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Property Management Systems *

Top PMS Vendors by Property Type *

Market Summary – Property Management Systems

Market Overview

The field of Hotel Property Management Systems is crowded. As those in the industry understand, this is an understatement. As of this writing, Capsolve has identified 469 Hotel Property Management Software solutions designed specifically for the industry. The proliferation of solutions has occurred for many years due to multiple factors and ultimately stems from the wide variation of needs across the industry.

As consumers, we may stay at properties with a consistent footprint from a design and functional perspective. However, even hotels within the same brand may have different needs. These variations arise from the location, the property’s surroundings, the competitive market, the strengths of its employees, business partnerships, service levels, marketing programs, and even technology decisions. And this is just the beginning.

As seen in the above image, Hotel PMS solutions are delivered worldwide by companies headquartered in many parts of the world. While the United States has a significant share of those tracked in Capsolve’s research, it represents less than 20% of the total and is followed closely by Spain, France, the UK, and others.

Marketplace Context

This dispersion extends beyond the geographic headquarters location of these solution providers into the actual functionality of their respective software solutions. Depending on your business needs, you will find almost any combination of functionality within this marketplace. However, sifting through hundreds of vendors to find the best property management software may become an exasperating experience, whether you are a tech novice or a tech enthusiast.

As you would expect, Capsolve found rate, rate plan, inventory, availability, and reservation management to be at the core of these systems. However, while these fundamentals of the PMS exist nearly everywhere, the number of modules continues to increase. Vendors are responding to client requests to extend their functionality in multiple directions. This is causing a much more diverse playing field as vendors decide to invest in CRS, IBE, CM, POS, Website, or CRM functionality to satiate these needs. More choice in vendors is the result, which means that most properties have multiple options when considering a new solution.

Pricing pressure shifted in recent years and was influenced in the direction of buyers. This results from increasing competition, advancements in interfacing solutions, and increased buying power in selected market segments. More specifically, interfacing was historically expensive to build and maintain. Technological advancements and more aggressive pricing by selected vendors have decreased buyers’ expenses. Increased fragmentation across branded hotels has changed the mix of independents to brands, and introducing soft brands has improved access to bulk pricing for this increasing category of hotels. Given this market activity, monitoring pricing in conjunction with feature advancements may be worthwhile as you begin to consider new PMS options.

Solution Paths

Changing your PMS can feel like a rather complicated decision. However, the critical element is deciding what solution you want to select as your new core element of technology. While it is not required to take this approach, the most common path is to choose a system that will support your most important strategic and tactical technology capabilities and then decide what new or existing technology should complement it. A few standard approaches enabled by today’s technology solutions within this category include:

• Comprehensive Core: a solution with multiple modules designed to provide a fully integrated approach to covering most or all property needs
• Best Fit Core: a solution with multiple modules covering the minimum requirements in combination with critical strategic capabilities
• Minimized Core: a solution typically covering the most crucial strategic and operational needs but providing significant flexibility to connect to other best-of-breed solutions to complement the core
• Best Strategic Fit: a solution providing a balance between comprehensiveness and long-term strategic needs

The following table provides further practical insight into the types of solutions in the marketplace. Core PMS solutions deliver the fundamental operational features across traditional and more recent PMS technology. A Comprehensive multi-module solution aims to bring full-featured software and reduce the number of additional software purchases for the buyer. A PMS with a Partner Ecosystem usually provides a robust marketplace of partnerships, allowing the buyer to select from pre-integrated solutions to complete certain aspects of their tech stack. The Internationalization component creates foundational features, such as multi-currency and multi-language, that support the need to operate across a diverse customer base. Distribution is sought-after for properties seeking more exposure to multiple distribution channels.

These solution paths are not necessarily mutually exclusive. Solutions within the marketplace may create the opportunity to combine one or more paths and meet more of your selection criteria. Appropriately formulating an RFP to share with potential vendors will help to ensure you ask the best questions specific to your business while allowing you to learn about the depth of each potential vendor partner.

Pricing Information

Numerous pricing models exist in the marketplace, and it is crucial to understand how each one will affect your total cost of ownership. The standard pricing structures are:

• Base Software Price plus a Maintenance Charge: This pricing is usually charged for on-premise software installed on local servers. It is generally charged based on the number of servers, user licenses, or user accounts. There is an ongoing charge for modifications and upgrades based on the percentage of the base software.
• Subscription Price: This pricing is more common with the adoption of Software-as-a-Service. The price is often charged annually, quarterly, or monthly and applied to each location or user account. This type of pricing is sometimes aligned with the number of rooms associated with the property within the hotel industry but is less likely to be applied in the vacation rental industry unless multiple properties are part of the purchase.
• Transaction Price: These fees are based on the volume of activity flowing through the software and closely align with its usage. This type of pricing is usually experienced as part of a brand affiliation, where the PMS is provided as part of the agreement. It may be defined by a flat transaction fee or a percentage of revenue.

As expected, a combination of these pricing approaches may be applied to any software.

Sales & Marketing Considerations

Hotel Property Management Software was traditionally considered the operational center for hotels. However, it may also house a great deal of additional functionality as the scope of most systems continues to increase based on hotels’ changing needs. These complementary capability categories include Customer Relationship Management, Sales and catering, Website Management, and Group Management functionality.

Many Hotel PMSs also delve into guest communications by facilitating messaging conversations before, during, and after the on-property stay experience. Yet, others have CRM functions built into their software. This may be a simple approach to managing guest information. Still, it can provide more depth to store a relatively complete guest profile or even wade into marketing and communications capabilities. While several best-of-breed solutions strongly dominate this segment, select Hotel Reservation software vendors are making efforts in this direction and are usually found within the CRM style of Hotel Property Management Software.

Current Trends

1. Changing Consumer Requirements: The pandemic caused the need for more touchless interactions with guests. This is transforming business processes, and solutions are adapting to these must-haves in the marketplace.
2. Similarly Mobility: The mobile device is preferred for delivering touch-free guest tasks, such as Check-in, F&B Purchases, Guest Messaging, and much more.
3. Partner Ecosystem Race: Vendors’ need for a mature set of partners that are pre-integrated into their solution continues to become a necessity and point of differentiation for leading solutions in the marketplace.
4. Module Set Meets Business Need: Combining the best selection of modules with core Hotel Management Software for a given hotel is an important factor in improving a solution provider’s ability to compete for an account and for the hotel to find the best vendor.
5. A Menu of Modules: Some vendors continue to mature their products by increasing their module coverage, deepening their investments, and changing their role within their ecosystem. Others are building an infrastructure beneath standard PMS functionality to expand yet simplify their ecosystem playground.
6. Certainly the Cloud: Cloud solutions are often emphasized or required in today’s RFPs due to the benefits they produce for many hotels.

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About this Report

This document reviews the marketing information and capabilities of this category’s solutions and the surrounding technology ecosystem. It contains original content written by Capsolve to provide a perspective of current trends affecting one or more of the hotel, restaurant, golf, and country club industries. The analysis covers a statistically significant portion of the previously defined category marketplace.