Cloud vs On-premise Property Management System

Choosing the right property management system (PMS) for your hotel is very important as it can make or break your business. In this article, we will compare the benefits of cloud-based and on-premise PMS, so that hoteliers can make better decisions.

The software which helps the hotel staff in managing daily operations such as reservations, room allotments, check-ins and check-outs, billing, guest services, housekeeping, accounting, and staff reporting is known as property management software. 

This software helps hoteliers to improve guest experiences, optimize revenue and enhance overall efficiency for property owners.

There are mainly 2 types of Property Management Systems:

1. On-premise PMS
2. Cloud-based PMS

An On-premise Property Management System (PMS) is a type of software that is installed and hosted locally on the hotel’s servers. In this setup, the hotel has direct control over the hardware and software and is responsible for its maintenance and management.

A cloud PMS is a type of hotel management software that is hosted on remote servers and accessed through the Internet. These cloud services are managed by third party vendors. It allows hoteliers to manage various aspects of their property operations including reservations, room allotments, check-ins and check-outs, billing, staff reporting, and more.

Unlike traditional on-premise PMS software that requires installation and maintenance on local servers, a cloud PMS is deployed and maintained by industry professionals.

We will compare the following points to see which software is right for the hoteliers.

As the on-premise PMS is hosted locally on the hotel’s server, the hotel staff is responsible for the maintenance which requires resources and is expensive. 

Cloud-based PMS is hosted on remote servers and can be accessed through the Internet. Third-party vendors are responsible for hosting and maintenance.

Real-time data accessibility is challenging in on-premise PMS as it is dependent on the hotel’s network infrastructure. The hotel staff can access the Cloud-based PMS from anywhere with an internet connection. 

With the on-premise PMS, long term license fees require additional costs, whereas a cloud PMS includes updates with a subscription package. Hotels can cancel their subscription fee at any time. Additionally, cloud-based PMS solutions offer the advantage of software updates and maintenance, reducing the dependence on an IT team as compared to On-premise PMS.

Implementation of an on-premise PMS is time-consuming as they need servers for installation. It also affects the hotel’s operations. So providing regular updates is difficult and expensive. The Cloud PMS can be installed in much less time as the third-party vendors have dedicated resources for each operation and can provide upgrades regularly with no extra cost. 

As the on-premise PMS is hosted locally at the property, the hotel staff must be there at the property to access it. This makes managing daily operations very hard for the hotel staff. Whereas in cloud PMS, the staff can access the PMS on the go through their mobile devices and on the web. This makes their daily operations much simpler and it exponentially increases the staff’s productivity. 

As the hotel’s revenue is directly dependent upon the room’s booking, they need to sell more online as more travelers are making reservations through OTA (Online Travel Agency). But the hoteliers are unlikely to see the bookings with on-premise PMS as they do not integrate with channel managers. Similarly, a web booking engine on a hotel’s website may restrict direct bookings. 

But a cloud PMS can resolve these issues with ease. It seamlessly integrates with the channel manager and web booking engine and helps hotels to synchronize the OTA bookings and direct bookings. The hotel staff can access the inventories and rates in real-time and can easily manage the bookings. This in turn increases the hotel’s revenue. Cloud PMS also integrates easily with Hotel POS (Point of sale)

The relationship between a guest and a hotel is very important as, if the guests are satisfied they will visit again or recommend the hotel to their relatives. So customer relationship management is very crucial, and it is challenging for hotels to leverage the power of this tool for on-premise PMS. 

As the cloud PMS offers seamless two-way integration with a CRM solution, hoteliers can efficiently segment their guest profiles, past preferences and purchases. This helps in delivering marketing campaigns at the right time and frequency for better conversion. 

Nowadays, guests want contactless services such as bookings and room services directly through their smartphones. This hassle-free experience on On-premise PMS is hard and expensive.

In the cloud, PMS hotels can easily roll out several contactless services to their guests. From check-in to check-out, the guests can easily use these features with ease. 

The hotels always have sensitive information such as guests’ personal details, login information and payment information. So the security of this data is very crucial. Despite cloud PMS offering various features, security is a primary concern for many industries. So on-premise PMS makes more sense to many hoteliers out there. 

In the cloud PMS security remains the number one concern. Because of many security breaches, many hoteliers still hesitate while going for cloud PMS. 

Business Owners have to trust software that helps to run their everyday tasks. It’s an individual’s choice to decide what they expect from the software.

For big hotel chains, on-premise PMS might work well as they have more capital and can manage the heavy costs. But for small accommodations businesses, mobility and cost are their top priority. So cloud PMS might be their choice.

I sum up my article on Cloud vs on-premise PMS. I hope you find my article interesting and helpful. 

If you are in search of an application to launch your hotel website, then you must give QloApps a try. It is a free hotel reservation system. Please share your thoughts and queries on the QloApps forum.