Buy or build your own PMS?

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!