Choosing the right property management system for your accommodation can be essential for a successful business. With so many choices out there, it can get a bit overwhelming.
In this blog, we will help you make an informed decision on choosing the right one.
Buckle up and get ready to read up on the comparison of Cloud PMS and On-site one.
Let’s jump right on it.
1. What Is Hotel Management Software?
So we’re on the same page, let’s define PMS first.
PMS software has evolved the hospitality industry by replacing the old-fashioned paper-intensive way of managing accommodations. Features like a booking engine or channel manager prevent human-made errors like overbooking.
It doesn’t only help with the front desk operations like booking reservations or guest check-in and check-out. It constantly evolves and helps hoteliers manage all aspects of their property.
Hotel management software also automatizes most manual tasks and helps employees focus on creating a personalized guest experience.
2. Types of PMS
The two main types of hotel management software you can come across are:
✅On-site property management system
This system is distinctive in the way it stores data. An on-site server is required for this type of software to function.
Its maintenance is left up to the hotel. In-house IT support is required to maintain functionality.
✅Cloud-based PMS
This type of software doesn’t require an on-site server and is connected to the internet. It is accessible through most devices in the accommodation and has lower maintenance costs.
3. 7 Main Differences To Consider
1. Installation
Cloud-based System Installation
This type of management software is installed through the internet and can be accessed through any device once an account is made. Data is stored by the vendor, in other words outside of the hotel.
Maintenance and security fall on the PMS provider.
Keep in mind- a solid internet connection is required for this type of system to function properly.
On-premise System Installation
Unfortunately, the process of installing this type of system is a bit more complicated.
Firstly, it needs to be manually installed on every device it will be used on. Data is stored in a server that would be located somewhere on the premises. Don’t forget about other backup servers.
Protecting and storing data becomes the sole responsibility of the hotel.
2. Technical Requirements And Maintenance
Cloud-based Solution Requirements
This one is hands-off. Forget about servers or backups, everything is hosted by the vendor here.
All the hotel would need is good internet access and they would be good to go.
Don’t take this too literally, tho. You would still need a desktop or two around the office. The main draw of cloud-based PMS is that it doesn’t require investment in hardware.
On-premise Solution Requirements
A lot has to be taken care of so this PMS solution can function properly. Some of the hardware that is required is:
- A data server
- Back-up servers
- A terminal server(for accessing from different locations)
- A compatible operating system on all workstations
- Dedicated workstations for external systems
- Back-up hard drives
Man, that’s a lot. Apart from investing in so much hardware and storing it all on the premises, you would require in-house IT expertise.
3. Data Security
According to the latest 2024 investigation report, cyber security risks are at an all-time high. It was reported that 14% of attacks were due to exploiting initial access step vulnerabilities. In addition to that, 62% of attacks involved ransomware or extortion.
Data security is extremely important in the hospitality industry so consider this factor when choosing hotel software.
Cloud-based PMS Security
Providing security for your data is the responsibility of the vendor when using a cloud-based system. Your employees still shouldn’t click on any links sent to them by a Nigerian prince leaving them an inheritance.
Jokes aside, robust measures are implemented on this kind of software that make sure having data breaches is next to impossible. In many cloud-based systems, all data is hosted in multiple data centers which ensures that even if one data center fails, there is a backup.
On-premise PMS Security
With this kind of system, security is the property’s responsibility. Here are some steps the property can take to keep their data secure when using this PMS system:
- Installing anti-virus programs
- Securing private networks
- Restricting access to server rooms
- Manual data backup processes
- Implementing backup servers and generators
While it might feel safer to store all data on your own hardware and call it a day, this can represent a big risk. In case of fires or floods, this hardware can be damaged and pose a nightmare for your hotel.
4. Cost Of Investment
When debating operating costs, we believe it is important to take into consideration time as well as money. Saving time for management as well as front desk staff can be as important as saving on expenses.
Cloud-based System Costs
Cloud hotel PMS usually charges on a monthly subscription and based on the number of rooms. While this expense can add up over time, it is important to consider other things that your money isn’t going towards.
With no hardware onsite, there are no maintenance and update costs. Usually, on-premise software licenses can be costly and there could be additional fees if you want to add more workspaces in the future. Additional security costs may be something you invest as well to keep your server room secure.
Taking into consideration time as well as the biggest currency, cloud PMS offers peace of mind. With no more endless wires and constant need for the upkeep of this system, hotel staff can focus more on the guests. You also don’t need to be a tech mogul to figure out how to use this software. All the technical stuff is taken care of by the vendor.
On-premise System Costs
The reality is that this type of hotel property management system isn’t designed for medium-sized or small hotels. This sort of system is considered to be a capital expenditure so many properties can’t afford it at all.
Some of the biggest fees you would face when choosing this type of hotel management system are:
- Software license
- Annual maintenance fees
- Hardware and IT costs
This type of software might require more work and time invested towards maintenance and learning the system.
6. Ease Of Integration
Other software like POS systems or accounting software might be needed to run your property. Having them integrated with your hotel management solution is essential for running your business smoothly.
Cloud-based Property Management System Integration
This one is usually the easiest solution. While many come already integrated with other partnering software solutions, integration is pretty seamless. Due to open APIs and common Web standards, cloud-based software is easily integrated with external solutions.
On-premise Property Management System Integration
While on-premise hotel PMS solutions allow integration with other software, this process is very complex. It would usually require manual technical work as well as additional hardware.
💡Shining the spotlight
When it comes to integration, we’re shining the spotlight on OTA Sync cloud-based hotel management software that has partnered with many external software and offers easy and quick integrations with new external solutions.
6. System Accessibility And Mobility
Cloud-based PMS Software Accessibility
Because this system is deployed online, it can be accessible via a secure login on any mobile device from anywhere. The only requirement is a good WiFi connection. The cloud solution is a clear winner in terms of accessibility as this can not be matched by any modern on-site PMS.
On-premise PMS Software Accessibility
While it is possible to access the system remotely with this kind of solution, it is again, not as easy. This kind of extravagance would require additional technical setup and would also depend on the server workload. A clear loser in this category, unfortunately.
7. Updates And Upgrades
Cloud Property Management Upgrades
This type of hotel PMS offers updates that are usually free and easily installed. This means that the software is always up to date. A good advantage is that this doesn’t require any technical knowledge from the hoteliers or additional hardware.
On-premise Property Management Upgrades
The biggest drawback to upgrading on-premises PMS is that it can be quite expensive. Software updates can also sometimes mean hardware updates.
4. Wrapping it up
Deciding on the right solution to run hotel operations smoothly asks for many factors to be taken into consideration. Based on this comparison, a clear winner is the cloud-based hotel management system.
By lowering costs and offering more flexibility and accessibility, cloud-based hotel PMS is a modern solution that is becoming the norm in the hospitality industry. While both have pros and cons, on-premise and cloud PMS have a distinct difference in performance and maintenance needs.
Saving time is also a big factor where cloud systems take the win which is essential for running a successful hotel business.
5. How OTA Sync Can Help
OTA Sync is an all-in-one cloud-based software solution for managing hotels and apartments. Because of cloud-based technology, costs are drastically reduced, daily tasks are automated, and the overall efficiency and revenues of the property are increased.
OTA Sync software is suitable for medium and small hotels, boutique hotels, hostels, guesthouses, and apartments. The company has over 2.000 satisfied users in 17 countries around the world.
There are four complete solutions for managing hotels and apartments:
For a free trial, click here.
