Property Management Systems Failed the Hotel Industry

Since the earliest versions of a Property Management System (PMS) came to market in the 1980’s, the PMS has emerged as the most important technology for a hotel.

However, somewhere along the way over last 40 years something went wrong.

PMS’s essentially gave their data to other developers so they could build specialized applications .  This created complexity and additional costs for hotels.  And lost value for the PMS’s.

Think about it. Channel Managers, Customer Reservation Systems, Revenue Management Systems, Operations Software, Payment Processors, Sales and Catering and Financial Systems all need the PMS in order to exist. 

This has been bad for the hotel industry. Hotels must own multiple systems and pay for integrations while operating in a complex technology environment which keeps costs high.  It’s only been good for the software businesses that built these value added systems. 

This has been bad for the PMS industry.  Burdened with competing for a smaller piece of  hotel technology spending and high costs to maintain their core technology, growth rates for PMS businesses are low.  And the PMS industry is fragmented – there are only a few large and hundreds of small-to-mid-sized PMS companies around the world today.  

It’s no wonder that a common refrain among travel industry leaders is our industry lags when it comes to technology.  Indeed, any tech market burdened with complexity, fragmentation and higher than necessary total cost of ownership experiences low levels of innovation.

The PMS’s created this problem.  But they are also the best hope for the future of hotel technology.

In the coming months, we will “dig in” to the past, present and future of the PMS and hotel technology industry in a series of blog posts. Stay tuned for an honest discussion the hotel technology world needs to have.

This article is written by Rich Maradik, CEO of NSight Holdings.