Beware of the hidden fees in many property management system (PMS) packages

An effective property management system can transform the running of your hotel, improving customer service, efficiency and helping capitalise on new business opportunities.

However, a good PMS system will inevitably represent a significant investment for any hotel.

This means many hotel owner/managers get tempted into agreeing to PMS packages which appear reasonable at face value but often there is a sting in the tail.

Some PMS providers will slash their upfront price but hit their customers with hidden fees which can see the hotel’s long term spend mount up by tens of thousands of pounds.

Here are some of key tricks to be aware of when comparing prices of different PMS systems:

Transaction fees

Some PMS providers will cut their upfront installation fee, giving customers the impression they are benefitting from a great deal, but then charge transaction fees for online bookings of up to £1.50 per booking.

This quickly mounts up.

If you assume most hotels can expect at least 100 online bookings per room, just one hotel with 30 rooms would be spending £4,500 per year, purely on transaction fees.

Where a hotel business has more than one venue, annual booking figures are often well into the thousands so over the course of a year they could be spending tens of thousands on transaction fees.

It will save you money in the long run if you pay a bit more upfront to avoid ongoing transaction fees.

Annual fee increases

Most PMS providers will charge monthly support fees for the duration of your contract with them. In the case of Avon Data this is an annual contract during which we provide advice and support on the use of our PMS Hotel Executive.

But, some PMS providers will hook hotels into long contracts lasting three years and increase their prices by as much as 4% each year.

Avon Data’s clients have only seen two small support fee increases of 2% over the last 10 years.

So, when choosing a PMS and wanting to get the best price, do your homework, do some number crunching and ensure you don’t end up paying far more than you need to.

For more information on Avon Data’s Hotel Executive click here.