorts, and other lodging facilities. At its core, a CRS centralizes critical data, including room inventory, pricing strategies, and reservation specifics, making it easily accessible across numerous distribution channels. This ensures that potential guests can effortlessly find and book accommodations while empowering hotel staff to manage reservations efficiently.

Importance in the Hospitality Industry

The importance of a CRS in the hospitality sector is undeniable. It offers real-time visibility into room availability, which is crucial for maximizing occupancy rates. By adeptly managing rates and inventory across a multitude of channels, a CRS helps hotels optimize revenue streams and significantly reduces the risk of overbooking. Furthermore, it greatly enhances the guest experience by providing seamless booking processes and personalized service interactions.

Evolution of Reservation Technologies

Historically, reservation systems relied on manual processes, characterized by phone calls and physical ledgers. As technology advanced, these manual methods evolved into computerized systems, paving the way for the development of the modern CRS. The advent of the internet and online travel agencies (OTAs) further revolutionized the CRS, enabling direct online booking and more sophisticated multi-channel distribution strategies. Today, CRS systems continue to evolve, integrating seamlessly with other hotel management systems to deliver comprehensive and holistic solutions.

Differenced between PMS, CRS, and channel manager

A property management system, or PMS, is all about operations. It manages all operational activities in a hotel from reception to accounting.

And normally, CRS is the main module of a PMS. It, of course, can be a stand-alone solution.

A Channel manager controls all distribution channels like OTAs, metasearch sites, GDSs. It connects to PMS, collects data from CRS, and re-distributes across channels. As rooms get booked, the inventory information is synced throughout all channels to prevent overbooking

Core Components of CRS

Booking Channel Management

Booking channel management is a pivotal component of a CRS, focusing on the strategic management of reservations across a wide array of platforms. This includes direct bookings, online travel agencies (OTAs) such as Booking.com and Expedia, and Global Distribution Systems (GDS). A robust CRS ensures that information remains consistent and accurate across all channels, thereby minimizing discrepancies and optimizing booking efficiency. Effective channel management ensures hotels aren’t losing revenue due to outdated information or missed booking opportunities.

Real-Time Reservation Synchronization

Real-time reservation synchronization is essential for ensuring that room availability and rates are updated instantaneously across all booking channels. This synchronization is critical for preventing frustrating overbooking situations and ensuring that guests receive accurate, up-to-date information when making their reservations. Additionally, it allows hotels to dynamically adjust rates in response to demand fluctuations and evolving market conditions. Hotels that lag in real-time synchronization risk alienating customers and damaging their reputation.

Inventory Control Mechanisms

Inventory control mechanisms within a CRS provide hotels with the ability to efficiently manage their room inventory. By meticulously tracking availability in real-time, hotels can optimize occupancy rates and maximize revenue potential. A sophisticated CRS will offer a suite of tools for setting inventory limits, managing various room types, and implementing effective yield management strategies.

Multi-Channel Booking Integration

Multi-channel booking integration involves seamlessly connecting the CRS with diverse distribution channels, including OTAs, GDS, and direct booking platforms. This integration significantly expands a hotel’s reach and increases its visibility to potential guests. By delivering a seamless and consistent booking experience across all channels, hotels can attract a broader customer base and drive substantial revenue growth.

CiHMS Central Reservation System Features

CRS Dashboard Overview

The CiHMS CRS dashboard provides a comprehensive and intuitive overview of a hotel’s reservation data. Users can efficiently search and sort reservations by reservation date, check-in date, or check-out date and filter reservations by status, such as confirmed, checked-in, checked-out, or canceled. The data is presented in both graphical and list formats, enabling users to quickly grasp revenue and occupancy trends and make data-driven decisions.

Reservation Management Capabilities

CiHMS excels in providing extensive reservation management capabilities. It is meticulously designed to effectively reduce overbookings, ensuring smooth and efficient operations for your property. The software’s advanced filtering capabilities facilitate quick and easy access to reservation details through a simple search by reservation number. This level of detail ensures that every reservation is handled with precision.

API Integration Strengths

CiHMS boasts robust API integration, allowing it to seamlessly connect with other essential systems such as Property Management Systems (PMS), booking engines, and channel managers. This smooth integration streamlines data flow, minimizes manual data entry, and significantly enhances overall operational efficiency. API integration guarantees that all systems work in harmony, optimizing workflows and reducing errors.

Preventing Overbooking

A key advantage of using CiHMS is its robust ability to prevent overbooking. The system’s real-time synchronization ensures that room availability is accurately reflected across all channels, minimizing the risk of double bookings. Additionally, CiHMS provides essential tools for managing inventory limits and implementing alert systems that notify staff of potential overbooking situations before they escalate. This proactive approach protects both the hotel’s reputation and guest satisfaction.

Benefits of CiHMS CRS for Hotels

Streamlined Booking Processes

CiHMS streamlines booking processes by offering a user-friendly interface for managing reservations efficiently. From the initial booking to the final check-out, the system automates crucial tasks, reducing manual effort and improving overall efficiency. A recent report indicates that hotels employing automated systems often experience a 20-30% reduction in booking errors, which translates to tangible cost savings and improved guest satisfaction.

Enhanced Room Management

With CiHMS, hotels can efficiently manage their room inventory, ensuring optimal occupancy rates and improved revenue performance. The system provides essential tools for tracking real-time availability, managing various room types, and implementing sophisticated yield management strategies. This enhanced room management not only optimizes revenue but also contributes to improved guest satisfaction by ensuring the right rooms are available at the right times.

Dynamic Rate Control

CiHMS empowers hotels to implement dynamic rate control strategies, enabling them to adjust rates based on real-time demand, seasonality, and other market factors. This flexibility allows hotels to maximize revenue and maintain a competitive edge in the ever-evolving market. Dynamic pricing can lead to higher average daily rates (ADRs) by strategically optimizing rates based on demand, thus ensuring hotels are not leaving money on the table.

Improved Guest Service Experience

By streamlining booking processes and facilitating personalized service, CiHMS significantly enhances the guest service experience. The system allows hotel staff to quickly access critical guest information, enabling them to provide customized recommendations and address guest needs more effectively. This personalized approach fosters greater guest satisfaction, loyalty, and positive reviews.

Technical Advantages of CiHMS CRS

Real-Time Data Synchronization

CiHMS excels in providing real-time data synchronization, ensuring that room availability and rates are consistently up-to-date across all channels. This synchronization minimizes the risk of overbooking and provides guests with accurate information when making reservations, avoiding potential frustration and negative experiences.

Cross-Platform Compatibility

CiHMS is designed with cross-platform compatibility, enabling it to be accessed seamlessly on various devices, including desktops, tablets, and mobile phones. This ensures that hotel staff can efficiently manage reservations and access critical data from any location, at any time, fostering greater flexibility and responsiveness.

Advanced Filtering Options

CiHMS offers advanced filtering options, allowing users to quickly find and sort reservations based on specific criteria, such as reservation date, check-in date, or room type. This makes it easier to manage reservations efficiently and identify relevant trends, saving time and improving decision-making.

Reservation Detail Export Features

CiHMS allows users to export reservation details in multiple formats, simplifying data analysis and report generation. This feature is particularly useful for revenue management and strategic forecasting, providing valuable insights for optimizing business performance.

Impact on Hotel Operations

Efficiency Improvements

The integration of a CRS like CiHMS leads to significant efficiency improvements in hotel operations. Tasks that once required extensive manual effort, such as updating room rates and managing inventory, are now automated. This not only saves valuable time but also reduces the likelihood of errors, leading to smoother and more reliable operations.

Revenue Management

A CRS not only optimizes occupancy rates but also maximizes revenue through the implementation of dynamic pricing strategies. CiHMS enables hotels to adjust rates in real-time based on demand, seasonality, and competitor pricing. This adaptive approach ensures that hotels consistently offer competitive rates while maximizing their revenue potential. A study by Sabre indicates that hotels with advanced CRS capabilities often experience increased revenue due to improved rate management and distribution.

Reduced Manual Administrative Tasks

CiHMS significantly reduces the burden of manual administrative tasks. By automating key processes such as booking management, inventory updates, and comprehensive report generation, the system frees up hotel staff to focus on delivering exceptional guest service. This leads to improved staff productivity and reduced operational costs.

Enhanced Guest Satisfaction

Ultimately, the integration of CiHMS results in enhanced guest satisfaction. By streamlining booking processes, offering personalized service, and ensuring prompt and efficient support, hotels can ensure guests have a pleasant and hassle-free experience. These positive experiences often lead to loyal guests, increased satisfaction rates, and positive reviews, all of which contribute to long-term success.

Future of Central Reservation Systems

Emerging Technologies

The future of CRS is closely linked to the integration of emerging technologies such as artificial intelligence (AI), machine learning, and blockchain. According to recent research, incorporating real-time data synchronization and multi-channel integration can typically boost revenue by maximizing room sales across all channels, showcasing the direct impact of technology on financial performance.

Predictive Booking Capabilities

Predictive booking capabilities, powered by AI and machine learning, will empower hotels to forecast demand more accurately and optimize pricing strategies more effectively. This proactive approach enables hotels to manage their inventory strategically and maximize revenue potential by anticipating future trends.

AI and Machine Learning Integration

AI and machine learning are poised to play an increasingly vital role in CRS, automating routine tasks, personalizing guest experiences, and optimizing revenue management strategies. From AI-powered chatbots that handle customer inquiries to advanced pricing tools, these technologies will transform the way hotels operate and improve their overall efficiency.

Personalization Trends

Personalization is a key trend driving the future of CRS. Hotels will increasingly focus on providing customized offers and tailored experiences to meet individual guest preferences. This personalized approach will not only enhance guest satisfaction but also drive loyalty and encourage repeat business.

Conclusion

Recap of CRS Importance

In summary, a Central Reservation System (CRS) is an indispensable tool for modern hospitality management. It streamlines booking processes, enhances room management, empowers dynamic rate control, and significantly improves the overall guest service experience, making it a cornerstone of successful hotel operations.

CiHMS CRS as a Comprehensive Solution

CiHMS stands out as a comprehensive CRS solution, offering a wide array of features and benefits specifically tailored to meet the diverse needs of hotels. From its intuitive user dashboard to its robust API integration, CiHMS provides the essential tools hotels need to thrive in today’s highly competitive market.

Call to Action for Hospitality Businesses

For hospitality businesses in Southeast Asia looking to enhance their operations, improve guest satisfaction, and drive revenue growth, CiHMS offers a powerful and effective solution. Contact us today to learn more about how CiHMS can help your business achieve its fullest potential and secure a competitive advantage in the market.

What is a Channel Manager?

A Channel Manager is a utility software that connects hotels to all online distribution channels and manages bookings from these channels.

Channel Managers can connect to dozens or hundreds of sales channels, global OTAs channels. It’s a powerful tool to boost your bookings while automatically updating and synchronizing your information in real-time on all channels.

How does Channel Manager work?

Thanks to the emerging technologies, travelers prefer to book their stays online, we see the rise of online booking agents (OTAs) such as Agoda, Booking.com, or Expedia. In the old way of doing, hoteliers would go and negotiate with each of these OTAs and then manage their bookings separately.

Channel Managers were created to remove these hassles, to help hoteliers get a better chance to enter new market places without losing revenue. Through Channel Manager, you can sell your inventory via online distribution channels around the world.

• Close/open inventory quickly

• Update room, rate plans, availability in real-time

Fully integrated with other distribution channels and 3rd party software let you automate business process without maing human mistakes

Channel Manager can act as a stand-alone system connecting distribution channels with your hotel, or even better, it can be integrated with the hotel’s PMS to fully automate your operations.

As an independent system:

You will have an account to access the Channel Manager dashboard where you can manage information such as room rates, room availability, and promotions. Channel Manager will automatically update this information for every channel. Because it operates independently, you have to monitor the Channel Manager dashboard regularly and manually update bookings to the PMS system (if any).

PMS integration:

• One-way integration: with this, once a booking is created, Channel Manager will send this information to your PMS.
• Two-way integration: The two-way integration between Channel Manager and PMS means room availability and room rates will be updated from PMS to Channel Manager and vice versa in real-time. This way will save you a lot of time in operations between two systems.

Channel Manager works independently or integrates 2-way with PMS system

Why you need a Channel Manager

Minimize operation time: a channel manager can integrate with your property management system or central reservations system as well as a booking engine to create a central control for your bookings.

Remove manual processes: with Channel Manager systems, you can say goodbye to manual data entry, which is time-consuming, and sometimes, creates errors. Besides, you will reduce the risk of overbookings as guests can only book a room that is actually available.

Increase profit, improve brand recognition: a channel manager can help you put your brand into the new markets, and there is a good chance that travelers will first discover your hotel on one of the top online travel channels. Connect to more online channels, more online bookings.

In short, a channel manager is a powerful tool to boost your bookings and revenue, while making life easy for you to manage inventories across distribution channels. Should you need further information on Channel Manager solutions, feel free to contact us!