Cloud-based PMS: From CapEx to OpEx

This article is the final of a three-part series on cloud-based PMS.

When a hotel moves to a cloud-based property-management system, the expenditures for the PMS move from a capital expense to a monthly operating expense, which can be very freeing to a hotel’s budget. Hoteliers no longer need to purchase and store all the hardware needed to run a property-based PMS.

This also means that there are no hardware failures, no maintenance to systems, no need to worry about timing upgrades and no versioning issues with programs, said Todd Sabo, president and GM of RMS North America. There also are no installation costs with installing all that hardware and no need to configure a space to house that equipment.

“With just renting the software, there are minimal setup costs and easy configurations — you’re basically renting the software for a predictable monthly amount,” he said. “It is much more budget-friendly.”

With cloud-based systems, the vendors take over the responsibilities for the systems’ health, said Erik Weller, SVP of education at Itesso. “When you have an on-premise system, the owner is responsible for the back-ups,” he said. “Now that hoteliers use software as a service, the vendor is responsible for back-ups and maintenance, leaving the hoteliers free to provide customer service.”

But Larry Hall, president and CEO of Springer-Miller, warned that careful consideration must be given to the Internet network. “Network configuration is very important — if the property’s Internet network isn’t set up correctly, you’ll have issues,” he said. Hall suggested that hoteliers work with their PMS vendor for what type of increased bandwidth they may need and look for a back-up provider in case of extreme emergencies.

Vendors can monitor much more than if the system is operating or not, Weller said. The vendors can check on the telephone system, the entry/lock systems and room temperatures. “We can offer more proactive support,” he said. “We can fix problems before the hoteliers even notice they have one.”